Title: General Casualty Company of Wisconsin v. Donald A. Hills
Citation: N/A
Docket Number: 1995AP002261
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: April 22, 1997

SUPREME COURT OF WISCONSIN 
 
 
Case No.: 
95-2261 
 
 
Complete Title 
of Case: 
 
General Casualty Company of Wisconsin, 
 
Plaintiff-Respondent-Petitioner, 
 
v. 
Donald A. Hills, d/b/a Hills Standard, 
 
Defendant-Appellant, 
ABC Insurance Company and DEF Insurance Company, 
 
Defendants. 
 
 
 
 
 
 
 
 
 
 
 
 
ON REVIEW OF A DECISION OF THE COURT OF APPEALS 
Reported at:  201 Wis. 2d 1, 548 N.W.2d  100 
 
 
 
 
(Ct. App. 1996) 
 
 
 
 
PUBLISHED 
 
 
Opinion Filed: 
April 22, 1997 
Submitted on Briefs: 
 
Oral Argument: 
January 28, 1997 
 
 
Source of APPEAL 
 
COURT: 
Circuit 
 
COUNTY: 
Barron 
 
JUDGE: 
Edward R. Brunner 
 
 
JUSTICES: 
 
Concurred: 
Abrahamson, C.J., concurs (opinion filed) 
 
Dissented: 
 
 
Not Participating:  
 
 
ATTORNEYS: 
For the plaintiff-respondent-petitioner there 
were briefs by Thomas N. Harrington, Lee Anne N. Conta, Laura E. 
Schuett  and Cook & Franke, S.C., Milwaukee and oral argument by 
Thomas N. Harrington. 
 
 
For the defendant-appellant there was a brief by 
Matthew A. Biegert and Doar, Drill & Skow, S.C., New Richmond and 
oral argument by Matthew A. Biegert. 
 
 
 
 
 
Amicus curiae brief was filed by Timothy J. 
Muldowney, Jeffrey J. Kassel and LaFollette & Sinykin, Madison 
and Richard M. Hagstrom and Zelle & Larson, Minneapolis, MN for 
the Alliance of American Insurers. 
 
 
Amicus curiae brief was filed by Richard C. 
Ninneman, Jeffrey O. Davis, Joan M. Harms and Quarles & Brady, 
Milwaukee for the Wisconsin Realtors Association, Building Owners 
and Managers Association and the Wisconsin Association for 
Environmental Insurance Protection. 
 
 
Amicus curiae brief was filed by Raymond R. 
Krueger, Cynthia E. Smith and Michael Best & Friedrich, Milwaukee 
for the Association of Environmentally Responsible Businesses, 
Inc., Associated General Contractors of Greater Milwaukee, Inc., 
Counsel of Small Business Executives, Petroleum Marketers 
Association of Wisconsin, Wisconsin Fabricare Institute, Inc.,  
Wisconsin Automotive Trade Association and Wisconsin Federation 
of Cooperatives. 
 
 
Amicus curiae was filed by Michael D. Flanagan, 
Thomas C. Ewing, Mary K. Braza, Lisa S. Neubauer and Foley & 
Lardner, Milwaukee for The Wisconsin Policyholders Association. 
 
 
Amicus curiae was filed by Robert C. Burrell, 
Stephen M. Compton and Borgelt, Powell, Peterson & Frauen, S.C., 
Milwaukee and of counsel Laura A. Foggan, Matthew Chavez and 
Wiley, Rein & Fielding, Washington, D.C., for the Wisconsin 
Insurance Alliance and National Association of Independent 
Insurers. 
 
 
 
No.  17053.rtf 
 
 
1 
 
NOTICE 
This opinion is subject to further editing 
and modification.  The final version will 
appear in the bound volume of the official 
reports. 
 
 
No. 95-2261 
 
STATE OF WISCONSIN               :        
        
 
 
 
 
IN SUPREME COURT 
 
 
General Casualty Company of Wisconsin, 
 
  
Plaintiff-Respondent-Petitioner, 
 
 
v. 
 
Donald A. Hills, d/b/a Hills Standard, 
 
 
Defendant-Appellant,  
 
ABC Insurance Company and DEF Insurance 
Company, 
 
          Defendants. 
 
