Court Opinion

ID: 9850511
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:58:28.932478+00
Date Added: 2024-06-11T09:20:38.333243
License: Public Domain

KELLEY, Justice
(dissenting).
I respectfully dissent. The comprehensive liability insurance policies involved in these cases contain substantially identical language obligating the insurer involved “to pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of * * * property damage to which the insurance applies, caused by an occurrence.” (Emphasis added). The construction of that insuring agreement adopted by the majority completely ignores the as damages phrase and changes the whole meaning of the insuring agreement from one in which the insurer assumes the risk to pay damages to one obligating it to pay all sums whether damages or otherwise. To afford the word “damages” as employed in the insuring agreement the broad and literally boundless connotation that the majority would give it, the words, as used, become mere surplusage because any obligation to pay would be covered no matter how it arose or what it was intended to cover. Maryland Casualty Co. v. Armco, Inc., 822 F.2d 1348, 1352 (4th Cir.1987), cert. denied, 484 U.S. 1008, 108 S.Ct. 703, 98 L.Ed.2d 654 (1988). I agree with the holding in Continental Ins. Co. v. Northeastern Pharmaceutical & Chem. Co., 842 F.2d 977 (8th Cir.) (en banc), cert. denied, 488 U.S. 821, 109 S.Ct. 66, 102 L.Ed.2d 43 (1988) [hereinafter NEPACCO ], as well as with the near unanimous holdings of the several United States Courts of Appeal which have considered the issue,1 that even *185though “damages” in the abstract may be considered to be an ambiguous term, when the word is inserted in a comprehensive liability insurance policy in the context of a sentence which defines the scope of the insurer’s liability as one “to pay all sums which the insured shall become legally obligated to pay as damages * * * because of property damage * * * ” it is no longer ambiguous. The plain meaning of the term as so employed refers to legal damages, and not to equitable-like remediation damages. Accordingly, I respectfully dissent.
By holding that the comprehensive general insurance policies here involved provide coverage to reimburse corporate polluters for response clean-up costs, some of which they more or less voluntarily assumed by agreement with the state without consent of the concerned insurers upon whom they now call for reimbursement, the majority opinion, it seems to me, disregards long established insurance policy language construction rules. These rules prohibit courts from reading ambiguity into the plain language of a policy simply in order to provide coverage. See, e.g., Farkas v. Hartford Accident & Indem. Co., 285 Minn. 324, 327, 173 N.W.2d 21, 24 (1969), Columbia Heights Motors, Inc. v. Allstate Ins. Co., 275 N.W.2d 32, 36 (Minn. 1979). In so doing, the majority finds ambiguity, not with reference to how the term “damages” is employed in the context of the policy language, but rather in reliance on abstract definitions of the term “damages” found in standard dictionaries. A valid argument could be advanced that such reference might be relevant to this construction issue had the insureds in these cases been lay persons, unsophisticated in the acquisition of liability insurance coverage, and had they been afforded liability coverage more or less on a “take it or leave it” basis under circumstances resulting in what might be considered to be a contract of adhesion. In my view, however, that reference was inappropriate to the construction of the questioned phrase in the policies. No evidence exists that these policies were issued on a “take it or leave it” basis. From the limited evidence surrounding the execution of these policies, it clearly appears to me that it is much more probable that the policies in question were negotiated between large corporations, each of which had access to sophisticated insurance and legal departments or advice. I submit in such circumstances the invocation by the majority of the construction precept sometimes referred to as contra preferentem, that ambiguous language be construed against the insurer in accordance with the reasonable expectations of the insureds, is inapt. The fact of the matter is that when these policies were negotiated decades ago neither party had any idea that legislation similar to the superfund laws would impose such unlimited liabilities on polluters for remediation or clean-up costs; the risk was neither contemplated nor was its assumption by the insurers bargained for when the premium was set.
Long before the advent of superfund laws, property owners had tort liability for damages caused to others by activities conducted on their property. The insurance policies involved in these cases clearly contemplated shifting the property owners’ risk for that type of damage to the insurers, and were that the issue in these three cases, I am sure unanimity would dictate the insurers bore the risk of paying those types of damages. Both the federal and state superfund laws contain provisions allowing recovery for that type of damage, see 42 U.S.C. § 9607(a)(4)(C) and Minn.Stat. § 115B.17, subd. 7 (1988), and both differentiate between such type of damage and remediation cleanup costs. Compare, e.g., U.S.C. § 9606(a) and Minn.Stat. § 115B.17, subd. 6 (1988). But in these cases none of the plaintiffs are seeking indemnity or coverage for such type of damages. Rather *186they seek response or remediation cleanup costs which have “no upper limit of liability.” Brett, Insuring Against the Innovative Liabilities and Remedies Created by Superfund, 6 U.C.L.A. J. Envtl. L. & Pol’y 1, 53 (1986). As Professor Kenneth S. Abraham, wrote:
[T]o impose liability for cleanup expenses under policies issued before the enactment of the statutes that created such liability is to ignore the calculations that entered into the pricing of those policies, and thereby to ignore the underlying purpose of the provisions whose meaning is at issue. The result is twofold: a windfall for insureds, who receive benefits for which they never paid, and still another set of uncertainties regarding the magnitude of the liability an insurer providing environmental liability coverage may face.
Abraham, Environmental Liability and the Limits of Insurance, 88 Col.L.Rev. 942, 970 (1988).
Finally, I submit, the majority holding contravenes the public policy of the state to hold responsible polluters to the obligation to clean up the environmental damages they have caused by their activities, “ * * * it is contrary to public policy to allow a responsible party to pass on the cost of clean up * * * to its insurance carrier, and thereby retain the benefit of having another perform its public duty without having paid for it.” Brett, Insuring Against the Innovative Remedies Created by Superfund, 6 U.C.L.A. J. Envtl. L. & Pol’y 1, 52 (1986). As between the corporate polluters and their stockholders, and the policyholders of comprehensive general insurance policies, it seems to me the public policy of this state should place the onus of remediation upon the corporate polluters who have not paid for indemnification, rather than upon insurers who have not received a premium to cover its cost.
For these reasons, I would answer each of the certified questions in the negative.

. As the majority opinion points out, our state statute is patterned after, and, insofar as this issue is concerned, is substantially identical to the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA”) 42 U.S.C. §§ 9601-9615. In addition to the holding by the Eighth Circuit in NEPACCO, the Fourth Circuit in Cincinnati Ins. Co. v. Milliken & Co., 857 F.2d 979 (4th Cir.1988); Maryland Casualty Co. v. Armco, Inc., 822 F.2d 1348 (4th Cir.1987), cert. denied, 484 U.S. 1008, 108 S.Ct. 703, 98 L.Ed.2d 654 (1988); *185Mraz v. Canadian Universal Ins. Co., 804 F.2d 1325 (4th Cir.1986); and the Fifth Circuit in Aetna Casualty & Surety Ins. Co. v. Hanna, 224 F.2d 499 (5th Cir.1955), many state courts have likewise addressed the issue. Although I am not certain that my research has included all of the state cases, my census reveals that slightly more than half of the state courts have likewise concluded “response costs" are not "damages” within the meaning of the cited clause in comprehensive general liability insurance policies.