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Queen City Farms Inc. v. Aetna Casualty & Surety Co.9/9/1994
xclusions in their policies. (The Lloyds' policy does not contain a pollution exclusion.) The motion for summary judgment was denied. The case went to the jury under the theory that the pollution exclusions provided for the same coverage as did the occurrence provisions of the Central National and Maryland Casualty policies, because the trial court had ruled the two clauses are functionally the same.
QCF argued that under the occurrence clause, which defined an occurrence as "an accident or happening or event or a continuous or repeated exposure to conditions which unexpectedly and unintentionally results in personal injury , property damage," Clerk's Papers of Appellant vols. 2 & 3, at 448, 466, 495, 519, a subjective standard of expectation applies. The trial court ruled and instructed that if QCF either subjectively or objectively expected or intended the leakage into the groundwater, there would be no coverage. By its answers in a special verdict form, the jury found that as of December 31, 1968, QCF expected or intended that material from the waste ponds would leak into the groundwater.
Lloyd's and Central National each asserted as a complete defense to coverage that QCF made material misrepresentations in obtaining insurance coverage. The jury found by special verdict that QCF or its brokers intentionally made material misrepresentations or concealments about the QCF site to these insurers with the intent to deceive.
QCF appealed, arguing that the trial court erred in submitting the question about its expectation under an objective standard. QCF also raised a number of issues relating to the misrepresentation defenses. Maryland Casualty and Central National cross-appealed, arguing that the pollution exclusion clauses in their policies preclude coverage as a matter of law.
The Court of Appeals agreed with QCF that a subjective standard applies to the question of its expectation of groundwater contamination, and ordered a new trial to determine coverage under Maryland Casualty's and Central National's policies. The Court of Appeals also agreed with QCF that Lloyd's and Central National failed to timely tender back premiums, and therefore were precluded from relying on a misrepresentation defense. The Court of Appeals concluded that Lloyd's was responsible for coverage because its policy was in effect before QCF expected or intended leakage into the groundwater, and it was not entitled to a misrepresentation defense. The Court of Appeals remanded for entry of judgment against Lloyd's. Queen City Farms, Inc. v. Central Nat'l Ins. Co. of Omaha, 64 Wash. App. 838, 827 P.2d 1024 (1992), review granted, 120 Wash. 2d 1025, 847 P.2d 481 (1993).
The insurers petitioned for review. Their petitions were granted. QCF filed a conditional petition for review, asking the court to review certain issues only if it granted the insurers' petitions for review.
A number of amicus curiae briefs have been filed.
"Unexpectedly and Unintentionally":
Objective or Subjective Standard
Whether QCF Preserved the Subjective-Objective Issue for Appeal.
The trial court ruled on a motion for summary judgment that personal injury or property damage was expected or intended if the insured subjectively or objectively intended or expected the injury or damage. The jury was instructed that QCF had the burden of proving that it did not "intend or expect that materials would leak from the disposal ponds into groundwater" and that "a reasonable person in the position of Queen City Farms should not have expected that the materials f
Page 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 Washington Personal Injury Attorneys
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