Opinion
No. 36961-3-II.
March 17, 2009.
Appeal from a judgment of the Superior Court for Pierce County, No. 06-2-08353-4, Bryan E. Chushcoff, J., entered November 5, 2007.
Affirmed by unpublished opinion per Penoyar, A.C.J., concurred in by Bridgewater and Armstrong, JJ.
UNPUBLISHED OPINION
In 2006, Metropolitan Property and Casualty Insurance Company (Metropolitan) filed a declaratory judgment action against William and Karyl Martin and the Estate of H.E. Sherry Johnson (Estate), seeking a declaration of no coverage for the Martins' claims against the Estate for $81,928.63. Both parties moved for summary judgment and the trial court ruled in Metropolitan's favor. The Martins and the Estate now appeal, arguing that because the homeowners' insurance policy Johnson had from 1992 through 1996 provides coverage in this case, the trial court erred by granting Metropolitan's motion for summary judgment. The appellants' arguments are unpersuasive, however, and we affirm.
FACTS
This appeal arises out of a previous suit the Martins brought against the Estate for damages resulting from a leaking underground oil tank at a house the Martins purchased from Johnson. See Martin v. Johnson and Metropolitan Property Casualty Ins. Co., 141 Wn. App. 611, 170 P.3d 1198 (2007). The following facts have been taken from that case:
In 1996, the Martins purchased a house from Johnson, now deceased. Johnson had owned the house, which was built in 1910, since the 1950s. In the 1970s, Johnson converted the house from oil to electric heat but did not remove or otherwise properly decommission the underground tank. The underground tank began leaking oil before 1994. Martin, 141 Wn. App. at 615. In a real property transfer disclosure statement, Johnson checked the box "don't know" in response to questions about the presence of underground storage tanks. The Martins' inspector did not discover the tank because landscaping covered its filler inlet. Martin, 141 Wn. App. at 615.
Subsequent lab results revealed that the soil contained diesel and other hydrocarbon, which the tank released before 1994.
In 2004, the Martins put the house up for sale. The eventual buyer, while researching the house's history, discovered that there was possibly an oil tank on the property. A contractor found the tank, and the buyer required its removal before purchasing the house. The Martins spent $61,415.63 to remove the tank and to clean the contaminated soil and groundwater surrounding it. Martin, 141 Wn. App. at 615.
The appellants contend that under RCW 90.44.040, groundwater is State property. As a general matter, groundwater in Washington is publicly owned. RCW 90.44.040 provides that subject to existing rights, all natural ground waters of the state are public ground waters, belong to the public, and are subject to appropriation for beneficial use under the terms of that chapter. Hillis v. Dep't. of Ecology, 131 Wn.2d 373, 383, 932 P.2d 139 (1997). The parties seem to agree that the oil contacted groundwater at some unknown time but that neither the oil nor the groundwater ever left Johnson's property. Metropolitan notes, however, that "[t]here never was and never would be any claim for damage to the ground water," only for the costs of removing the tank and surrounding soil plus attorney fees. Resp't's Br. at 17-18.
Johnson sought coverage for the Martins' claims against her from Metropolitan, which provided her homeowners' insurance during the time she lived at the house. Metropolitan denied coverage for the cost of cleaning up the contamination and any potential damages from exposure to toxic substances; Metropolitan agreed, however, to defend the Estate, reserving its rights to contest coverage. The Martins filed a suit against her Estate's personal representative, alleging that Johnson was liable for the costs of clean-up under the Model Toxics Control Act (MTCA) and that she negligently failed to properly decommission the tank or warn the Martins of its existence. Martin, 141 Wn. App. at 616.
Metropolitan continuously insured Johnson from February 1, 1992 through June 19, 1996. Johnson paid an additional premium and received optional coverage, including personal injury coverage, during this time.
Johnson died after the discovery of the tank but before the Martins filed their lawsuit. Martin, 141 Wn. App. at 616, fn 1.
