DocketNumber： Docket Nos. 96782-96784, (Calendar No. 4)
Judges： Boyle, Riley, Brickley, Levin, Cavanagh, Mallett, Weaver
Filed Date： 4/18/1995
Status： Precedential
Modified Date： 11/10/2024
(dissenting). The dispositive issue in this case is whether Arco intended or expected to contaminate the environment through its actions during 1968 through 1974, the period in which defendant, American Motorists Insurance Co (amico), insured it. The majority found that Arco did not intend or expect that its actions within this time frame would contaminate the environment. As a. result, the majority concluded that an occurrence within the definition of Arco’s insurance policy occurred and that amico should be liable for coverage.
I agree that Arco did not expect or intend to injure the environment during 1968 through 1972, but I have come to a different conclusion regarding
i
The insurance policy that this case revolves around was issued by amico to Arco in 1968. The policy was a comprehensive general liability policy which provided:
[Amico] will pay .on behalf of the insured all sums which the insured shall become legally obligated to pay as damages . . . caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent, and may make such investigation and settlement of any claim or suit as it deems expedient, but the company shall not be obligated to pay any claim or judgment or to defend any suit after the applicable limit of the company’s liability has been*432 exhausted by payment of judgments or settlements. [Emphasis added.]
Under the language of this policy, amico’s liability is triggered whenever an "occurrence” transpires. Fortunately, "occurrence” is defined within the policy as:
[An] accident, including injurious exposure to conditions, which results, during the policy period, in bodily injury or property damage neither expected nor intended from the standpoint of the insured. [Emphasis added.]
Unfortunately, the pivotal term "accident” is not defined within the policy. This is not an uncommon problem because in many insurance policies "accident” is not defined. When this happens, generally the "commonly used meaning” simply controls. Group Ins Co of Michigan v Czopek, 440 Mich 590, 596; 489 NW2d 444 (1992). In fact, this Court in Auto Club Group Ins Co v Marzonie, 447 Mich 624, 631-632; 527 NW2d 760 (1994), recently analyzed the common meaning of "accident” and found: " 'an accident is an undesigned contingency, a casualty, a happening by chance, something out of the usual course of things, unusual, fortuitous, not anticipated, and not naturally to be expected.’ ”
Hence, the first question becomes whether or not the vocs found their way to the seepage lagoon by means of an accident. The answer to this question is no. Ruth Kelly, an employee at Arco, testified that from about 1971 until 1973 she worked in the tool crib area cleaning glue guns. She would clean these guns by disassembling them and placing them into buckets of mek, a powerful solvent. When these buckets became too dirty, she would
A. We used mek for cleaning the glue guns.
Q. For cleaning the glue guns?
A. Yes.
Q. Was there a machine that cleaned the glue guns?
A. No. I did it myself. You tear ’em down and remove the o-rings and stuff that can’t go in the mek. And then you put the metal parts into the gallon pails of mek to soak the glue off of ’em.
Q. And you — would put the glue gun into the pail. Is that correct?
A. Right.
Q. Would you have to replace the mek in the pails, periodically?
A. Yes.
Q. And why was that?
A. Because it got dirty.
Q. With ...
A. With the glue in it.
Q. How would you dispose of that dirty mek?
A. The foreman in there told me to dump it in the drain.
Q. Which drain?
A. This one right here.
Q. Do you recall how often these gallon pails would get dirty and have to be replaced? The solvent, I mean.
A. I would say maybe every other week. It would depend on how many times you had to clean the gun.
The fact that Kelly was intentionally dumping
However, this was not the only time that Kelly intentionally brought about the flowing of vocs to the lagoon. In 1973, Kelly began work on the epoxy machine where she had more experiences with vocs. While working on the epoxy machine, one of her jobs was to use perchlor to clean up the epoxy that dripped from the machine every day. She deliberately poured this solvent onto the floor in order to loosen the epoxy from the floor. She would then mop up this epoxy-perchlor mixture right over the drains.
