Insurance Law

Plaintiff insurer sought declaration of no duty to defend a marble company in action filed by homeowners residing within one mile of its manufacturing plant. Complaint alleged that plant caused pollution and hazardous odorous emissions dispersed into atmosphere by chemicals used in manufacturing processes. Because plant operated pursuant to an emissions permit, it cannot be considered to have expected or intended to injure underlying plaintiffs' persons or properties. Comparing complaint's allegations to policy provisions, it is unclear whether permitted emissions are traditional environmental pollution excluded under policy; thus, resolving ambiguities in favor of insured plant, the insurer has a duty to defend. (SCHMIDT and HOLDRIDGE, concurring.)

(Court opinion corrected 9/7/11.) Court properly granted summary judgment for professional liability insurer, finding that its indemnity obligation was limited to $100,000 for numerous claims and suits arising from law firm's former paralegal having embezzled significant funds from several probate estates. Embezzlement scheme is a common fact, circumstance, situation, or decision under the policy, and allegations of law firm's alleged failure to monitor paralegal's activities are related claims under plain language of policy. (HALL and HOFFMAN, concurring.)

Insurer filed declaratory judgment action against its insured, alleging that she was barred from pursuing uninsured motorist claim because she did not demand arbitration within 2-year period required by policy. Accident occurred in Wisconsin, which has 3-year statute of limitations for personal injury suits. Thus, 2-year arbitration demand time deadline in policy is against public policy as to insured, as it effectively shortens the applicable Wisconsin statute of limitations from three to two years, and thereby places insured in a substantially different position than if the other driver had been insured. (HOLDRIDGE, concurring; McDADE, dissenting.)

(Court opinion corrected 8/29/11.) Plaintiff sued adverse driver's insurer for injuries to himself and his passenger from collision. Adverse driver's mother had car policy and truck policy with insurer. As adverse driver was driving truck at time of collision, the car policy was inapplicable, and the exclusion in the car policy excludes Plaintiff from recovering from that policy. Insurer did not waive exclusion by not asserting it in its reservation of rights letter. (CUNNINGHAM and CONNORS, concurring.)

Property owner sued Plaintiff, a successor tenant, and previous tenants, which manufactured electrostatic coating application equipment, for environmental contamination. Assignment of insurance benefits to successor tenant occurred afer loss, as the chose in action came into existence when contamination occurred, and chose in action was then established, as a conditional right to the insurance proceeds, and was assignable without consent of insurer. Underlying complaint sufficiently alleged that loss occurred during period of coverage and that conditions for assignment had occurred, so that insurer had duty to defend Plaintiff. (CUNNINGHAM and HARRIS, concurring.)

Court properly ruled that homeowners policy insurer was required to defend its insured in malicious prosecution suit, where policy definition of "personal injury" included injury arising from "malicious prosecution". Suit against insured seeks damages for common law tort of malicious prosecution, and thus alleges injury arising from malicious prosecution. Although policy generally excluded coverage of intentional conduct, it explicitly provided coverage for damages caused by malicious prosecution, and the insured could reasonably anticipate that policy protections would apply. (McDADE and O'BRIEN, concurring.)

Complaint alleged property damage to condominium from water leakage due to design and/or construction defects. Underlying pleadings sufficiently established that plaintiff insurer had a duty to defend window sealant subcontractor, to whom it provided CGL and umbrella insurance, in a third-party action alleging that subcontractor negligently completed its work. Pleadings alleged property damage and "occurrence" that bring the cause within, or potentially within, CGL policy coverage. (HALL and ROCHFORD, concurring.)