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Wisconsin Supreme Court accepts two new cases

Madison, Wisconsin - May 12, 2014

The Wisconsin Supreme Court has voted to accept two new cases and acted to deny review in a number of other cases. The case numbers, issues, and county of origin are listed below. The Court of Appeals' opinions for the newly accepted cases are hyperlinked. Visit the Supreme Court and Court of Appeals Access website for more information about the status of any particular case.

2012AP2521 Preisler v. Kuettel's Septic Serv.
2013AP691 & 2013AP776 Wilson Mutual Ins. Co. v. Robert Falk and Jane Falk

In these cases, which are not consolidated, the Supreme Court has been asked to settle disputes over the legal nature of excrement: When used as a component of farm fertilizer, is excrement considered a "pollutant" under standard insurance policy pollution exclusions?

Decisions by the Supreme Court are expected to resolve possibly conflicting Court of Appeals' decisions and determine whether there's a distinction for insurance purposes between cow manure and "human manure," when either substance is blamed for contaminating nearby well water.

Farmers commonly use both cow manure and septage containing human excrement as organic fertilizer. In both Wilson Mutual Ins. Co. v. Robert Falk and Jane Falk and Preisler v. Kuettel's Septic Service, the substances are blamed for contaminating drinking wells with nitrates.

In Preisler the Court of Appeals held that "septage" – a combination of water, human urine and feces, and chemicals – was a pollutant. Thus, the insurer did not have to provide coverage when it leached into a nearby drinking well. In Falk, the Court of Appeals held that cow manure is not a pollutant. Thus the insurer had to provide coverage when a cow manure fertilizer application contaminated the neighbor's well.

Some background on Preisler v. Kuettel's Septic Service: The Kuettels are farmers who also run a septic pumping service. Tina and Frederick Preisler, also farmers, live across the road. The two families entered into an agreement to spread septage from the Kuettel's septic business on the Preislers' farm fields as a fertilizer. The Kuettels received authorization from the Wisconsin Department of Natural Resources (DNR) to apply a specific amount of septage on the Preislers' fields. The Kuettels then applied the septage to the Preislers' farm fields for several years. The Kuettels occasionally hired Phil's Pumping and Fab, Inc., to spread septage on the Preislers' farm fields.

In the summer of 2008, the Preislers learned that their well water had elevated nitrate levels that resulted in their cattle dying at an uncharacteristic rate. Septage contains high levels of nitrogen, which is converted to nitrates in the soil. The Preislers installed a new well, after which the cattle deaths abated.

The Preislers filed suit against the Kuettels and their businesses and Phil's Pumping, alleging that Kuettles improperly stored and applied setpage, causing it to leak into the groundwater, and that Phil's Pumping overspread or improperly spread septage. Numerous insurers were named in or added to the lawsuit.

Each insurance policy included a similarly worded exclusion for pollution. All the policies exclude damage caused by the actual, alleged, or threatened discharge, dispersal, seepage, migration, release, or escape of pollutants.

The trial court ruled that septage was unambiguously "waste" and therefore a pollutant. The court also concluded the Preislers' losses resulted from the "discharge, release, escape, seepage, migration or dispersal" of the septage.

The Preislers and the Kuettels appealed, unsuccessfully. The Preislers, the Kuettels and their business entities, and Phil's Pumping each petitioned for review by the Supreme Court, which considers eight issues raised in the three petitions.

Some background on Wilson Mutual Ins. Co. v. Falk: Robert and Jane Falk are dairy farmers with about 600 head of livestock and more than 1,670 acres of farm land. They fertilized their field with manure from their dairy cows according to a nutrient management plan prepared by an agronomist and approved by the county conservation division. The DNR informed the Falks that the farm's manure had polluted an aquifer and neighboring wells. A child of one of the neighbors had to be hospitalized as a result of exposure to manure-contaminated water.

The DNR provided well replacement grants to at least two of the Falks' neighbors to offset the cost to replace their water wells; these grants were about $10,000 each. The DNR also spent about $10,000 for temporary water supplies for the Falks' neighbors. The DNR sent the Falks a letter stating that it may seek recovery of these costs against the Falks through a referral to the Wisconsin Department of Justice.

