Court Opinion

ID: 9850512
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:58:28.935718+00
Date Added: 2024-06-11T09:20:38.334736
License: Public Domain

COYNE, Justice
(dissenting).
Because I, too, am of the view expressed by the majority of federal circuit courts that a construction of the insuring agreements at issue would not afford coverage for remedial measures unilaterally undertaken by industry with neither notice to nor participation by the insurers, I respectfully dissent.
The insuring agreement in the comprehensive general liability insurance policies involved in these cases obligates insurers “[t]o pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury or property damage to which the insurance applies,” caused by an “occurrence” or, in the older policies, by an “accident.” (Emphasis added). I agree with the view of Justice Kelley that the majority’s construction of those insuring agreements completely ignores the as damages phrase and alters the entire meaning of the insuring agreement. The insurers agreed to undertake the risk of paying damages which the insured is legally obligated to pay, not to assume a broad and indefinable obligation to pay any and all sums, whether characterized as damages or otherwise. By refusing to apply the insuring agreement according to its terms, the majority has exceeded definitional limitations, ignoring the plain, ordinary and traditionally accepted meaning of the term “damages” as “only payments to third persons when those persons have a legal claim for damages * * *.” Aetna Casualty & Sur. Co. v. Hanna, 224 F.2d 499, 503 (5th Cir.1955).
It is important to recognize that although both state and federal statutes differentiate between cleanup costs and damages, neither the MPCA nor the EPA sought damages from Minnesota Mining & Manufacturing Company or any of the other respondents here. This factor is important because the parties’ obligations are controlled by the language of the insurance contract which is here written in terms of the relief sought, not in terms of the form of the cause of action. See Maryland Cas. Co. v. Armco, Inc., 822 F.2d 1348, 1352-53 (4th Cir.1987). More simply, the contract refers specifically to “damages” which the insured is required to pay and not to other liabilities imposed on the insured by gov-*187emmental agencies during the course of negotiated remedial efforts. I share the wariness of the fourth circuit when it reasoned as follows:
[E]ven assuming that the costs to the defendant are the same regardless of whether the government sues for restitution or for damages, thus in some sense rendering the decision by the government regarding whether to sue for damages or restitution a “mere fortuity,” it is a great step, and a dangerous one, for courts to begin to construe insurance policies to encompass costs of compliance with injunctive and reimbursement relief.
Id. at 1353. Therefore, while I find no critical distinction between the “legal” as opposed to “equitable” nature of proceedings, I am convinced that careful scrutiny of the insuring agreement requires a focus on the nature of the relief sought.
I am of the opinion that remediation or cleanup costs are more properly characterized as governmental obligations imposed to prevent or mitigate environmental pollution and incurred by industry either as a cost of doing business or as an economic loss associated with the business activity. The insureds here are directed to take prophylactic measures to assure that any pollution infecting specified property (often their own) not be allowed to escape from the confines to cause bodily injury or damage to the property of others. If those measures are inadequate and bodily injury or damage to the property of others occurs, the coverage language of the policy may well be applicable to any legal damages awarded third persons; and it seems to me only fitting that any applicable coverage not have been previously exhausted by expending it on a risk outside the policy coverage.
Finally, the majority casts its analysis in terms of the “reasonable expectations” of the parties, an inquiry apparently designed to construe yesterday’s agreements and intentions by today’s events. The analysis is flawed in two important respects. First, at the time these agreements were executed, there was perhaps little or no understanding of the potential substantial environmental harm from these business activities or any contemplation of protecting industry from costs associated with them. More significantly, it is difficult to accept a claim by these sophisticated parties that they “reasonably expected” coverage and then delayed for a period from four to eight years in informing their insurers of either the ongoing investigations and negotiations with the state to remedy or eliminate any environmental harm occasioned by their activities or their unilateral compliance with governmental cleanup directives. As a practical matter, the actions of the insureds are wholly inconsistent with their claim that coverage was contemplated.
In summary, I am troubled by the majority’s efforts to shift the considerable cost burden from the industry whose intentional activities have sullied the environment to the insurer under the guise of a claimed ambiguity in the language of the insuring agreements. I further caution the majority that the cases are before this court on questions certified by the federal court and our consideration should be limited to an inquiry of whether cleanup costs are “damages” within the meaning of the comprehensive general liability policy. We are not asked to and cannot address questions such as whether there is property damage to which the policy applies, whether it was caused by an “occurrence” or an “accident” within the meaning of the policy or any matters relating to applicable statutes of limitation or the provision of notice by the insured to the insurer. The response to the questions certified is but one of a series of threshold questions, the accumulated responses to which will lead to the ultimate determination of whether coverage is available and our record is incomplete as to these other matters.