FILED 
 
APR 22, 1997 
 
Marilyn L. Graves 
Clerk of Supreme Court 
Madison, WI 
 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed and 
cause remanded. 
¶1 
N. PATRICK CROOKS, J.  General Casualty Company of 
Wisconsin ("General Casualty") seeks review of a published 
decision of the court of appeals,
1 which reversed a judgment of 
the Circuit Court of Barron County, Judge Edward R. Brunner, 
presiding.  The circuit court granted summary judgment in favor 
of General Casualty on the grounds that it has no duty to defend 
or indemnify its insured, Donald Hills ("Hills"), in a third-
                     
1  General Cas. Co. v. Hills, 201 Wis. 2d 1, 548 N.W.2d 100 
(Ct. App. 1996) (hereinafter "Hills"). 
 
 
No.  17053.rtf 
 
 
2 
party action seeking recovery for environmental response costs. 
  The circuit court concluded that no duty to defend or 
indemnify exists because, under City of Edgerton v. General Cas. 
Co., 184 Wis. 2d 750, 517 N.W.2d 463 (1994), cert. denied, 115 
S. Ct. 1360, 2615 (1995) (hereinafter "Edgerton"), the action is 
not a suit seeking "damages."  The court of appeals reversed, 
concluding that because parties other than the Environmental 
Protection Agency ("EPA") or the Department of Natural Resources 
("DNR") are seeking monetary compensation for contamination 
Hills allegedly inflicted on property that does not fall within 
the policies' owned-property exclusion,
2 the action is a suit 
seeking "damages" under the policies at issue.  We agree with 
the court of appeals that our decision in Edgerton does not 
relieve General Casualty of its duty to defend Hills, and that 
this interpretation is in accord with the expectations of a 
reasonable insured.  Thus, we affirm the decision of the court 
of appeals. 
                     
2  The policies at issue contain an owned-property 
exclusion, which excludes coverage for: 
a. 
Property 
owned, 
rented 
or 
occupied 
by 
the 
"insured;" 
b. 
Property loaned to the "insured;" 
c. 
Property held for sale or being transported by 
the "insured;" or  
d. 
Property in the "insured's" care, custody or 
control. 
(R.6 at 105).  All of the policies contain exclusions with 
substantially similar language.  (See id. at 7, 20, 33, 64, 149, 
194.) 
 
 
No.  17053.rtf 
 
 
3 
I. 
¶2 
The relevant facts are not in dispute.  Since 1961, 
Hills has owned and operated Don's Standard
3 in Rice Lake, 
Wisconsin. In the regular and normal course of business, Hills 
contracted with Arrowhead Refining Company ("Arrowhead") to pick 
up waste from Don's Standard.  Arrowhead transported the waste 
and deposited it at Arrowhead's waste oil recycling business in 
Hermantown, Minnesota ("Arrowhead site" or "site").  Arrowhead 
operated this business from approximately 1961 to 1977. 
¶3 
In September 1984, the EPA placed the Arrowhead site 
on the National Priorities List
4 by publication in the Federal 
Register.  See 49 Fed. Reg. 37084 (1984).  The EPA then began a 
Remedial Investigation and Feasibility Study, which determined 
that the recycling activities of Arrowhead had contaminated the 
site. 
¶4 
In 1989, the United States filed suit in the United 
States District Court for the District of Minnesota, Fifth 
Division, against Arrowhead and fourteen additional defendants, 
seeking declaratory relief and recovery of response costs.  On 
January 30, 1991, thirteen of these defendants, including 
                     
3  As the court of appeals noted, the record contains 
discrepancies as to whether Hills' business is called "Don's 
Standard" or "Hills Standard."  Hills, 201 Wis. 2d at 4 n.1.  In 
accord with the court of appeals' decision, we refer to the 
business as "Don's Standard." 
4  See 40 C.F.R. pt. 300, app. B. (1985).  The National 
Priorities List is a list of hazardous waste sites posing the 
greatest threat to health, welfare, and the environment.  The 
Arrowhead site remains on the list today.  See 40 C.F.R. pt. 
300, app. B (1996).  
 