The Falks forwarded the DNR's letter to their insurer, Wilson Mutual. Wilson Mutual filed a declaratory judgment action to allow the court to decide if the damages caused by the manure contamination were covered by the farm insurance policy Wilson Mutual issued to the Falks to provide property and personal liability coverage.

The trial court concluded that the pollution exclusion in the farm's policy applied so as to exclude coverage, finding that a "reasonable person in the position of the [dairy farmers] would understand cow manure to be waste." The trial court found that Wilson Mutual had no duty to defend or indemnify the Falks.

The Falks appealed, successfully. The Court of Appeals concluded that the pollution exclusion in Wilson Mutual's farmowners policy does not apply to manure used as fertilizer on a farm. The Court of Appeals reversed the trial court's decision and held that the pollution exclusion clause did not bar coverage.

The Supreme Court reviews issues posed by Wilson Mutual:

  1. Is manure that contaminates consumable fresh water a "pollutant" under the pollution exclusion in an insurance policy?
  2. Can an insured's alleged subjective expectation of coverage trump clear and unambiguous policy language?
  3. Does the Farm Chemicals Limited Liability endorsement in the Wilson Mutual Insurance Company policy issued to the Falks provide coverage for damages from manure that contaminates consumable fresh water?

Decisions by the Supreme Court are expected to determine whether either or both cow manure and human excrement are pollutants for the purpose of determining insurance coverage when a nearby drinking well is contaminated.

Review denied: The Supreme Court denied review in the following cases. As the state's law-developing court, the Supreme Court exercises its discretion to select for review only those cases that fit certain statutory criteria (see Wis. Stat. § 809.62). Except where indicated, these cases came to the Court via petition for review by the party who lost in the lower court:

2012AP2127 Est. of Dier v. Puyleart
2013AP401 State v. Gogos

2013AP349-CR State v. Baldwin

2013AP2892-W Wille v. Pollard

2012AP492-CR State v. Peterson
2012AP712 Heimermann v. Walker
2013AP300 Bogenschneider v. Beauvais
2013AP909-CR State v. Valiquette

2013AP535 Dodge Co. Professional Emp. v. Dodge Co.

Eau Claire
2013AP345-CR State v. Stahlbusch
2013AP417 Peterson v. McLaughlin

2012AP2278-CR State v. Smart

2012AP2767-CR State v. Schiewe

2012AP1546-47-CR State v. Hall
2012AP2243-CR State v. Butler
2013AP60 Midwestern Helicopter v. Coolbaugh

La Crosse
2013AP157-CR State v. Davis

2012AP468 Gilmore v. Green Tree Servicing
2012AP1407 Kemper Ind. Ins. v. Filtz
2012AP1440-CRNM State v. Rodriguez
2012AP1458-CRNM State v. Jackson
2012AP1649 Saladin v. Progressive Northern Ins.
2012AP1892-CR State v. Marshall
2012AP2084-W Smith v. Cir. Ct. Milwaukee Co.
2013AP203 Cleaver Brooks v. AIU Ins.
2013AP440-CR State v. Graham
2013AP450 Brister v. WI Dept. of Children & Families
2013AP642-CR State v. Merchant
2013AP722-CR State v. Nicholson
2013AP741 Davis v. Milwaukee Metro. Sewerage Dist.
2013AP1294-95-W Valoe v. Schaub
2013AP1426-CR State v. Smith-Iwer
2013AP1661 State v. Lawanda R.
2013AP1974-CR State v. Sprewell
2013AP2031 State v. Wingo

2012AP1657 Dorfler v. Miller

2012AP2276 State v. Franzke
2013AP1335 State v. Sawicky

2013AP559-CR State v. Zarling

2012AP555-CR State v. Lowe

2012AP2785-CR State v. McKinney

St. Croix
2012AP1096-CR State v. Burkart

2012AP1631 Brazzoni v. State Farm
2013AP59 Widzisz v. Schumacher

2013AP103-CR State v. Haizel
2013AP1033-35-CR State v. Brotherton

2012AP1913 Coomer v. Allstate
2013AP981 State v. Martinez - Justice Annette Kingsland Ziegler did not participate.
2013AP1098 Erdmann v. Village Storage of Oconomowoc - Justice David T. Prosser, Jr. did not participate.

2011AP2286-W Thomas v. Pollard

2013AP2123 Aaron W.M. v. Britany T.H.

Tom Sheehan
Court Information Officer
(608) 261-6640

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