PUBLISHED
OPINION
Case No.: 95-2851
† Petition for Review filed.
Complete Title
of Case:
Antwaun Vance, a minor, by his
g/a/l Jacqueline Boynton,
Plaintiff-Respondent,
v.
James J. Sukup, First Financial Bank,
Royal Insurance, d/b/a Globe Indemnity Company,
and Wisconsin Health Organization,
Defendants-Respondents,
American Family Insurance Group,
Defendant-Appellant.
†
Oral Argument: December
4, 1996
COURT COURT
OF APPEALS OF WISCONSIN
Opinion Released: December
23, 1996
Opinion Filed: December 23, 1996
Source of APPEAL Appeal
from an order
Full Name JUDGE COURT: Circuit
Lower Court. COUNTY: Milwaukee
(If “Special”, JUDGE: LAURENCE C. GRAM, JR.
so indicate)
JUDGES: Wedemeyer,
P.J., Fine and Curley, JJ.
Concurred:
Dissented:
Appellant
ATTORNEYSOn behalf of
the defendant-appellant, the cause was submitted on the briefs of Barrett J.
Corneille, David J. Pliner, and Jeanne M. Armstrong of Bell,
Metzner, Gierhart & Moore, S.C., of Madison. There was oral argument by Barrett J. Corneille.
Respondent
ATTORNEYSOn behalf of
the plaintiff-respondent, the cause was submitted on the briefs of Peter
Guyon Earle of Boynton & Earle, of Milwaukee. There was oral argument by Peter Guyon
Earle.
On behalf of the defendant-respondent James
J. Sukup, the cause was submitted on the briefs of James E. Culhane and James
M. Jorissen of Davis & Kuelthau, S.C., of Milwaukee. There was oral argument by James E.
Culhane.
On behalf of the defendant-respondent First
Financial Bank, the cause was submitted on the briefs of Charles H. Bohl,
James G. Allison, and Laurie J. McLeRoy of Whyte Hirschboeck
Dudek S.C., of Milwaukee.
AMICUS
CURIAEAmicus
Curiae brief was filed by Robert F. Johnson and Heidi L. Vogt of Cook
& Franke, S.C., of Milwaukee, for Wisconsin Insurance Alliance and
Civil Trial Counsel of Wisconsin.
Amicus Curiae brief was filed by Paul J.
Munson of McDonald & Munson, of LaCrosse, Wisconsin, for
Wisconsin Apartment Association.
Amicus Curiae brief was filed by Heiner
Giese of Milwaukee for Apartment Association of Southeastern Wisconsin,
Inc.
COURT OF APPEALS DECISION DATED AND RELEASED December 23, 1996 |
NOTICE |
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-2851
STATE
OF WISCONSIN IN COURT OF
APPEALS
Antwaun Vance, a
minor, by his
g/a/l Jacqueline
Boynton,
Plaintiff-Respondent,
v.
James J. Sukup, First
Financial Bank,
Royal Insurance, d/b/a
Globe Indemnity Company,
and Wisconsin Health
Organization,
Defendants-Respondents,
American Family
Insurance Group,
Defendant-Appellant.
APPEAL from an order of
the circuit court for Milwaukee County:
LAURENCE C. GRAM, JR., Judge. Affirmed.
Before Wedemeyer, P.J.,
Fine and Curley, JJ.
FINE,
J. This action against, among others, James J. Sukup and his
insurer, American Family Insurance Group, alleges that Antwaun Vance, a minor,
was injured by lead-based paint in premises where he lived and which his family
rented from Sukup. American Family
denied coverage, and sought summary judgment dismissing it from this
action. The trial court denied American
Family's motion.[1] We affirm.[2]
I.
Vance's complaint
alleges that from November of 1991, Vance and his family lived in premises
owned by Sukup. It also alleged:
That
prior to April 27, 1993, [Vance] sustained lead poisoning by ingesting lead
derived from intact accessible painted surfaces, paint chips, paint flakes and
dust that was contaminated with lead derived from lead based paint at the
premises [rented from Sukup].
American
Family concedes that it “had a Business Key policy of insurance in force on
Sukup during” the relevant time. The
commercial-general-liability portion of the insurance policy obligated American
Family to “pay those sums that the insured becomes legally obligated to pay as
damages because of `bodily injury' ... to which this insurance applies,” and to
“defend any `suit' seeking those damages.”