 
No.  17053.rtf 
 
 
4 
Arrowhead,
5 filed a third-party complaint against Hills and 
hundreds of other parties,
6 seeking recovery for response costs 
associated with the site.  In the third-party complaint, 
Arrowhead makes four specific claims against Hills, based on:  
(1) the Comprehensive Environmental Response, Compensation, and 
Liability Act ("CERCLA");
7 (2) the Minnesota Environmental 
Response 
and 
Liability 
Act 
("MERLA");
8 
(3) common 
law 
contribution; and, (4) unjust enrichment.   
¶5 
Hills and General Casualty entered into a series of 
"combination service station" policies from June 18, 1976, to 
June 18, 1979, and a series of "garage" policies from June 18, 
1988, to June 18, 1991.
9  The policies in force from June 18, 
1976 to June 18, 1979 provide: 
                     
5  For the remainder of this opinion, these third-party 
plaintiffs 
are 
collectively 
referred 
to 
as 
"Arrowhead," 
consistent with the court of appeals' decision.  See Hills, 201 
Wis. 2d at 4. 
6  Not all third-party plaintiffs filed claims against all 
third-party defendants.   
7  CERCLA is codified at 42 U.S.C. §§ 9601-75 (1994).    
8  MERLA is codified at Minn. Stats. §§ 115B.01-115B.51 
(1996). 
9   Combination service station and garage policies are 
types of liability insurance.  See 1 Lee R. Russ, Couch on 
Insurance § 1:34, at 48-49 (3d ed. 1996).  Accordingly, these 
policies serve the same purpose as a comprehensive general 
liability ("CGL") policy, which is to protect an insured from 
negligent acts resulting in damage to third parties.  See id. 
(explaining purpose of garage policies); Arnold P. Anderson, 
Wisconsin Insurance Law, § 5:14, at 136 (3d ed. 1990 & Supp. 
1997) (explaining purpose of CGL policies).  Therefore, the 
liability portion of combination service station and garage 
policies contains language that is nearly identical to CGL 
policies.        
 
 
No.  17053.rtf 
 
 
5 
 
General 
Casualty 
Company . . . [a]grees 
with 
the 
insured . . . [t]o pay on behalf of the insured all 
sums which the insured shall become legally obligated 
to pay as damages because of injury to or destruction 
of property, including the loss of use thereof, caused 
by accident and arising out of the hazards hereinafter 
defined.   
(R. 6 at 6, 19, 32.)  Likewise, the policy in force from June 
18, 1987 to June 18, 1988 provides:   
 
We will pay all sums the insured legally must pay as 
damages because of bodily injury or property damage to 
which this insurance applies caused by an accident and 
resulting from garage operations. 
 
(R. 6 at 63) (emphasis original in policies.)  The policies in 
force from June 18, 1988 to June 18, 1991 contain the same 
language as the 1987-88 policy.  (R. 6 at 103, 147, 192.) 
¶6 
On 
January 
19, 
1995, 
General 
Casualty 
filed 
a 
declaratory judgment action, requesting the circuit court to 
determine that General Casualty has no duty to defend or 
indemnify Hills in the third-party action under these policies. 
 On February 16, 1995, Hills counterclaimed, asserting that 
General Casualty had breached its contractual duties to defend 
and indemnify him, and had acted in bad faith.  On May 8, 1995, 
General Casualty moved for summary judgment, on the grounds that 
the third-party action seeks recovery for response costs, and 
therefore is not a suit seeking "damages," based on Edgerton.
10  
The circuit court agreed, granting the motion for summary 
judgment at a hearing held on June 12, 1995. 
¶7 
The court of appeals reversed.  The court of appeals 
emphasized the factual distinctions between this case and 
                     
10  General Casualty did not assert any other grounds in 
support of its motion for summary judgment. 
 
 
No.  17053.rtf 
 
 
6 
Edgerton.  In particular, the court of appeals indicated that in 
Edgerton, the DNR sent the insureds a letter directing them to 
propose a plan to remediate the landfill.  General Cas. Co. v. 
Hills, 201 Wis. 2d 1, 11, 548 N.W.2d 100 (Ct. App. 1996) 
(hereinafter "Hills").  In addition, the court of appeals noted 
that unlike the insureds in Edgerton, Hills does not own, lease, 
or 
control 
the 
contaminated 
property. 
 
