Ct. App. 1999); Lransport Ins. Co y, Ford, 886 S.W.2d 901, 904 (Ky. App. Ct.1994),

Moreover, Factory Mutual cites only one Wisconsin case, Richland Valley Products v. St
Paul Fire & Casualty Co., 201 Wis. 2d 161, 548 N.W.2d 127 (Wis. Ct. App. 1996), that
discusses a contamination exclusion in an insurance policy, The decision in that case, however,
does not rely on established Wisconsin law; rather it relies on the principles noted above as well
as cases from other jurisdictions. In a similar vein, J.L. French concedes that Kentucky case law
provides no guidance that is factually on point, Pl.’s Resp. at 7 n.1, and it maintains that the
Court should apply generally applicable principles of insurance policy interpretation. Pl.’s Mem.
al 6.

The issues before the Court are, first, whether (he presence of body parts in the die
lubricant constitutes contamination, and sccond, if so, whether that contamination resulted from
“other physical damage not excluded” by the policy, Guided by the above principles, we find
that the term “contamination” is not ambiguous, Although various forms of matter can constitute
contamination, the term is not itself reasonably susceptible to multiple meanings. Giving the
word “contaminate” its plain and ordinary meaning, it means to “to render unfit for use by the
introduction of unwholesome or undesirable clements.” Webster’s Third New International
Dictionary 491 (1993). Tn turn, “contamination” means “the act or process of contaminating or
the state of being contaminated” or “something that contaminates.” fd; ef: Richland Valley
Products, 201 Wis. 2d at 170-71, 548 N.W.2d at 131 (citing cases from various jurisdictions that
rely on dictionary definitions of “contamination” to give the word its ordinary meaning in

insurance policies).

The presence of human remains in the die lubricant plainly rendered it (and thus the



DISCUSSION

Factory Mutual moves for summary judgment on the basis that J.L. French’s losses are
excluded under the policy. J.L. French seeks summary judgment to the effect that coverage
exists. Summary judgment is appropriate when there are no genuine issues of material fact and
when the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P 56(c). A court
views all facts and draws all inferences in the light most favorable to the nonmoving party.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986).

As an initial matter, the parties disagree as to which state’s substantive law should govern
the policy interpretation. Factory Mutual proposes Wisconsin, alleging that J.L. French’s
headquarters are located there. J.L. contends that choice of law analysis points to Kentucky, the
location of the plant involved in the incident. Despite this dispute, choice of law does not effect
the outcome of this case. General principles of insurance policy interpretation guide our
resolution of the issues before us, and courts in both Wisconsin and Kentucky follow similar
rules of interpretation, Words in insurance policies, if unambiguous, are given their plain and
ordinary meaning. Mullen v. Walczak, 664 N.W.2d 76, 79 (Wis. 2003); Nationwide Mut. Ins.
Co. v. Nolan, 10 §.W.3d 129, 131 (Ky. 1999). An ambiguity exists when words are reasonably
susccptible to more than one interpretation. Frost ex rel. Anderson v. Whitheck, 257 Wis. 2d 80,
90, 654 N.W.2d 225, 230 (Wis. 2002); see U.S. Fid. & Guar. Co. y. Preston, 26 8.W.3d 145,
148-49 (Ky. 2000). Any ambiguity in a policy’s language is to be construed against the insurer
and in favor of coverage. Anderson, 257 Wis. 2d at 91, 654 N.W.2d at 230; U.S. Fid. & Guar.
Co., 26 S.W.3d at 149. Policy exclusions are to be narrowly construed to make insurance

effective. Kalchthaler v. Keller Const. Co., 224 Wis. 2d 387, 393, 591 N.W.2d 169, 172 (Wis.



presses) unfit for their regular function and as such meets the ordinary definition of
“contamination.” The question then is whether this contamination was the result of “other
physical damage not excluded” by the policy. J.L. French has provided no evidence that any
actual physical damage to the press precipitated the contamination. Nor could it. The
contamination — the presence of human remains in the die lubricant — was caused by the operator
being crushed in the press. Even if there had been some physical damage to the press as a result
of the accident, this damage would not itself have released human remains into the lubricant; it
was the crushing that did so. The Court therefore determines that the presence of human remains
constituted contamination that was not caused by “other physical damage.” Any losses or costs
incurred as a result of having to clean the lubrication system and replace the lubricant are
therefore excluded from coverage under the policy.

Although Factory Mutual has moved for summary judgment on the basis that the
contamination provision excludes J.L. French’s claims, Def.’s Mem. at 3, it does not appear that
we can dispose of the case entirely on this basis. A footnote in J.L. French’s brief suggests an
alternative basis for recovery under the policy: it intimates that machine number ninc sustained
actual physical damage during the incident. Pl’.s Mem. at 5 n.2. If this is the case, costs and
losses resulting from the nced to repair the press might not fall within the contamination
exclusion. Factory Mutual appears to have conceded as much in a letter from its claims adjuster
to J.L. French: the claims adjuster stated that “[w]e do find a possibility of coverage for the
physical damage sustained by the die itself,” and that “we are willing to concede that this
physical damage [to the dic] is potentially covered.” Def.’s Ex. 9 at 4, 5.