The Martins and the Estate settled. The Estate agreed to a stipulated judgment of $81,928.63 against it and assigned its claims against Metropolitan to the Martins, in exchange for a promise not to execute the judgment against the Estate. The Martins also agreed to waive their claims for general damages and litigation costs. The $81,928.63 represented the Martins' cleanup costs and attorney fees. The settlement was contingent on the trial court approving it as reasonable. The Estate moved for an order finding the settlement reasonable; the Martins joined the motion. Metropolitan intervened and opposed the motion. The trial court ruled that the settlement was reasonable. Metropolitan appealed to this court and we affirmed the trial court's ruling. Martin, 141 Wn. App. at 616.
Shortly after the parties' settlement agreement, Metropolitan filed a declaratory judgment action against the Martins and the Estate, seeking a declaration of no coverage for the Martins' claims against the Estate. Martin, 141 Wn. App. at 616. The Estate counterclaimed for breach of contract and also asserted claims for bad faith and violations of the Consumer Protection Act. Metropolitan moved for summary judgment on coverage. The Martins and Estate moved for partial summary judgment, claiming that there was coverage and that Metropolitan was bound to pay the reasonable settlement.
The trial court granted Metropolitan's motion. In its ruling, it stated:
It is sufficient for this purpose to note only that the oil leak did not escape the Johnson property. Because of this, the personal injury insurance coverage for "wrongful entry" does not apply to cover Ms. Johnson for this claim.
Clerk's Papers (CP) at 615. The trial court concluded that although groundwater may be property, it is not an "interest in the possession or use of land or premises of the State." CP at 616. Subsequently, it dismissed the counterclaims without prejudice. The Martins and the Estate now appeal.
ANALYSIS
I. Standard of Review
On review of an order for summary judgment, we perform the same inquiry as the trial court. Hisle v. Todd Pac. Shipyards Corp., 151 Wn.2d 853, 860, 93 P.3d 108 (2004) (citing Kruse v. Hemp, 121 Wn.2d 715, 722, 853 P.2d 1373 (1993)). Summary judgment is appropriate only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." CR 56(c). We consider all facts in the light most favorable to the nonmoving party. Vallandigham v. Clover Park Sch. Dist. No. 400, 154 Wn.2d 16, 26, 109 P.3d 805 (2005) (citing Atherton Condo. Apartment-Owners Ass'n Bd. of Dirs. v. Blume Dev. Co., 115 Wn.2d 506, 516, 799 P.2d 250 (1990)). We review questions of law de novo. Mountain Park Homeowners Ass'n, Inc. v. Tydings, 125 Wn.2d 337, 341, 883 P.2d 1383 (1994). We grant summary judgment only if reasonable persons could reach but one conclusion from all the evidence. Vallandigham, 154 Wn.2d at 26 (citing Wilson v. Steinbach, 98 Wn.2d 434, 437, 656 P.2d 1030 (1982)).
Where, as here, no facts are in dispute, we review summary judgments regarding insurance coverage de novo. Cle Elum Bowl, Inc. v. N. Pac. Ins. Co., Inc., 96 Wn. App. 698, 702, 981 P.2d 872 (1999) (citing Hillhaven Props. Ltd. v. Sellen Constr. Co., 133 Wn.2d 751, 757, 948 P.2d 796 (1997)). The interpretation of an insurance contract is a question of law. We construe the policy as a whole, giving it a fair and sensible construction that the average person would understand. Cle Elum Bowl, Inc., 96 Wn. App. at 702 (citing Kitsap County v. Allstate Ins. Co., 136 Wn.2d 567, 575, 964 P.2d 1173 (1998)). At the same time, we do not allow an insured's expectations to override the contract's plain language. Cle Elum Bowl, Inc., 96 Wn. App. at 702-03 (citing Cook v. Evanson, 83 Wn. App. 149, 155, 920 P.2d 1123 (1996)).
II. Insurance Policy
In this case, the parties' arguments focus on various provisions included in Johnson's insurance policy. It provides, in part:
SECTION II — LOSSES WE COVER
COVERAGE F — PERSONAL LIABILITY
We will pay all sums for bodily injury and property damage to others for which the law holds you responsible because of an occurrence. This includes prejudgment interest awarded against you.