Id. 
at 
10-12.  
Accordingly, 
the 
court 
found 
it 
significant 
that 
the 
contaminated property does not fit within the owned-property 
exclusion contained in the policies.  Based on these factual 
distinctions, the court of appeals concluded that the action is 
a suit seeking "damages."  Id. at 12.  The court indicated that 
this result is consistent with the purpose of a comprehensive 
general liability ("CGL") policy.  Id.  
II. 
¶8 
The issue before us is whether the action Arrowhead 
filed against Hills seeks "damages" as that word is used in the 
insurance 
policies 
General 
Casualty 
issued 
to 
Hills.  
Accordingly, we emphasize from the outset that the focus of this 
case is on the interpretation of insurance policies, not on 
environmental law. 
¶9 
In the absence of extrinsic evidence, this court 
determines the interpretation of an insurance policy as a matter 
of law, without deference to the lower courts.  See, e.g., 
Sprangers v. Greatway Ins. Co., 182 Wis. 2d 521, 532, 514 N.W.2d 
1 (1994); Maas v. Ziegler, 172 Wis. 2d 70, 79, 492 N.W.2d 621 
(1992).  In addition, when reviewing a grant of summary 
judgment, this court applies the standards set forth in Wis. 
 
 
No.  17053.rtf 
 
 
7 
Stat. § 802.08, in the same way the circuit court applies them. 
 See, e.g., Sprangers, 182 Wis. 2d at 531; Maas, 172 Wis. 2d at 
78. 
¶10 In 
general, 
the 
interpretation 
of 
an 
insurance 
contract is controlled by principles of contract construction.  
See, e.g., Kuhn v. Allstate Ins. Co., 193 Wis. 2d 50, 60, 532 
N.W.2d 124 (1995); Maas, 172 Wis. 2d at 79.  The primary 
objective in interpreting a contract is to ascertain and carry 
out the intentions of the parties.  See, e.g., Maas, 172 Wis. 2d 
at 79; Kremers-Urban Co. v. American Employers Ins. Co., 119 
Wis. 2d 722, 735, 351 N.W.2d 156 (1984).   "Of primary 
importance is that the language of an insurance policy should be 
interpreted to mean what a reasonable person in the position of 
the 
insured 
would 
have 
understood 
the 
words 
to 
mean."  
Sprangers, 182 Wis. 2d at 536; accord, e.g., Kuhn, 193 Wis. 2d 
at 60; Kremers-Urban Co., 119 Wis. 2d at 735.  
¶11 This case specifically involves the duty to defend.
11  
"An insurer's duty to defend the insured in a third-party suit 
                     
11  General Casualty claims that it has no duty to defend or 
indemnify Hills.  "Policies of liability insurance impose two 
duties on the insurer with respect to the insuredthe duty to 
indemnify and the duty to defend."  Wood v. American Fam. Mut. 
Ins. Co., 148 Wis. 2d 639, 651, 436 N.W.2d 594 (1989) (quoting 
Gross v. Lloyds of London Ins. Co., 121 Wis. 2d 78, 84, 358 
N.W.2d 266 (1984)), overruled in part on other grounds, 
Matthiesen v. Continental Cas. Co., 193 Wis. 2d 192, 532 N.W.2d 
729 (1995) (emphasis omitted).  The duty to defend is broader 
than the duty to indemnify, because the duty to defend is 
triggered by arguable, as opposed to actual, coverage.  See 
Newhouse v. Citizens Sec. Mut. Ins. Co., 176 Wis. 2d 824, 834-
35, 501 N.W.2d 1 (1993); Elliott v. Donahue, 169 Wis. 2d 310, 
320, 485 N.W.2d 403 (1992).  In this case, we only consider 
General Casualty's duty to defend, because the duty to indemnify 
issue must await resolution of the claim brought by Arrowhead 
against Hills.  See Newhouse, 176 Wis. 2d at 834-36. 
 
