Court Opinion

ID: 4711024
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:36:18.259748+00
Date Added: 2024-06-11T08:07:06.417052
License: Public Domain

Guy, J.
(concurring) — The comprehensive general liability insurance policies at issue insure against the risk of liability incurred by the policy-holder. However, because of the "owned property” exclusions, the insurance contracts do not apply to pay for damage to the policyholder’s own property. Such simple propositions become quite complex in the context of pollution liability claims. If an insured has to clean up its own land, then there may be liability under the model toxic control act (MTCA), RCW 70.105, but there is no coverage if the only damage is to the property of the insured because of the "owned property” exclusion. Conversely, if there was damage to the property of another (i.e., groundwater), but that damage was not severe enough to trigger liability, then there is no coverage because there is no "legal obligation” on the part of the policyholder to clean up such damage. In order for there to be insurance coverage, there must have been both (1) damage to the property of another,23 and (2) that damage must have been the event which imposed liability on the policyholder.
*483The specific question here was whether Olds-Olympic was liable under the MTCA for remediation of the groundwater. If it was liable, then to the extent that the cleanup costs were incurred for that remediation, there would be coverage under the liability insurance policies.
The questions which were necessary to be answered in this case (after the questions of occurrences and policy dates were established) were:
(1) Was there damage to the property of another? The jury found that there was damage to groundwater. Hence, on remand, the parties need not ask this question again. As the majority correctly holds, in Washington, as a matter of law, groundwater is the property of another.
(2) Was the damage to the groundwater severe enough to impose a legal obligation on Olds-Olympic to remediate that damage under the MTCA? This question remains to be answered. Although this is a very close issue, I concur with the majority’s decision that the interrogatory24 posed on this issue was unclear. The primary problem with the interrogatory is that it did not ask whether Olds-Olympic had a legal obligation to remediate the damage to the groundwater and it did not clearly tie that obligation to the requirements of the applicable statute. On remand, the jury will need to know what level of pollution of groundwater would mandate cleanup under the MTCA and what level of pollution to the groundwater actually occurred on this property.
If the jury determines that the damage to the groundwater was severe enough to impose a legal obligation on OldsOlympic to clean up the damage, then the question will become to what extent the cleanup efforts were directed toward remediation of the groundwater and to what extent the remediation efforts were only to clean up OldsOlympic’s own soil. I believe the most significant law made by the majority opinion is found in footnote 20. The ma*484jority states that "[u]nder any CGL policy, only those portions of cleanup costs necessary to prevent further degradation of property belonging to another will be covered, given the owned property exclusion. Any portion of the cleanup affecting only the insured’s property would still be subject to such an exclusion.” Majority at 480 n.20. I agree. This proposition is supported by recent case law and scholarly comment and may be a significant factual issue in the present case. The Ninth Circuit has explained that the trier of fact must determine what expenses were incurred to remedy existing damage to third-party property or to prevent further damage to that property from contaminants introduced by the policyholder, and what expenses were incurred only to remedy damage to property which the policyholder controlled. The former expenses are covered by the CGL policy while the "owned property” exclusion bars coverage for the latter. Intel Corp. v. Hartford Accident & Indem. Co., 952 F.2d 1551, 1566 (9th Cir. 1991).
Although this apportionment rule is easy to articulate in the abstract, the proof necessary to segregate such liability between the insurer and the policyholder may be quite complex. How to allocate or apportion damages for cleanup expenses when remediation has occurred both to remediate damage to the property of another (the groundwater) and to remediate soil on the policyholder’s own property is a widely discussed issue with important ramifications. See, e.g.,Too I. Zuckerman & Mark C. Raskoff, Environmental Insurance Litigation § 7.05, at 7-7 to -8 (1994); Kenneth S. Abraham, Environmental Liability Insurance Law 169-72 (1991); Mitchell L. Lathrop, Insurance Coverage for Environmental Claims § 3.08[1], at 3-106 to -113 (1992); Kirby Griffis, Note, Apportionment of Environmental Cleanup Costs under the Owned-Property Exclusion in CGL Insurance Policies, 80 Va. L. Rev. 1351 (1994); Eugene I. Annis, The Owned Property and Care Custody and Control Exclusions of the Comprehensive General Liability Policy, 28 Gonz. L. Rev. 439 (1993); 7A John A. Appleman, Insurance Law *485and Practice § 4526 (Supp. 1994); Products, General Liability, and Consumer Law Committee, American Bar Association, Reference Handbook on the Comprehensive General Liability Policy: Coverage Provisions, Exclusions, and Other Litigation Issues 130-31 (Peter J. Neeson ed., 1995). If the trier of fact determines that Olds-Olympic was liable for remediation of groundwater, then on remand the trier of fact will also need to apportion the costs of the cleanup expenses between these two relevant categories.
Reconsideration denied October 3, 1996.

An immediate threat of damage to the property of another may suffice to trigger coverage, but that issue is not before the court in this case. There is a split of authority on this issue. See Eugene I. Annis, The Owned Property and Care Custody and Control Exclusions of the Comprehensive General Liability Policy, 28 Gonz. L. Rev. 439 (1993).

The interrogatory to the jury asked, "Was there a legal obligation or liability because of property damage to groundwater for any year?” Clerk’s Papers at 828.