Q. In this process would some of the epoxy or vinyl drip or spill onto the floor?
A. Yes.
Q. How often?
A. Every day.
Q. And how close was the epoxy machine to the drain?
A. It sat right behind the drain. . . .
Q. And as a [sic] epoxy machine operator was it your responsibility to clean the floors around the machine?
A. Yes. It was.
Q. How often would you have to clean those floors?
A. Sometimes two or three times a day.
Q. And do you recall whether you used a solvent to do that?
A. Yes. At the time I think it was Perchlor we were using?
Q. Perchlor?
A. Yes.
*435 Q. Where would you get that Perchlor?
A. From Compounding.
Q. When you would mop the floors with the Perchlor would that Perchlor go down the drains?
A. Oh, yeah. Because it sat right there where you were mopping over the drain again.
Kelly’s act of mopping up the floors over the drains with perchlor was not uncommon — many of the other employees also cleaned the floors in this manner. In fact, the Court of Appeals in its decision wrote:
Former Arco employees also testified that vocs were used to mop the plant floors from at least 1964 to 1979. The mopping was often performed on and around the drains that led directly to the unlined lagoons. Given the frequency and volume of mopping required to clean the plant floors, some of the vocs would invariably go into the drains and be washed into the lagoons. [198 Mich App 347, 352; 497 NW2d 190 (1993).]
Koperdak also testified about the use of volatile organic compounds to mop the floors of the plant.
Q. They would come into compounding and sometime use a requisition to indicate we want the mop water; is that correct?
A. Yes.
Q. And they would be given a volatile organic compound as that mop water, correct?
A. Yes.
Q. And this is from when you started at Arco in 1972 at least up until 1979; is that correct?
A. Yes.
These employees, through their actions, were intentionally bringing about the placement of the vocs into the seepage lagoon. Their acts were not
ii
The next question becomes, Could Arco have expected the harm that occurred? The answer to this question lies in whether or not Arco expected that the vocs were harmful and whether they expected that they were going into the seepage lagoon.
A
Arco, without question, knew that these vocs were harmful because in 1972 it hired Ed Koperdak as a chemist. Koperdak admitted at trial that when he was hired he knew that the vocs being used at the plant posed a distinct danger to the environment.
Q. You understood, did you not, when you came to Arco that it was important that volatile organic compounds not be discharged in the seepage lagoon, correct?
A. Yes.
Q. And you knew that ... if those volatile organic compounds were discharged into the seepage lagoon they could degrade the environment; isn’t that correct?
A. Yes.
The fact that Koperdak possessed this knowledge is critical to the outcome of the case because under Upjohn this knowledge can be imputed to the corporation.
"[Knowledge acquired by employees within the*437 scope of their employment is imputed to the corporation. In consequence, a corporation cannot plead innocence by asserting that the information obtained by several employees was not acquired by any one individual employee who then would have comprehended its full import.” [Upjohn, supra at 213, quoting United States v TIME-DC, Inc, 381 F Supp 730, 738 (WD Va, 1974).]
Since Koperdak was employed as a chemist, any knowledge he acquired in regard to these vocs would be within the scope of his employment and imputed to Arco. Hence, Arco knew that the vocs were harmful to the environment.
B
Arco also knew that the vocs were going into the seepage lagoon. Koperdak prepared a memorandum on July 27, 1977, indicating that such vocs should not be dumped into the pond.
Q. To you, the purpose of this memorandum was to insure, was it not, that particular compounds didn’t make their way into the Arco pond; is that correct?
A. Yes.
Q. It wasn’t because you were worried about— this wasn’t primarily designed out of a concern for accidents within the plant that might harm employees; is that correct?
A. Yes.
Q. So your concern about ammonia was also — or your primary, key concern with ammonia was it getting into the drains and getting into the pond?
A. One of the concerns, yes.
Q. And your concern with solvents was solvents getting into the drains and getting to the pond?
A. Yes.
However, Koperdak claims that he prepared this
Q. In other words, when you came out with this memorandum you had never heard from anyone or had any knowledge or employees dumping any of these compounds in the drains?
