Court Opinion

ID: 9577054
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:31:14.573794+00
Date Added: 2024-06-11T13:19:52.711071
License: Public Domain

MEEHL, Justice Pro Tem,
concurring and dissenting.
I concur in the majority’s cutting to the chase by treating this appeal as one by permission. I also would affirm the trial court’s denial of summary judgment, although on a different basis than that of the trial court. I would find, however, that the CERCLA liability was covered by the policy.
I would first find that while costs incurred in response to equitable remedies, including environmental response costs under CERC-LA do constitute “damages because of property damage” (thus creating coverage under the policy), they do not amount themselves to “property damage” as contemplated by the exclusion involved. Thus, we do not even need to decide whether the “sudden and accidental” exception to the exclusion applies. The exclusion as a whole does not apply.

DISCUSSION

While this court is obviously not bound by the Federal District Court decision in Quaker State Minit-Lube, Inc. v. Fireman’s Fund Ins. Co., 868 F.Supp. 1278 (D.Utah 1994), aff'd. 52 F.3d 1522 (10th Cir.1995), the case provides much guidance because the same Ekotek sight in Utah was involved; the research is so thorough; and the reasoning, as far as it goes, was on solid ground. That case discusses the issue of response and remediation costs under CERCLA and whether they are proper “damages because of property damage.” 868 F.Supp. at 1288-1294. In Quaker State, the defendant insurers relied on authorities construing “damages” as distinguishing legal claims for monetary damages from costs incurred in response to equitable remedies, including environmental response costs under CERCLA. Id. at 1289. They went on to contend that “black letter insurance law holds that claims for equitable relief are not claims for damages under liability insurance contracts;” that generally under Utah law the measure of damages for tortious injury to real property is the difference between the value of the property immediately before the damage and immediately after the injury; and that costs of restoration may not be used as a measure of damage if such *255costs exceed the loss of value sustained by the injured party. Id. at 1290. These arguments of the insurers were rejected by the court which defined the word “damages” as its “plain, non-technical meaning”, which encompassed response costs imposed to remediate environmental damage. The court also said: “To the extent the policies’ reference to “damages” is ambiguous, the ambiguity must be resolved in favor of coverage.” Id. at 1293. This is horn book insurance law. In accord see Aetna Casualty and Surety Co., Inc. v. Pintlar Corp., 948 F.2d 1507 (9th Cir.1991) applying Idaho law.
Moving on to exclusion, that section of the policy does not refer to “damages because of property damage”, it simply excludes “property damage arising out of’ [pollution]. Unlike the coverage language, this exclusion is ambiguous and must be construed strictly against the insurer. There is no “plain nontechnical meaning” for “property damage” that includes costs incurred in response to equitable remedies, including environmental response costs under CERCLA. Since CERCLA was not yet in existence when the policy was created, I would limit the property damage exclusion to a legal claim for damages which for Utah property would mean the loss in property value suffered by the landowner.1
It must be pointed out that even if excessive restorative costs were to be considered “property damage”, the CERCLA responsive costs herein would not be limited to restorative costs. The actual CERCLA costs at the Ekotek site also include purely preventative activities, e.g., removal of tanks, drums and containers of hazardous waste which has not yet been released or discharged onto the land or into water. The record does not show that the CERCLA costs herein have been apportioned into separate restorative and preventative components.
Based on the reasoning above, I would find that the term “property damage” is ambiguous and that the ambiguity must be resolved to favor the insured. Therefore, “property damage” does not include the CERCLA response costs; and the exclusionary clause in question cannot be applied to deny coverage.
As to the extent of coverage herein: (1) I would adept the “injury in fact” trigger to define occurrence [see Quaker State, supra, discussion 868 F.Supp. at 1298-1304]; therefore there was an “occurrence” each year that respondent was covered; (2) Under CERCLA, even where its individual role in creating the hazardous site was small, a responsible party may be held jointly and severally liable for the entire cost of response and clean-up at a site if the harm or damage at the site is “indivisible”; therefore (3) liability created by an occurrence created during the policy period becomes oceanic and the entire amount assessed against the respondent is covered under the policy.
Since I would find coverage, I would also find there was a clear duty to defend.

. While "property damage” is defined in the policy, the definition itself is inadequate to resolve the above ambiguity.