This obligation was modified by the following exclusion:
This insurance does not apply to:
....
f. (1)"Bodily injury" ... arising out of the actual, alleged
or threatened discharge, dispersal, seepage, migration, release or escape of
pollutants:
(a)At or from any premises,
site or location which is or was at any time owned ... by ... any insured[.]
....
Pollutants
means any solid, liquid, gaseous or thermal irritant or contaminant, including
smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled,
reconditioned or reclaimed.
The
trial court ruled that “the lead was properly in the paint and that the paint
was properly applied,” and, therefore, “the lead cannot be viewed as a
contaminant.”
II.
Our review of a trial
court's grant or denial of a motion for summary judgment is de novo. See Green Spring Farms v.
Kersten, 136 Wis.2d 304, 315, 401 N.W.2d 816, 820 (1987). Moreover, the interpretation of an insurance
contract is also a question of law that we review de novo. United States Fire Ins. Co. v. Ace
Baking Co., 164 Wis.2d 499, 502, 476 N.W.2d 280, 282 (Ct. App. 1991).
“Insurance policies, like other contracts, are construed to ascertain and
effectuate the parties' intent. Thus, a
clear contractual provision must be construed as it stands. Ambiguities,
however, are construed against the party who drafted the contract.” Id., 164 Wis.2d at 502–503,
476 N.W.2d at 282. (Internal citations
omitted.)
The only issue on this
appeal is whether the American Family policy issued to Sukup obligates American
Family to defend Sukup against Vance's lawsuit. “An insurance company's duty to
defend an insured sued by a third party is determined solely by the allegations
in that third party's complaint. Any doubt
as to whether or not the insurance company has a duty to defend is `resolved in
favor of the insured.'” Production
Stamping v. Maryland Casualty Co., 199 Wis.2d 322, 326–327, 544 N.W.2d
584, 586 (Ct. App. 1996). (Internal
citations omitted.) Significantly, the
insurance company must defend the entire action against its insured if any of
the complaint's allegations “fall within the policy coverage” even though some
“allegations may fall outside the scope” of that coverage. Grube v. Daun, 173 Wis.2d 30,
73, 496 N.W.2d 106, 122 (Ct. App. 1992).
Our decision here is guided by our earlier decision in Ace Baking.
Ace Baking
concerned a dispute between Ace Baking Company and its insurer over the contamination of ice-cream
cones manufactured by Ace Baking that were stored in the same warehouse as was
a fabric softener. Ace Baking,
164 Wis.2d at 500–501, 476 N.W.2d at 281.
Linalool, an otherwise harmless ingredient in the fabric softener, had
migrated from the softener to the ice-cream cones and its packaging material,
making the cones smell and taste of soap.
Id., 164 Wis.2d at 501, 476 N.W.2d at 281. The insurance company rejected Ace Baking's
claim, “contending that there was no coverage because of a policy provision
that excluded losses `caused by or resulting from ... [r]elease, discharge or
dispersal of _pollutants._'” Ibid. We agreed, pointing out that “although
linalool is a valued ingredient for some uses, it fouled Ace Baking's
products,” and was, therefore, a “`pollutant' in relation to those
products.” Id., 164
Wis.2d at 505, 476 N.W.2d at 283.
We agree with the trial
court's conclusion in this case that lead is not a “contaminant” in paint to
which it was added deliberately by the manufacturer, any more than the
fragrance linalool in Ace Baking was a contaminant in the fabric
softener. See id.,
164 Wis.2d at 501, 505, 476 N.W.2d at 281, 283. As we noted in Ace Baking, a substance's status as
either a valued ingredient or a contaminant depends on where it is: “[I]t is a rare substance indeed that is always
a pollutant; the most noxious of materials have their appropriate and
non-polluting uses.” Id.,
164 Wis.2d at 505, 476 N.W.2d at 283 (emphasis in original). Thus, Donaldson v. Urban Land
Interests, Inc., 205 Wis.2d 404, 556 N.W.2d 100 (Ct. App. 1996),
recognized that “in concentrated levels” otherwise “harmless” carbon dioxide
“can become injurious, even lethal,” and was “`foreign' to a safe human
environment.” Id., 205
Wis.2d at 412, 556 N.W.2d at 103. Once
the lead escaped from the painted surfaces, however, either by leaving the
paint or because the paint itself chipped off, the lead became a
“contaminant”—a substance that did not belong in its new environment, just as Ace
Baking's linalool became a contaminant once it left the fabric
softener. See Ace Baking,
164 Wis.2d at 505, 476 N.W.2d at 283; see also United States
Liability Ins. Co. v. Bourbeau, 49 F.3d 786, 788–789 (1st Cir. 1995)
(paint chips released into soil).[3] Thus, the exclusion in the American Family
policy issued to Sukup may apply to damages caused by that lead if there is
also a “discharge, dispersal, seepage, migration, release or escape” of the lead.