We will defend you, at our own expense with counsel of our choice, against any suit or claim seeking these damages. We may investigate, negotiate, or settle any suit or claim. . . . .
SECTION II — LOSSES WE DO NOT COVER
UNDER COVERAGE F-PERSONAL LIABILITY AND COVERAGE G-MEDICAL PAYMENTS TO OTHERS, WE DO NOT COVER:
. . . .
11. bodily injury or property damage resulting from the release of toxic chemicals and other pollutants or contaminants. This exclusion does not apply to pollution caused directly by a hostile fire.
12. statutorily imposed liability resulting from the release of toxic chemicals and other pollutants or contaminants. This exclusion does not apply to pollution caused directly by a hostile fire.
CP at 62-64 (bolded type omitted).
The policy defines the term "occurrence" as an "accident, including continuous or repeated exposure to substantially the same general harmful conditions, resulting in bodily injury or property damage during the term of the policy." CP at 48 (bolded type omitted). The policy excludes from coverage:
2. Property damage to property owned by you.
3. Property damage to property occupied or used by you, rented to you, in your care or over which you have physical control. Coverage is provided for property damage caused by fire, explosion or smoke.
CP at 64 (bolded type omitted).
Additionally, the policy provides:
SECTION II — OPTIONAL COVERAGES
The following coverages are afforded only if indicated in the Declarations. They are subject to all of the provisions applicable to Section II, except as modified herein.
. . . .
COVERAGE 25 — PERSONAL INJURY
The insurance provided in Coverage F — Personal Liability is extended to include protection for personal injury.
"Personal injury" is defined as injury arising out of one or more of the following:
1. false arrest, false imprisonment, wrongful detention or malicious prosecution;
2. wrongful eviction or wrongful entry;
3. libel, slander, defamation of character or invasion of privacy.
The Section II — Losses We Do Not Cover do not apply to personal injury.
Under personal injury we do not cover:
1. liability assumed by you under any contract or agreement except any indemnity obligation assumed by you under a written agreement directly relating to the ownership, maintenance or use of the insured premises;
2. injury caused by a violation of a penal law or ordinance committed by you or with your knowledge or consent;
. . . .
GENERAL CONDITIONS — SECTIONS I AND II
1. Policy Period. This policy applies only to accidental loss in Section I or bodily injury or property damage in Section II, which occurs during the policy period.
. . . .
9. Assignment. You may not assign this policy to another person without our written consent.
CP at 66-69 (bolded type omitted) (emphases added).
The appellants point to the provision excluding coverage of liability assumed by the insurer under any contract or agreement except any indemnity obligation assumed by the insured under a written agreement directly relating to the ownership, maintenance, or use of the insured premises, arguing that the parties' settlement in this case is not excluded under this language. Case law from other jurisdictions suggests that the appellants may be correct, and Metropolitan does not appear to disagree on appeal.
The appellants argue their claim under "Coverage F — Personal Liability" and "Coverage 25 — Personal Injury." More specifically, they argue that the policy's provision excluding coverage of bodily injury, property damage, and statutorily imposed liability resulting from the release of toxic chemicals and other pollutants or contaminants does not apply in this case. Rather, they contend, the personal injury provision extending coverage to injuries arising from "wrongful entry," which is exempt from this exclusion, dictates that Metropolitan pay their reasonable settlement. Appellant's Br. at 11. We disagree.
III. Coverage Under Johnson's Policy
A. Personal Liability Coverage
Johnson's policy provides that Metropolitan will pay all sums for "bodily injury and property damage to others for which the law holds [the policyholder] responsible because of an occurrence. CP at 62 (emphasis added). As previously noted, the policy defines an occurrence as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions, resulting in bodily injury or property damage during the term of the policy." CP at 48 (bold type omitted) (emphasis added). In this case, it is clear that no one claimed that bodily injuries occurred as a result of the oil leak. Even if the appellants' claim, that groundwater contamination constitutes "property damage to others," is correct, the evidence does not establish whether the leakage or contamination of groundwater occurred during Johnson's 4-year policy period. Viewed in the light most favorable to the appellants, the evidence at most could establish only that leakage began before 1994.