 
No.  17053.rtf 
 
 
8 
is predicated on allegations in a complaint which, if proven, 
would give rise to the possibility of recovery that falls under 
the terms and conditions of the insurance policy."  School Dist. 
of Shorewood v. Wausau Ins. Cos., 170 Wis. 2d 347, 364, 488 
N.W.2d 82 (1992) (hereinafter "Shorewood"); accord Elliott v. 
Donahue, 169 Wis. 2d 310, 320-21, 485 N.W.2d 403 (1992).  Thus, 
the duty to defend is controlled by the nature of the claim, not 
by the claim's merits.  See Shorewood, 170 Wis. 2d at 364; 
Elliott, 169 Wis. 2d at 321.  If there is any doubt regarding 
the duty to defend, it must be resolved in favor of the insured. 
 See Shorewood, 170 Wis. 2d at 364; Elliott, 169 Wis. 2d at 321.  
¶12 Therefore, in order to decide whether General Casualty 
has a duty to defend Hills, we must compare the third-party 
complaint to the insurance policies at issue and determine 
whether, if the allegations are proven, General Casualty will be 
required to pay the resulting judgment.  See Shorewood, 170 Wis. 
2d at 364-65.  General Casualty contends that it would not be 
required to pay a resulting judgment, because the policies limit 
coverage to all sums Hills is legally obligated to pay "as 
damages," and the word "damages" does not include reimbursement 
for remediation and response costs.
12   
¶13 This court has considered the "as damages" insurance 
language in two recent cases.  First, in School Dist. of 
Shorewood v. Wausau Ins. Cos., 170 Wis. 2d 347, 488 N.W.2d 82 
(1992), this court considered whether a third-party action 
seeking declaratory and injunctive relief to remedy alleged 
                     
12  Note that the policies at issue do not define the phrase 
"as damages" or the term "damages." 
 
 
No.  17053.rtf 
 
 
9 
intentional discrimination and racial segregation by two school 
districts was a suit seeking "damages" under an insurance 
policy.  Id. at 355-56.  The court concluded that the word 
"damages" as used in an insurance policy "unambiguously means 
legal damages.  It is legal compensation for past wrongs or 
injuries and is generally pecuniary in nature."  Id. at 368.  
¶14 The Shorewood court further explained that judicial 
remedies fall into four major categories: damages remedies, 
restitutionary remedies, coercive remedies, and declaratory 
remedies.  Id. at 368.  The court defined damages remedies as 
substitutionary, 
remedial 
relief 
for 
past 
wrongs. 
 
In 
particular, the court stated: 
 
The damages award is substitutionary relief, that is, 
it gives the plaintiff money mainly by way of 
compensation, to make up for some loss, but one 
ordinarily may be measured in money . . . . By way of 
contrast, specific remedies in law or equity, such as 
replevin and ejectment at law, or injunction or 
specific performance in equity, are not substitute 
remedies at all, but attempt to give the plaintiff the 
very thing to which he was entitled. 
Id. at 369 (quoting Dobbs, Handbook on the Law of Remedies 
§ 3.1, at 135 (1973)) (emphasis original).  However, the court 
indicated that "[a] classification based on the form of the 
action, as either equitable or legal, is irrelevant" to the 
determination of whether the remedy sought constitutes damages. 
 Id.  Instead, the focus is on the nature of the remedy sought. 
  Id. at 369-70.  Specifically, damages "are remedial in nature, 
not preventive."  Id. at 370.  Applying these principles, the 
court determined that the costs of complying with an injunction 
are not damages, because an injunction is designed to prevent 
 
 
No.  17053.rtf 
 
 
10
injury, not compensate for past wrongs through substitutionary 
relief.  Id. at 374-75. 
 ¶15 Second, in City of Edgerton v. General Cas. Co., 184 
Wis. 2d 750, 517 N.W.2d 463 (1994), cert. denied, 115 S. Ct. 
1360, 2615 (1995), this court considered whether the insureds' 
receipt of letters from the Wisconsin DNR requesting remediation 
of a contaminated site triggered the insurers' duty to defend.  
Specifically, Edgerton Sand & Gravel ("ES&G") owned a landfill 
in Rock County, which was leased by the City of Edgerton 
("City") as a landfill site from 1968 to 1984.
13  Id. at 758-59. 
 In 1978, the DNR informed ES&G by letter that it suspected 
contamination in and around the landfill site.  Id. at 759, n.7. 
 On December 30, 1984, after volatile organic compounds ("VOCs") 
were detected in the groundwater, ES&G closed and capped the 
landfill.  Id. at 759-60.  On June 22, 1989, the EPA notified 
ES&G and the City by letter that that it was investigating the 
site, and requested that they provide certain information to the 
DNR.  Id. at 760.  In February 1990, the DNR sent certified 
letters to the City and ES&G, giving each thirty days to propose 
a plan for remediation.  Id. at 760.  ES&G and the City 
forwarded these letters to their insurance carriers, who denied 
coverage and a defense to both parties.  Id. at 762.  ES&G and 
the City subsequently filed a declaratory action, seeking a 
                     
13  As specified by this court in Edgerton, the site of the 
landfill was owned by the Sweeney family, who also owned ES&G. 
City of Edgerton v. General Cas. Co., 184 Wis. 2d 750, 758 n.5, 
517 N.W.2d 463 (1994), cert. denied, 115 S. Ct. 1360, 2615 
(1995) (hereinafter "Edgerton").  The property, therefore, was 
within the owned-property exclusion of the policies at issue.  
 