Although Vance's
complaint alleges that he was damaged by lead that left the surfaces to which
the paint was applied (“paint chips, paint flakes and dust that was
contaminated with lead derived from lead based paint”), which would encompass
the second element of the exclusion, he also alleges that he was damaged by
lead from “intact accessible painted surfaces.” The second element of the insurance policy's pollution-exclusion
provision is not present with respect to this latter allegation: the lead from the “intact accessible painted
surfaces” did not, in the words of the exclusion, “discharge, dispers[e],
seep[], migrat[e], release or escape.” As one federal district court has noted:
“Discharge,
dispersal, seepage, migration, release, and escape” is a list of the ways by
which the pollutant must travel from a contained place to the injured person's
surroundings and then cause injury. In
contrast, injuries caused by irritants that normally are stationary, but that
can be shifted or moved manually, are not excluded from coverage because they
do not cause injury by one of the prescribed methods. For example, if a child were injured because he drank from a
bottle of drain cleaner or some other household product, even if that product
properly could be classified as a "pollutant," the injury would not
be covered by the pollution exclusion because the pollutant was not
disseminated by one of the prescribed methods.
Lefrak
Organization, Inc. v. Chubb Custom Ins. Co., 942
F. Supp. 949, 953-954 (S.D.N.Y. 1996).[4] Accordingly, American Family must defend
Sukup in this action. See Grube,
173 Wis.2d at 73, 496 N.W.2d at 122 (insurance company must defend entire
action against insured if any of complaint's allegations “fall within the
policy coverage” even though some “allegations may fall outside the scope” of
coverage).[5]
By the Court.—Order
affirmed.
[1] We granted American Family's petition for leave to appeal from the non-final order denying American Family's motion for summary judgment. See § 808.03(2), Stats. Antwaun Vance, the plaintiff, did not oppose American Family's petition.
[2] Amicus Curiae briefs have been filed by the Apartment Association of Southeastern Wisconsin, Inc., the Wisconsin Apartment Association, and, in a joint brief, the Wisconsin Insurance Alliance and the Civil Trial Counsel of Wisconsin.
[4] We thus need not decide whether Vance's ingestion of the paint from the “intact accessible painted surfaces” transformed the lead from a natural constituent of the paint into a contaminant once it “invaded Vance's body,” as American Family argues. See Gross v. Hoffman, 227 Wis. 296, 300, 277 N.W. 663, 665 (1938) (only dispositive issue need be addressed); State v. Blalock, 150 Wis.2d 688, 703, 442 N.W.2d 514, 520 (Ct. App. 1989) (cases should be decided on the “narrowest possible ground”). We also do not decide whether movement, transfer, or passage of a substance from one place to another in the ordinary and expected course of its life is a “discharge, dispersal, seepage, migration, release or escape” as those words are used in the American Family policy.
[5] Vance argues that the pollution exclusion clause in the American Family policy covers only “environmental” pollution. This court has held to the contrary in Donaldson v. Urban-Land Interests, Inc., 205 Wis.2d 404, 413-414, 556 N.W.2d 100, 103-104 (Ct. App. 1996). We are bound by Donaldson. See In re Court of Appeals of Wisconsin, 82 Wis.2d 369, 371, 263 N.W.2d 149, 149-150 (1978) (per curiam) (a published decision by one district of the court of appeals is binding on the court of appeals). But see Beahm v. Pautsch, 180 Wis.2d 574, 580–585, 510 N.W.2d 702, 705–707 (Ct. App. 1993), where, contrary to the exclusion clause at issue in this case, the exclusion clause applied to the “discharge, dispersal, release, or escape” of various substances “into or upon the land, the atmosphere or a water course, body of water, bog, marsh, swamp or wetland.” Id., 180 Wis.2d at 580, 510 N.W.2d at 705 (emphasis added).