The policy defines the term "property damage" as "physical damage to or destruction of tangible property, including loss of use of this property." CP at 48.
As previously noted, the policy excludes from coverage property damage to property owned by the insured.
Furthermore, the policy specifically excludes coverage for property damage or statutorily imposed liability resulting from the release of toxic chemicals or other pollutants or contaminants. Whether classified as "property damage" or "statutory liability," the "losses" incurred in this case resulted from the release of contaminants/pollutants into Johnson's property and underlying groundwater. In sum, the policy's personal liability coverage does not apply to the Martins' claims against the Estate. Coverage is only available, then, if the policy's personal injury provision applies in this case.
B. Personal Injury Coverage
The appellants ask us to find coverage under the policy's extended personal injury provision, which is not subject to the aforementioned pollution exclusions or occurrence provision. An examination of Johnson's policy as a whole, however, does not support this conclusion, even if we agreed with the underlying premise that personal liability coverage and personal injury coverage are separate and distinct coverages.
The appellants appear to correctly assert that the provision limiting coverage to accidental loss, bodily injury, and property damage which occurs during the policy period does not apply to the personal injury provision. The appellants contend that this provision "is ambiguous at best" and can be read to either (1) "indirectly import an Occurrence coverage requirement for 'property damage' (physical injury to tangible property) into the Personal Injury coverage" or (2) "to say that if the claim is based on the Occurrence coverage for 'property damage,' then that 'property damage' must take place during the policy period." Appellants' Reply Br. at 9 (emphasis in original). They argue that "[t]he reasonable reader can avoid these conundrums by reading the 'policy period' provision as only applying to the Occurrence coverage, which expressly requires the presence of 'property damage;'" however, "because the Personal Injury coverage is a separate coverage, which does not require 'property damage,' the 'policy period' condition does not apply." Appellants' Reply Br. at 10. This, however, does not change the following analysis.
We interpret an insurance contract in light of actual language used and with respect to the policy as a whole, not in terms of isolated segments. Overton v. Consol. Ins. Co., 145 Wn.2d 417, 424, 38 P.3d 322 (2002). When analyzing an insurance policy and determining whether any ambiguity exists, we do not engage in a strained or forced construction that would lead to absurd results or interpret policy language in a way that extends or restricts the policy beyond its fair meaning or renders it nonsensical or ineffective. Christal v. Farmers Ins. Co., 133 Wn. App. 186, 191, 135 P.3d 479 (2006).
Here, Johnson's oil tank leaked into the ground on Johnson's property and came into contact with groundwater on the property at some point. Using the plain, ordinary and popular meaning of the phrases, this occurrence was neither a wrongful entry nor did it result in personal injury. The trial court recognized this:
Furthermore, the nature of the alleged injury in this case was not "personal." At oral argument, the appellants argued that the State is a person and that, because the oil came into contact with State-owned groundwater, the case involved "personal injury." We disagree.
It is sufficient for this purpose to note only that the oil leak did not escape the Johnson property. Because of this, the personal injury insurance coverage for "wrongful entry" does not apply to cover Ms. Johnson for this claim.
CP at 615.
To interpret Johnson's policy to provide coverage for "personal liability" or "personal injury" under the facts in this case would extend the policy far beyond its fair meaning. We affirm the trial court's action in granting Metropolitan summary judgment in this case.
The appellants request attorney fees under RAP 18.1(b) and Olympic Steamship Co. v. Centennial Ins. Co., 117 Wn.2d 37, 811 P.2d 673 (1991). Because we affirm the trial court's ruling, we also deny the appellants' request.
Under Olympic Steamship, an insured that prevails on a question of coverage is entitled to attorney fees. 117 Wn.2d at 53.
Affirmed.
A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed for public record pursuant to RCW 2.06.040, it is so ordered.
BRIDGEWATER, J. and ARMSTRONG, J., concur.