Case Title: BITUMINOUS CASUALTY CORP. v. COWEN CONSTRUCTION, INC.

Citation: 

Docket Number: 95971

State: oklahoma

Court: Oklahoma Supreme Court

Date: 2002-04-30T00:00:00Z

Document:
BITUMINOUS CASUALTY CORP. v. COWEN CONSTRUCTION, INC.  BITUMINOUS CASUALTY CORP. v. COWEN CONSTRUCTION, INC. 2002 OK 34 55 P.3d 1030 Case Number: 95971 Decided: 04/30/2002 THE SUPREME COURT OF THE STATE OF OKLAHOMA [55 P.3d 1030] BITUMINOUS CASUALTY CORP., Plaintiff v. COWEN CONSTRUCTION, INC., and HOSPITAL CASUALTY COMPANY, Defendants CERTIFIED QUESTION FROM A UNITED STATES DISTRICT COURT ¶0 Bituminous Casualty Corp. [Bituminous] sought declaratory relief in the United States District Court for the Northern District of Oklahoma to delimit its liability under the terms of a commercial general liability insurance policy issued to Cowen Construction, Inc. [Cowen or defendant]. St. John Medical Center [hospital] (in a state-district-court action earlier brought against itself) filed a third-party petition alleging that Cowen negligently constructed a kidney dialysis unit which caused eight patients who were treated there to incur lead poisoning. Hospital's insurer notified Bituminous that in the event the patients prevailed against hospital, it would seek indemnity from Bituminous. Pursuant to the provisions of CERTIFIED QUESTIONS ANSWERED. Robert N. Naifeh, Jr. of Derryberry Quigley Solomon Blankenship & Naifeh, Oklahoma City, Oklahoma, for the plaintiff. Alan Wayne Gentges of Scott & Gentges, Tulsa, Oklahoma, for the defendant, Cowen Construction, Inc. Michael J. Heron, Mary Beth Hanan and Patrick R. B. Sherry of Johnson Hanan & Heron, Oklahoma City, Oklahoma, for the defendant, Hospital Casualty Co. Lavender, J. ¶1 Pursuant to the Uniform Certification of Questions of Law Act, 1. Under Oklahoma law, what is the proper "trigger of coverage" theory to determine the applicability of a commercial general liability policy 2. Under Oklahoma law, is the scope of the total pollution exclusion of a com-[55 P.3d 1031] mercial general liability policy limited to "environmental pollution?" ¶2 Since the language used in the insurance contract (in issue) is in itself clear and unambiguous insofar as it addresses coverage for "property damage" and "bodily injuries" occasioned by "pollutants," it will be given its plain and ordinary meaning. The second certified question is answered in the negative. Because our response to the second query disposes of the case, we decline to answer the first certified question. The Court will answer only those certified questions which are "determinative" of a cause. I STATEMENT OF FACTS AND PROCEDURAL HISTORY ¶3 St. John Medical Center [hospital] contracted with Cowen Construction, Inc.[Cowen] to build a kidney dialysis center in Tulsa, Oklahoma. Cowen completed the contracted-for dialysis center in November 1993. In October 1996 eight patients ¶6 In February 2000 Hospital Casualty Company [HCC], hospital's insurer, placed Bituminous and CNA on notice that it would seek indemnity from them if it had to pay on hospital's behalf for the patient/plaintiffs' alleged injuries. [Only USF&G had agreed to defend Cowen against hospital's claims.] After receipt of HCC's notice Bituminous sought declaratory relief in the United States District Court for the Northern District of Oklahoma to determine whether it had any contractual obligation to either defend or indemnify Cowen in the third-party action. II THE COURT'S FUNCTION WHEN RESPONDING TO A CERTIFIED QUESTION FROM A FEDERAL COURT ¶7 Because the case from which the certified question emanates is not before us for resolution, we refrain (1) from applying the declared state-law response to the facts elicited in the federal-court litigation and (2) from passing upon the effect of federal procedure on the issues, facts and proof in the case. We have briefly outlined the case's factual underpinnings to place the certified questions in a proper perspective. It is for the United States District Court for the Northern District of Oklahoma to analyze our answer's impact on the case and facts ultimately before it. III CERTIFIED QUESTION ANSWERED ¶8 The posited certified questions call for the Court to ascertain the meaning of certain terms found in general liability insurance policies/contracts10 between Bituminous (insurer) and Cowen (insured). It is settled under Oklahoma's extant jurisprudence that ascertaining whether the terms of an insurance policy are ambiguous is for the Court to determine as a matter of law.11 Every insurance contract shall be construed according to the entirety of its terms and conditions set forth in the policy and as amplified, extended, or modified by any rider, endorsement, or application attached to and made a part of the policy.