The question that remains, then, is whether any of J.L. French's losses are attributable to



Minute Ones Farm (08/97)

United States District Court, Northern District of Illinois

Name of Assigned Judge Matthew F. Kennelly Sitting Indge if Other
or Magistrate Judge than Assigned Judge
CASE NUMBER 02 C 9479 DATE 7/24/2003
CASE J.L. French Automotive vs. Factory Mutual Insurance
TITLE
[In the Following box (a) indieate the party filing the motion, ¢.g., plaintiff, defendant, 3rd party plaintifY, und (b) state briefly the nature

MOTION: of the mation being presented.]

DOCKET ENTRY:

(1) im Filed motion of [ use listing in “Motion” box above. |

(2) im) Brief in support of motion due.

QB) oO Answer bricf lo motion due__ _._- Reply to answer brief due. .

(4) o Ruling/Hearing on set for cena at

(5) oO Status hearing[held/continued to] [sct for/re-set for] on ______ set for at

(6) QO Pretrial conference[held/continued to] [set for/re-sct for] on set for __ al

(7) a Trial[set for/re-sct for) on at_

(8) im (Bench/Jury trial] [Hearing] held/continued to at

(9) i) This case is dismissed [with/without] prejudice and without costs|by/agreement/pursuant to]

CFRCP4(m) OLocal Rule 41.1 O¥RCP41(a)(1) COFRCP41(a)(2).

(io) 4 [Other docket entry] For the reasons sct forth on the allached Memorandum Opinion and Order,
the defendant's motion for summary (6-1) is granted in part; the Court rules in defendant’s favor on the
contamination issue. Plaintiffs motion for partial summary judgment (9-1) is denied. The case is set for
a status hearing on 8/5/03 at 9:30 a.m. to discuss how to deal with any remaining issues in the case.

al) ff {For further detail sce order attached to the original minute order.]

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covered physical damage. Because the partics have devoted scant attention to this issue, the
Court cannot at this time determine the propriety of summary judgment on this point.
CONCLUSION
For the reasons stated above, the defendant’s motion for summary judgment [No. 6-1] is
granted in part; the Court rules in defendant’s favor on the contamination issue. Plaintiff's
motion for partial summary judgment [No. 9-1] is denied. The case is set for a status hearing on

August 5, 2003 at 9:30 a.m. to discuss how to deal with any remaining issues in the case.

MATTHEW F. KENNELL
United States District Judge
Date: July 23, 2003



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

J..,, FRENCH AUTOMOTIVE )
CASTINGS, INC., )
)

Plaintiff, )

)

vs. ) Case No, 02 C 9479

)

FACTORY MUTUAL INSURANCE )
COMPANY, )
)

Defendant. )

MEMORANDUM OPINION AND ORDER

MATTHEW F, KENNELLY, District Judge:

Plaintiff J.L. French Automotive Castings, Inc. filed this lawsuit against its insurer,
Factory Mutual Insurance Company, in Illinois state court. Factory Mutual removed the action to
federal court on the basis of diversity jurisdiction. J.L. French seeks a declaratory judgment that
its insurance policy covers losses related to an accident at one of its plants and is suing Factory
Mutual for breach of contract for refusing to indemnify J.L. French for those losses. The parties
have filed cross motions for summary judgment. For the reasons stated below, the Court grants
defendant’s motion for summary judgment in part and denies plaintiff's motion.

BACKGROUND

J.L. French manufactures automotive components for sale to car makers. On May 1,
2000, Factory Mutual issued J.L. French an insurance policy covering “all risks of physical loss
or damage.” On September 27, 2001, an operator of a press machine was fatally injured at

plaintiff's Glasgow, Kentucky plant. At the Glasgow plant, J... French operates fourteen press



machines that die cast car paris. The lead operator of casting machine number nine was partially
inside the machine performing an adjustment when another operator inadvertently activated it.
The lead operator was fatally crushed in the press machine’s die.

Following the accident, all presses were temporarily shut down, although production on
presses eleven through fourteen was able to resume later that night. Presses one through ten,
however, used die lubricant from the same tank as machine nine. As a result of the fatal
accident, the dic lubricant contained human remains. Machines one through ten thus had to
remain down until the lubricant was neutralized, removed, the lubricant system cleaned, and the
lubricant replaced. All presses except for machine nine were back in operation by September 30.
Press nine remained down until October 3, when the cleaning process directed by OSHA was
completed for the machine and die. As a result of the shut down, J.L. French claims to have
incurred a loss of roughly $1.4 million stemming from clean-up costs and business interruption.

On October 4, 2001, J.L. French notified Factory Mutual of its loss. On December 10,
Factory Mutual denicd the claim. Although the policy contains a provision whereby Factory
Mutual would indemnify J.L. French for financial losses resulting from “physical loss or damage
of the type insured by this Policy,” Policy at 29-30, Factory Mutual contends that the policy docs
not cover the loss in this case. Factory Mutual relies on a policy provision that excludes
coverage for “contamination, including but not limited to the presence of pollution or hazardous
material,” unless “directly resulting from other physical damage not excluded by this Policy.”
Policy at 28. It contends that pursuant to this clause, the policy does not cover properly damage
that constitutes “contamination,” and it maintains that contamination that is not itself the result of

covered physical damage is likewise not covered under the policy.