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Wisconsin v. Rhinelander, City of

Citation: 32 ELR 20321
No. No. 00-2666, 638 N.W.2d 393/(Wis. Ct. App., 11/29/2001)

The court affirms summary judgments dismissing a city's claim that its insurer breached its duty to indemnify and defend the city in a state action filed against it for damages and remediation of a landfill that was leaching contaminants into the groundwater and a nearby stream and dismissing the insurer's claim that its umbrella policy does not provide coverage for a settlement between the city and the state. Under the settlement, the city agreed to pay one-third of the cost of remediation, and the state agreed to forego collection of damages. The court first holds that the trial court correctly concluded that the primary liability policies do not provide coverage for expenses the city will incur complying with the stipulation because the policies only cover sums payable "as damages," and the judgment includes no damages. The court next holds that the insurance companies did not violate their duty to defend the city merely because the city's attorney represented the insurance company in other litigation. The court further holds that the trial court properly held that the insurer's umbrella policy provides coverage for remedial expenses arising out of the stipulation. Unlike the primary insurance policies, the umbrella policy contains no language limiting its coverage to damages. The court finally holds that the trial court properly denied the insurer's motion for summary judgment based on the known loss doctrine. Whether the city knew that leachate from the landfill contained unacceptable levels of contaminants and whether it knew its remedial efforts to reduce leachate failed are matters for a jury to decide.

The full text of this opinion is available from ELR (6 pp., ELR Order No. L-406).

Counsel for Plaintiff
Thomas L. Dosch
Attorney General's Office
114 E. State Capitol, Madison WI 53707
(608) 266-1221

Counsel for Defendant
James Kurtz
Department of Natural Resources
P.O. Box 7921, Madison WI 53707
(608) 266-2621/275-3266