 
No.  17053.rtf 
 
 
11
determination that their insurers had a duty to defend and 
indemnify them for any liability arising out of DNR or EPA 
claims.  Id.  
¶16 This court initially determined that the letters ES&G 
and the City received from the DNR did not constitute a "suit" 
as that term was used in their insurance policies.  Id. at 766-
82.  This court next turned to the issue of whether remediation 
and response costs assigned under CERCLA or equivalent state 
statutes constitute "damages" as that term was used in the 
insurance policies.  The court indicated that remediation and 
response costs "are, by definition, considered to be equitable 
relief and reflect a congressional intent to differentiate 
between cleanup or response costs . . . and damages for injury, 
destruction, or the loss of natural resources . . . ."  Id. at 
784.  The court therefore determined: 
 
[A]s an equitable form of relief, response costs were 
not designed to compensate for past wrongs; rather, 
they were intended to deter any future contamination 
by means of injunctive action, while providing for 
remediation and cleanup of the affected site.  This 
type of relief is distinct from that which is 
substitutionarymonetary compensation provided to make 
up for a claimed loss. 
Id. at 785 (citing Shorewood, 170 Wis. 2d at 369).  Thus, the 
court held the insurers did "not have a duty to defend against 
the actions of the EPA and the DNR, requesting environmental 
cleanup, because no suit seeking damages has been filed against 
the insureds."  Id. at 786. 
¶17  Shorewood and Edgerton demonstrate that in order to 
determine whether an action seeks "damages," we must consider 
the nature of the relief being soughtwhether it is remedial, 
 
 
No.  17053.rtf 
 
 
12
substituionary relief that is intended to compensate for past 
wrongs, or preventive and focusing on future conduct.  Applying 
this definition to the present case, we consider it relevant 
that this case is factually distinguishable from Edgerton and 
Shorewood in three pertinent ways.  First, unlike Edgerton, 
neither the EPA nor DNR have requested or directed Hills to 
develop a remediation plan or incur remediation and response 
costs under CERCLA or an equivalent state statute.  Second, 
unlike Edgerton, the contaminated property in this case does not 
fit within the owned-property exclusion contained in the 
insurance policies.
14  Third, unlike Shorewood, Hills is not 
being sued to comply with an injunction.   
¶18 In this case, Arrowhead does not want Hills to take, 
or refrain from taking, any action.  Instead, Arrowhead seeks 
substitutionary, monetary relief to compensate for the losses 
they may incur.  The remedy that Arrowhead seeks is intended to 
compensate for past wrongs, not to prevent future harm.  Thus, 
under the definition set forth and applied in Shorewood and 
Edgerton, Arrowhead is seeking "damages" from Hills as that word 
is used in the insurance policies at issue.  Accordingly, 
Edgerton does not relieve General Casualty of its duty to defend 
Hills. 
                     
14 
The Edgerton court did not reach the owned-property 
exclusion.  However, the court did indicate that the Sweeney 
family, who also owned ES&G, owned the landfill site, and that 
the City leased the landfill site.  Therefore, the contaminated 
land at the site would appear to fall within the owned-property 
exclusion of both ES&G and the City's CGL policies. 
 
