Court Opinion

ID: 9584256
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:46:04.26558+00
Date Added: 2024-06-11T15:07:17.675335
License: Public Domain

Jansen, J.
(concurring in part and dissenting in part). I concur with all but part vn(c) of the majority opinion, which concerns other possible sources of contamination. I believe that the trial court correctly found that there is a material factual dispute regarding other possible sources of contamination at sites 9 and 9A and sites 7 and 11 such that it is not possible at this juncture to determine if the sudden and accidental exception to the pollution exclusion clause applies.
Our Supreme Court’s decisions in Polkow v Citizens Ins Co of America, 438 Mich 174; 476 NW2d 382 (1991), and American Bumper & Mfg Co v Hartford Fire Ins Co, 452 Mich 440; 550 NW2d 475 (1996), are instructive on this issue. In Polkow, the plaintiff brought an action against the insurer to defend and indemnify regarding the contamination of groundwater. There was evidence in that case that contaminants found in the groundwater were not from the plaintiff’s oil leaks and may have been unrelated to the plaintiff’s operation. One expert suggested that the groundwater contamination may have been caused by a nearby electrical substation located *698upgrade . of the affected water wells. See Polkow, supra, p 179.
Finding that resolution of whether the sudden and accidental exception to the pollution exclusion applies requires an examination of whether the discharge was sudden and accidental, our Supreme Court held that summary disposition was not appropriate because it was unclear what the discharge was and where the release of the pollution occurred. Id., pp 179-180. The decision in Polkow makes clear that the insurer remains under a duty to defend until it can confine the claim to a recovery that the policy does not cover. Id., p 179. Specifically, the Supreme Court noted:
Fairness requires that there be a duty to defend at least until there is sufficient factual development to determine what caused the pollution so that a determination can be made regarding whether the discharge was sudden and accidental. Until that time, the allegations must be seen as “arguably” within the comprehensive liability policy, resulting in a duty to defend.
. . . But without proof of the source of the discharge, the court cannot determine whether the discharge falls within the pollution-exclusion clause or whether the unknown discharge falls within the sudden and accidental exception to the exclusion clause. This uncertainty creates doubt regarding coverage. Summary disposition was inappropriate. [Id., pp 180-181.]
Likewise, in American Bumper, the plaintiff discharged wastewater into a seepage lagoon. Although there were concerns that the wastewater may have been contaminating nearby groundwater, it was ultimately determined that there was no contamination. One of the issues confronting the Supreme Court was whether there was a duty to defend under the insur*699anee policy. The Supreme Court noted that the duty to defend is broader than the duty to indemnify. Id., p 450. If the allegations of a third party against the policyholder even arguably come within the policy coverage, the insurer must provide a defense. This is so even where the claim may be groundless or frivolous. Id., p 451.
In American Bumper, the evidence was that the cause and source of the possible contamination was uncertain. The investigation found pollutants that were not used in or produced by the plaintiff’s business operations. The Supreme Court held that because uncertainty existed regarding whether there was contamination requiring cleanup and what the cause and source of possible contamination was, the insurers could not escape their duty to defend on grounds of their pollution exclusion clauses. Id., pp 454-455.
In the present case, the trial court found that the findings of a September 6, 1994, hydrogeologic investigation performed by the Dragun Corporation raised a question of fact regarding the sources of contamination at sites 9 and 9A. Initially, at chapter two of the report, the following is stated:
Table 2-6 indicates that some of the monitoring wells contain metals concentrations that exceed Type B criteria. The groundwater from these monitoring wells commonly contain arsenic, antimony, and manganese concentrations that exceed Type B criteria. Table 2-6 also indicates that many of the off-site wells have higher concentrations of these metals than the leachate samples, and that upgradient wells also have concentrations that exceed Type B criteria. These latter findings suggest that the landfills are not the only source of high concentrations of arsenic and antimony in groundwater. [Emphasis added.]
*700In chapter five, the report specifies other possible sources of contamination. Those sources include: the Macomb Township rubbish disposal area located approximately one-half mile southeast of the site, agricultural chemicals, chemicals used for golf course maintenance, and a storage yard containing automobile parts, abandoned vehicles, and other metal debris. The report indicates that it is not known whether soil or groundwater had been adversely affected by the Macomb Township rubbish disposal area. However, review of eight photographs of the rubbish disposal area revealed household rubbish piled adjacent to and sometimes in a pond located on the area property. Further, the report indicates that low levels of tetrachloroethylene (pce) were detected in the Foss Road Residential Well, but that the source of the pce was unknown. Low levels of benzene were detected in water samples at residential property on Card Road, and the source of the benzene was unknown. Additionally, it was unknown whether the use of agricultural chemicals and golf course maintenance chemicals affected the area property. The report states also that it was possible that storage of the automobile parts, abandoned vehicles, and other metal debris may have adversely affected soil or groundwater at residential properties located north of sites 9 and 9A.
While the hydrogeologic report is not definitive with respect to other possible sources of contamination, neither were there any definitive findings in Polkow or American Bumper. In this case, other possible sources of contamination have been identified in the hydrogeologic report. Because other possible sources of contamination have not been definitively *701identified, I would find that the defendant insurers are under a duty to defend until the claims against South Macomb Disposal Authority are confined to theories outside the scope of coverage under the policies. American Bumper, supra, p 455. Uncertainty regarding whether an allegation comes within the scope of the policy must be resolved in the policyholder’s favor. Id.
In this case, I cannot conclude that the trial court’s finding that plaintiff’s evidence raised a question of fact regarding the source of the contamination around sites 9 and 9A is clearly erroneous. The hydrogeologic report supports the trial court’s findings in this regard. Pursuant to the Supreme Court’s decisions in Polkow and American Bumper, because there are other possible sources of contamination, summary disposition is not appropriate. Therefore, I would affirm the trial court’s ruling that plaintiff’s evidence raised a question of fact regarding other possible sources of contamination at sites 9 and 9A. The insurers are under a duty to defend until there is a sufficient factual determination regarding the source of the contamination. Without definitive proof of the source of the contamination, it cannot be determined whether the discharge falls within the pollution exclusion clause or whether the discharge falls within the sudden and accidental exception to the exclusion clause. Summary disposition in favor of the insurers is not appropriate at this point regarding sites 9 and 9A.
With respect to sites 7 and 11, the trial court found that “the facts establish that there are several other possible sources of contamination near to these sites.” The trial court concluded that a hydrogeologi*702cal investigation was necessary to determine the source of the contamination. The trial court ruled that because there were issues of fact regarding the source of the alleged groundwater contamination, summary disposition in favor of the insurers was precluded.
I would find that the trial court did not err in denying summary disposition with respect to sites 7 and 11 as well. Under Polkow, defendants had not been able to confine the claims against plaintiff to matters not covered or specifically excluded under the insurance policies. The trial court’s ruling that there were issues of fact regarding possible other sources of contamination is not in error. Without definitive proof of the source of the contamination, it cannot be determined whether the discharge falls within the pollution exclusion clause or whether the discharge falls within the sudden and accidental exception to the exclusion clause. Summary disposition in favor of the insurers is not appropriate at this point with regard to sites 7 and 11.
I would affirm the decision of the trial court and remand for further proceedings.