A. No.
Q. Did you also send around memos telling employees not to break windows or tip over machines, even though that had never occurred in the past?
A. No.
In my opinion, Koperdak was aware that these vocs were leaking into the pond and it was this knowledge that inspired him to prepare the memorandum. In any event, even if he had no knowledge of these spills the result should remain the same since other employees were aware that these vocs were being placed into the seepage lagoon.
As stated before, Arco’s employees were placing vocs into the drains that led out to the lagoon by either mopping over the drains with perchlor or dumping mek directly into the drains. This knowledge was then imputed to Arco under Upjohn.
The majority, however, seems to argue that a specific employee has to know both that vocs are harmful and that they are being discharged into the lagoon in order for Arco to be able to expect that such harm will occur.
Although it is tempting to infer intention or an awareness of the dangers of vocs, there simply was no testimony that any of Arco’s employees released vocs into the environment with the intention to harm the environment. Furthermore, there was no testimony that anyone should have expected that harm would result from their actions. {Ante, p 415.]
Furthermore, we reject Upjohn’s assertion that the information obtained by several of its employees was not acquired by any individual employee who then would have comprehended its full import. . . . Rather, the Upjohn Company is considered to have acquired the same collective knowledge of its employees .... [Upjohn, supra at 215-216.]
Since Arco knew, through Koperdak, that these vocs were harmful to the environment and since Arco knew, through Ruth Kelly and the other employees, that the vocs were going to the seepage lagoon, it knew and expected that such harm would occur.
This expectation of harm is very similar to the expectation possessed by the defendant in Marzonie. In that case, Oaks fired a shotgun at an automobile. Unfortunately, the driver of the vehicle was struck by the blast and severely injured. Oaks indicated that he did not intend to hurt anyone and as a result should be covered under his homeowner’s insurance policy because the event occurred on his premises. This Court, however, found otherwise concluding that Oaks could have expected that his act of firing a shotgun at an occupied vehicle would injure someone. "[W]e find that Oaks should have expected bodily injury to result from firing this shotgun at Marzonie’s occupied vehicle.” Marzonie, supra at 644. As a result, an occurrence within the definition of Oaks’
The majority argues, however, that the facts here are similar to Frankenmuth Mutual Ins Co v Piccard, 440 Mich 539; 489 NW2d 422 (1992). In that case, Piccard intentionally set fire to his own store. While firemen were fighting the blaze, a fire fighter fell and was severely injured. This fireman then brought suit against Piccard, and Piccard’s insurance company brought the action to determine its liability to defend Piccard, its insured. The majority writes that this Court held in Pic-card:
that the intentional act of setting the fire could still be defined as an "occurrence” as long as the act was not committed with the intention or expectation that the injury to the fireman would occur. [Ante, p 416.]
The majority then attempts to draw a parallel from Piccard to the present case.
Similarly, in the instant case, even though the act of introducing vocs into the environment may have been intentional, there was no evidentiary support establishing that the acts were intended or expected to harm the environment. [Id.]
The majority, however, is incorrect. Arco knew that these vocs were harmful and were headed toward the unlined seepage lagoon. If Piccard knew that by setting the fire a fireman would fall from a roof and be injured, then surely he would have expected the injury and no accident would
iii
CONCLUSION
It is my opinion that Arco did not intend or expect to harm the environment from 1968 until 1972, so amico should be held liable for the damages that occurred during those years. However, from 1972 through 1974, Arco knew that vocs were being deliberately placed into the drainage ditches that led out to the lagoon. It also knew that these vocs posed a danger to the environment. Hence, it knew that its actions would cause serious environmental harm. As a result, the damage that happened to the environment from 1972 until 1974 was expected by Arco and was not an accident. Thus, an occurrence within the definition of Arco’s insurance policy never happened and amico’s liability was never triggered during those years.