 
No.  17053.rtf 
 
 
13
¶19 Our conclusion that Arrowhead is seeking legal damages 
to compensate Arrowhead for past wrongs is in accord with 
established Wisconsin precedent.  It has long been the law of 
this state that the cost of repairing and restoring damaged 
property and water to its original condition is a proper measure 
of compensatory damages.  See Jost v. Dairyland Power Coop., 45 
Wis. 2d 164, 172 N.W.2d 647 (1969); Anstee v. Monroe Light & 
Fuel Co., 171 Wis. 291, 177 N.W. 26 (1920); Pedelty v. Wisconsin 
Zinc Co., 148 Wis. 245, 134 N.W. 356 (1912); Fortier v. Flambeau 
Plastics Co., 164 Wis. 2d 639, 476 N.W.2d 593 (Ct. App.), review 
denied, 479 N.W.2d 172 (1991).  See generally 1 Russell M. Ware, 
The Law of Damages in Wisconsin §§ 18.4 & 18.22 (1988 & Supp. 
1996); Wis JICivil 1804.  For example, in Nischke v. Farmers & 
Merchants Bank & Trust, 187 Wis. 2d 96, 522 N.W.2d 542 (Ct. 
App.), review denied, 527 N.W.2d 335 (1994), the court of 
appeals concluded that if Farmers & Merchants Bank, the owner of 
an underground storage tank, negligently caused a leak in the 
tank and thereby polluted Nischke's property, Nischke could 
recover the costs she expended to remediate her land in response 
to letters she received from the DNR.  Id. at 120.  The court 
indicated:  "[A]ssuming the bank was the negligent cause of the 
leak, its negligence has made Nischke legally obligated to incur 
costs to restore her property.  These are recoverable as the 
normal measure of compensatory damages . . . ."  Id. (emphasis 
added).   
 
 
No.  17053.rtf 
 
 
14
¶20 The passage of CERCLA and similar state statutes has 
not changed the law of remedies.
15  Therefore, regardless of the 
nature of the underlying claim made by the United States against 
Arrowhead, the fundamental remedy Arrowhead seeks from Hills is 
compensatory 
damages 
for 
the 
past 
injuries 
he 
allegedly 
inflicted on the Arrowhead site. 
¶21 Consequently, the nature of the relief being sought by 
Arrowhead is different than that sought by the DNR in Edgerton. 
 We therefore reject General Casualty's assertion that we must 
overrule Edgerton in order to hold that the suit in this case 
seeks 
"damages." 
 
Edgerton 
continues 
to 
stand 
for 
the 
proposition that receipt of a letter from the EPA or DNR 
requesting a party to propose a remediation plan does not 
constitute a "suit seeking damages."   
¶22 We also reject General Casualty's contention that we 
must overrule Whirlpool Corp. v. Ziebert, 197 Wis. 2d 144, 539 
N.W.2d 883 (1995), in order to hold that the action seeks 
"damages."  In Whirlpool Corp., this court concluded that a 
family member exclusion clause in a homeowner's insurance policy 
barred coverage for a third-party contribution claim brought 
                     
15 See 42 U.S.C. § 9652(d) ("Nothing in this Act shall 
affect or modify in any way the obligations or liabilities of 
any person under other Federal or State law, including common 
law, with respect to releases of hazardous substances or other 
pollutants or contaminants."); Wis. Stat. § 144.442(11) ("No 
common law liability . . . for damages resulting from a site or 
facility is affected in any manner by this section.  The 
authority, power and remedies provided in this section are in 
addition to any authority, power or remedy provided . . . at 
common law."). 
 
 
No.  17053.rtf 
 
 
15
against the insured.
16  Id. at 147.  Accordingly, Whirlpool Corp. 
involved an entirely different insurance provision than is at 
issue here.  Because Whirlpool Corp. is distinguishable from the 
present case, we need not overrule it.   
¶23 We emphasize that our interpretation of the "as 
damages" 
language 
in 
this 
case 
is 
in 
accord 
with 
the 
"expectations of a reasonable person in the position of the 
insured." Sprangers, 182 Wis. 2d at 536; accord, e.g., Kuhn, 193 
Wis. 2d at 60; Kremers-Urban Co., 119 Wis. 2d at 735.  A 
reasonable person in the position of Hills would expect coverage 
due to the purpose of liability policies.  "The CGL policy was 
designed to protect an insured against liability for negligent 
acts resulting in damage to third parties."
17  Arnold P. 
Anderson, Wisconsin Insurance Law § 5.14, at 136 (3d ed. 1990 & 
Supp. 1997); accord Bausch & Lomb Inc. v. Utica Mut. Ins. Co., 
625 A.2d 1021, 1033 (Md. 1993); Robert D. Chesler et al., 
                     
