It’s been a few silly posts for me and this is likely to be the last one. The crappy cases about bat guano and cow manure and when insurance companies are obligated to pay for damage to structures or pollution of water supplies. The Wisconsin Supreme Court has ruled on the human septage and cow manure pollution cases.
Case Number One: Preisler v. General Casualty. Let me catch you up to speed…
Prieslers owned a dairy farm with a well that supplied their water. Across the road was the Kuettel farm. Kuettels also operated a septic business that emptied septic tanks, drain traps, etc. Being neighborly, the two families talked about using the septage on the Priesler’s fields as fertilizer. The DNR approved the use of human waste as fertilizer. Kuettels fertilized the Prieslers’ fields for several years. In 2008 Priesler cattle started dying at an alarming rate. Milk production started dropping off. The Prieslers’ well water was tested and it had abnormally high nitrate concentrations. A new well was dug and things went back to normal. The parties generally agreed that something the Kuettels spread or did contaminated the well.
The Preislers sued the Kuettels and their businesses and insurance companies were eventually added too. The insurance companies filed a motion to get out of the case claiming the commercial general liability policies excluded coverage for harm or damage arising out of the distribution of “pollutants.” “Pollutants” is defined by the policies to include “waste.” “Waste” includes materials to be recycled, reconditioned or reclaimed.
The local county court agreed with insurance companies. The Court of Appeals agreed with the insurance companies. The Courts generally stated that no reasonable insured (septic business owner) would expect an insurance company to pay for well water contamination. The Supreme Court agreed, “we conclude that the insureds’ claims fall within the unambiguous terms of the pollution
exclusion clauses.” (Interestingly, it took 28 pages of writing to get to that conclusion.)
“We conclude that a reasonable insured would understand
that decomposing septage is a “contaminant” and therefore, a
“pollutant” as defined in the policies when it has decomposed
and seeps into a water supply. Accordingly, we affirm the
decision of the court of appeals, which granted summary judgment
upon its conclusion that the pollution exclusion clause precluded coverage for harm resulting from the Preislers’ water
supply’s contamination.”
The Supreme Court’s Opinion in Preisler is available on the Wisconsin Courts’ Website
Case Number Two. Wilson Mutual Insurance Co. v. Falk, was decided by the Supreme Court on the same day. Wilson was slightly different from Priesler in that the “pollutant” was cow manure, not human septage. The Falks were sued after their cow manure polluted neighbors’ water supplies. Their insurance company argued they didn’t have to pay the claims because cow manure is a “pollutant.” The local court agreed, but the Court of Appeals reversed concluding that a reasonable farmer considers cow manure “liquid gold” and not a pollutant. The Supreme Court disagreed and ordered that the insurance company does not have provide coverage for damage caused by cow manure.
“We hold that the pollution exclusion clause in Wilson
Mutual’s General Farm Coverage Liability policy issued to the
Falks unambiguously excludes coverage for well contamination
caused by the seepage of cow manure. First, we conclude that
cow manure falls unambiguously within the policy’s definition of
“pollutants” when it enters a well. Second, we conclude the
Farm Chemicals Limited Liability Endorsement likewise excludes
coverage for “physical injury to property” resulting from
pollutants. Finally, we conclude that the “Damage to Property
of Others” clause under the incidental coverages section
provides incidental coverage up to $500 for each unique well
that has allegedly been contaminated by the Falks’ manure, and
Wilson Mutual has a duty to defend. Accordingly, the decision
of the court of appeals is reversed and we remand to the circuit
court for further proceedings consistent with our holding.”
You can find the Wilson opinion on the Wisconsin Courts Website.
I like to think about the practical implications of cases like these. I think what this generally means for farmers and septic business operators is that insurance policies will now offer additional, and likely expensive, riders. For an additional cost, you can make certain your shit is covered.
Johanna R Kirk, Kirk Law Office, LLC;
Superior, WI