Septage Injections, Etc., Into the Ground Can Be Contamination or
Pollutant
You may have thought that disputes over pollution exclusions in first-party policies and Commercial General Policies (or their near equivalents) were over. But, No.
The recent case of Preisler v. General Causality Insurance Company [plus a bunch more insurance companies], 857 N.W. 136 (Wis., December 30, 214) proves the opposite. The whole story is not worth telling here, nor are some of the arguments of the Wisconsin Supreme Court, so I will cut to
the last lap of the chase.
the last lap of the chase.
Preislers, dairy farmers, had across-the-street neighbors—real human person and their corporations—who/which not only farmed but owned and ran a septic company that hauled, stored, and disposed of the waste it pumped from grease traps, floor pits, and car washes, which it combined with the human waste from septic tanks. (They hired someone else to dispose of the septage. Not even they wanted to do this so they hired a willing plumber.) As the court put it, in case you claim not to know and not able to figure it out, “Septage is primarily composed of human urine and fecal material, as well as. . . .”
Eventually, the Preislers complained to their neighbors that the septage their neighbors injected into the ground at least near them was adversely affecting—e.g., reducing production of–dairy production, the health of the cattle, and sometimes terminating their lives. (In other words, as a teenage boy might put it, “The shit was killing the cows.”)
There were complaints; various agricultural experiments were tried; nothing seemed to work; this all lead to a Complaint; a tort and quasi-tort suit was on; the insurers were notified, coverage was denied on a variety of grounds, the Preislers added the insurers into their suit against their neighbors, and the insurers probably filed a declaratory judgment pleading. As would have been predicted, the insurers won.
Most important here is that one of the reasons coverage was denied was that the deposits were contaminates and therefore pollution, given the definition of “pollution” and past court decision on the general topic.
As is usual in the last near half century, or so, business insurance policies usually contain pollution exclusions. (One wonders whether the neighbors of the Preislers asked about it.
If they didn’t ask about it or if they did and were informed about it, but decided not to buy it, though they could afford it, what word beginning with the letter “I” comes to mind?)
If they didn’t ask about it or if they did and were informed about it, but decided not to buy it, though they could afford it, what word beginning with the letter “I” comes to mind?)
(Of course, there is such a thing as coverage for pollution, rare though its use is—even as an endorsement on some other type of policy. Still, it is actually available for first-party property policies, and it is available in some liability policies, e.g., those for some companies in the business of dealing with pollution problems. This would include not only the insureds here but some engineering and design companies. Interestingly, the insureds in this case did not appear to have sought that coverage. As one might expect, it is extremely expensive. Nevertheless, this observation proves the point that almost every type of insurance is available for anything that is fortuitous. Naturally, bodily injuries, sickness and human death resulting from pollution are not normally excluded for health insurance policies or from life insurance.)
The District Court and the Court of Appeals granted the insurers summary judgment as to coverage based on the pollution exclusions in the various policies. It seems that the substance complained about while confined to the soil generates nitrates into the ground water, and other water there, as well as the surface to some extent, and those are health-harmful, perhaps even to cattle.
The Supreme Court affirmed the two lower courts. Its review of case and the twists and turns
regarding the meaning and use of the term “pollution” is to be admired, as is the dissent of the Chief Justice, the brilliant and famous, Shirley S. Abrahamson.
regarding the meaning and use of the term “pollution” is to be admired, as is the dissent of the Chief Justice, the brilliant and famous, Shirley S. Abrahamson.
(One of the majority’s most interesting point is that under Wisconsin law if a perfectly normal activity unexpectedly, but rarely, produces something which might be a pollution under more regular circumstances, perhaps should not be counted as a pollutant in those rare circumstances. Obviously, this “rule”—or whatever it is–does not usually apply to lead paint that gets off the painted-on surface. Interestingly, this is one of the continuing sources of pollution related insurance disputes.)
In any case, the Supreme Court ruled that what had happened to the was the sort of thing that is encompassed by relevant insuring agreements but also falls under pollution exclusions.* It cited many Wisconsin opinions on these general subjects in its well reasoned, logical opinion, so this case will be a law school teaching case. (After all, decisions of the Wisconsin Supreme Court are often regarded as among the most important because of their depth.)
*As a general rule, insurers have insuring agreements—“You are covered, except when”—and exclusions—“This is a “when. . . .” Some say there may be “secret” exclusions hidden elsewhere in the policy, e.g., in an insuring agreement or in a definition, but courts seldom adopt this view..
In conclusion, it is worth noting that one of the most important cases upon the relatively large number upon which the majority relied is a relatively recent one, Hirschhorn v. Auto-Owners Ins. Co., 809 N.W.2d 529 (Wis. 2012)(property damage caused by bat guano). Many legal arguments depend basically on analogies.
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