16  Specifically, in Whirlpool Corp. v. Ziebert, 197 Wis. 2d 
144, 539 N.W.2d 883 (1995), the insured brought an action 
against Whirlpool, the manufacturer of a meat grinder, for 
injuries the meat grinder allegedly caused to the insured's 
daughter.  Id. at 147-48.  Whirlpool subsequently brought a 
contribution action against the insured and the insured's 
homeowner's liability insurer, alleging that the insured was 
negligent in the supervision of her daughter.  Id. at 148.  A 
family exclusion clause in the insurance policy provided that 
the insurer did "not cover bodily injury to an insured person 
 . . . whenever any benefit of this coverage would accrue 
directly or indirectly to an insured person."  Id. at 153.  The 
court concluded that this provision excluded coverage because 
the contribution action, if successful, would indirectly benefit 
the daughter.  Id. at 153-55. 
17  As previously explained, see supra p. 4 n. 9, 
combination service station and garage policies serve the same 
purpose as CGL policies.  
 
 
No.  17053.rtf 
 
 
16
Patterns of Judicial Interpretation of Insurance Coverage for 
Hazardous Waste Site Liability, 18 Rutgers L.J. 9, 14 (1986).  A 
general liability policy is distinct from an "all-risks" policy, 
which also covers losses sustained by the insured.  Bausch & 
Lomb, Inc., 625 A.2d at 1033.  This is evidenced by the words of 
the policies at issue.  For example, General Casualty agreed to 
"pay all sums the insured legally must pay as damages because of 
bodily injury or property damage to which this insurance applies 
caused by an accident and resulting from garage operations."  
(R. 6 at 63) (emphasis omitted).
18  "Property damage" is defined 
as "the damage to or loss of use of tangible property."  (Id.)  
The policies expressly exclude coverage for property owned, 
rented, or occupied by the insured, among other things.  See 
supra p. 2 n. 2 of this opinion.  Therefore, General Casualty 
agreed to cover only those damage that Hills negligently caused 
to a third party's property.    
¶24 Accordingly, because liability policies are intended 
to protect insureds from negligent acts resulting in damage to 
third parties, "an insured, when buying comprehensive general 
liability coverage, expects that any activity resulting in 
unintended and unexpected . . . property damage to a third party 
will be covered unless it is specifically excluded."  Chesler, 
supra, at 69-70 (emphasis added).  Thus, a reasonable insured in 
the position of Hills would interpret the phrase "as damages" to 
include coverage for a claim, brought by parties other than the 
EPA or DNR, which obligates him or her to pay monetary sums 
                     
18  All of the policies contain similar language.  See supra 
pp. 4-5. 
 
 
No.  17053.rtf 
 
 
17
because of the negligent contamination of property that does not 
fit within the owned-property exclusion, since this is the very 
reason that an individual purchases liability coverage.  
¶25 In conclusion, we hold that because parties other than 
the EPA and DNR are seeking compensatory, monetary relief for 
losses they may incur due to Hills' alleged past contamination 
of property that does not fit within the policies' owned-
property exclusion, the action seeks "damages" as that word is 
used in the policies at issue.  Therefore, our decision in 
Edgerton does not relieve General Casualty of its duty to defend 
Hills.  This interpretation is in accord with the expectations 
of a reasonable insured in the position of Hills.  We therefore 
remand this case to the circuit court for further proceedings 
consistent with this decision.      
By the Court.—The decision of the court of appeals is 
affirmed and the cause is remanded. 
 
 
No. 95-2261.ssa   
 
1 
¶26 SHIRLEY S. ABRAHAMSON, CHIEF JUSTICE (concurring).   I 
agree with the result reached by the majority opinion. I write 
separately to point out that I believe the majority opinion 
marks a significant step towards overruling Shorewood,
19 upon 
which Edgerton
20 relied in its dictum defining damages.  
¶27 Rather than leaving Shorewood and Edgerton to be 
overturned in small measures by debatable judicial distinctions, 
I would embrace the inevitable now by expressly overruling 
Shorewood and thereby recognizing the limited application of the 
Edgerton decision on damages. 
 
 
 
                     
19 School Dist. of Shorewood v. Wausau Ins. Co., 170 Wis. 2d 
347, 488 N.W.2d 82 (1992) (on motion for reconsideration; 
withdrawing 168 Wis. 2d 390, 484 N.W.2d 314). 
20 City of Edgerton v. General Casualty Co. of Wisconsin, 
184 Wis. 2d 750, 517 N.W.2d 463 (1994).