The owned property exclusion clearly does not exclude costs incurred to remedy the groundwater contamination by cleaning the insured's property. Northern States Power Co. v. St. Paul Fire Marine Ins. Co., 504 N.W.2d 240, 246 (Minn.App. 1993), pet. for rev. granted to consider different issue (Minn. Nov. 16, 1993) ( NSP).
In this case, whether coverage is available to Land O' Lakes notwithstanding the owned-property exclusion depends on what Domtar meant by the phrase “there is actual injury ... to third-party property.” See N. States Power Co. v. Fid. & Cas. Co. of N.Y. (“ NSP I ”), 504 N.W.2d 240, 245 (Minn.Ct.App.1993) (“Expenditures to prevent future pollution of a type which has yet to occur or from a source which has yet to cause pollution ... are not covered because these costs are not causally related to the property damage.”), aff'd as modified,523 N.W.2d 657 (Minn.1994).
The court of appeals reversed the trial court and remanded the case, holding that the "total policy insuring intent" should have been analyzed to determine whether St. Paul's policies provided primary coverage and, under that analysis, St. Paul's policies provided primary coverage. Northern States Power Co. v. Fidelity and Cas. Co., 504 N.W.2d 240, 244-45 (Minn.App. 1993). The court of appeals also held that there was a genuine issue of material fact regarding whether all of the MPCA mandated expenditures were required to remedy existing contamination and whether the "owned property" exclusion precluded coverage for certain damages.
The triggering event for coverage is the actual damage, such as contamination of groundwater or soil during a policy period. Northern States Power v. Fidelity Casualty, 504 N.W.2d 240, 245 (Minn.App.), pet. for rev. granted in part, denied in part (Minn. Nov. 16, 1993); Industrial Steel, 399 N.W.2d at 159; see also Centennial Ins. v. Lumbermens Mut. Casualty, 677 F. Supp. 342, 346 (E.D.Pa. 1987) (applying actual injury rule and holding that each time wastes were released, there was an injurious effect triggering coverage); Fireman's Fund Ins. v. Ex-Cell-O Corp., 662 F. Supp. 71, 76 (E.D.Mich. 1987) (each exposure of the environment to a pollutant constitutes an occurrence and triggers coverage). St. Paul argues that Fairview cannot show damage during the policy periods that would trigger coverage.
178 Mich.App. at 719–20, 444 N.W.2d at 819 (internal citations omitted). In Northern States Power Co. v. Fidelity & Casualty Co. of New York, 504 N.W.2d 240 (Minn.Ct.App.1993), aff'd, 523 N.W.2d 657 (Minn.1994), the Court of Appeals of Minnesota rejected an insurer's argument that certain environmental cleanup costs were excluded from coverage by an owned-property exclusion. The insurer argued that it did not have to pay for removal of contaminated soil from its insured's property because no money had been spent to remedy the contamination of the groundwater but only to excavate and remove contaminated soil.
178 Mich. App. at 719-20, 444 N.W.2d at 819 (internal citations omitted). In Northern States Power Co. v. Fidelity & Casualty Co. of New York, 504 N.W.2d 240 (Minn. Ct. App. 1993), aff'd, 523 N.W.2d 657 (Minn. 1994), the Court of Appeals of Minnesota rejected an insurer's argument that certain environmental cleanup costs were excluded from coverage by an owned-property exclusion.
Expenses that must be incurred to remedy contamination to an insured's own property but are not also necessary to repair groundwater and associated soil contamination are precluded from coverage by the owned property exclusion. Northern States Power Co. v. Fidelity Cas. Co., 504 N.W.2d 240, 246 (Minn.App. 1993) (hereinafter NSP2); SCSC, 515 N.W.2d at 599. The insurers argue that the jury should have been allowed to determine how much of the site was actually contributing to groundwater contamination.
The CGL policies also provide that the Insurers will not pay for damages to Land O' Lakes's own property—the so-called owned-property exclusion. Under Minnesota law, the owned-property exclusion precludes coverage for costs incurred by an insured to remediate contamination that is “confined to the insured's property and unrelated to preventing off-site contamination.” Domtar Inc. v. Niagara Fire Ins. Co., 563 N.W.2d 724, 734 (Minn.1997). If contamination on an insured's own property has already damaged third-party property, however, government-mandated “[c]osts and expenses for the cleanup of” the contamination on both the insured's own property and third-party property may be covered. N. States Power Co. v. Fid. & Cas. Co. of N.Y., 504 N.W.2d 240, 245 (Minn.Ct.App.1993), aff'd as modified,523 N.W.2d 657 (Minn.1994). But costs and expenses to clean up the insured's own property in order “to prevent future pollution of a type which has yet to occur or from a source which has yet to cause pollution ... are not covered because these costs are not causally related to the [third-party] property damage.”
Our conclusion is supported by the fact that the limited and inexpensive repairs to the pipe's supporting system could easily be characterized as measures to prevent unknown future damage only, and thus would be outside the definition of "property damage." See Northern States Power Co. v. Fidelity Casualty Co. of New York, 504 N.W.2d 240, 245-46 (Minn.Ct.App. 1993) ("Expenditures to prevent future [damage] of a type which has yet to occur or from a source which has yet to cause [damage], however, are not covered because these costs are not causally related to the property damage."), aff'd as modified on other grounds, 523 N.W.2d 657 (Minn.
In support, plaintiff cites a Minnesota case that held "[e]xpenditures to prevent future pollution of a type which has yet to occur or from a source which has yet to cause pollution, however, are not covered because these costs are not causally related to the property damage." N. States Power Co. v. Fid. & Cas. Co. of New York, 504 N.W.2d 240, 245 (Minn. Ct. App. 1993), aff'd as modified, 523 N.W.2d 657 (Minn. 1994).