[55 P.3d 1033] ¶10 We begin by noting that today's case does not mark the first time the Court has considered the scope of a "pollution exclusion clause" in a comprehensive GCL insurance policy. The Court in Kerr McGee Corp. v. Admiral Ins. Co. ¶11 The primary focus of our analysis is construction of the following exclusion-from-coverage found in a special endorsement to the Bituminous/Cowen GCL policy: (1) Bodily injury or property damage arising out of the actual, alleged or threatened discharge, dispersal, release or escape of pollutants. ¶12 The Court is required in its construction of the policy's terms to give effect to the entire contract. Our review discloses no observable ambiguity in the exclusion's language found on the insurance policy's face. Giving the language used in the pollution-exclusion clause as stated in the special endorsement its plain and ordinary meaning evinces an exclusion of coverage for bodily injury or property damage caused by a pollutant's release. Nowhere in the policy's lexicon is there language employed which would sustain finding as suggested by the insured the pollution exclusion clause only excluded from coverage that bodily injury and/or property damage which occurred when the general "environment" was damaged by the insured's acts. An insured cannot insist upon a strained construction of relevant policy language in order to claim a patent ambiguity exists nor can it contradict the written instrument's plain terms under the guise of a latent ambiguity. ¶13 The general import of the GCL insurance policy's original pollution-exclusion-clause see policy paragraph "2. Exclusions (a) & (f)(1) a-d" IV SUMMARY ¶15 The Court is aware that many jurisdictions have considered the issue encompassed in the certified question answered today and that there is a wide divergence of opinion as to how it should be resolved. In most of the jurisprudence suggested by the parties the issue came to the court construing the policy's terms in the context of extended litigation with well-defined records of the pollution-exclusion-clause's history before relevant state regulatory bodies. Such is not the context within which we have considered the contested policy's text today. The certified question in the federal declaratory action presented to us is bare of any evidence of the parties' intent other than as embodied in the language used in the policy and further is devoid of any factual record relative to approval of the policy's language by the Oklahoma State Insurance Commissioner. Hence, we have considered the insurance provision in issue by analysis focused upon the language employed by the parties in their contract. ¶16 The utilized terminology in the Bituminous/Cowen GCL policy is straightforward and not fairly susceptible to multiple meanings. Hence, we have given the policy's language its plain and ordinary meaning. The exclusion (here in issue) was not made obscure by being hidden deep within the bowels of a long insurance contract but rather is clearly identified for what it is a special endorsement changing the scope and language of an earlier contractual provision. The Wisconsin Supreme Court's admonition in Peace v. Northwestern Nat'l Ins. Co., 596 N.W.2d 429, 441, is particularly relevant. There the court in construing a "pollution exclusion clause" observed: "Courts must not torture the policy language in order to 'create ambiguities where none exist.'" [quoting Kaytes v. Imperial Casualty & Indem. Co., 1994 WL 780901 (E.D.Pa. 1994)] The contractual language identified in the certifying court's second query i.e., the special endorsement's pollution-exclusion-clause excludes from coverage all damage occasioned by the "discharge, dispersal, release or escape of pollutants" which causes "bodily injury" or "property damage." It is not limited in its scope to "environmental pollution." [55 P.3d 1035] CERTIFIED QUESTIONS ANSWERED. ¶17 HARGRAVE, C.J., HODGES, LAVENDER, OPALA, BOUDREAU and WINCHESTER, JJ., concur. ¶18 KAUGER, J., concurs in part; dissents in part. ¶19 WATT, V.C.J. and SUMMERS, J., dissent. [ 55 P.3d 1036 ] T