Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

05/18/95 LAPHAM-HICKEY STEEL CORPORATION v.

May 18, 1995

LAPHAM-HICKEY STEEL CORPORATION, APPELLEE,
v.
PROTECTION MUTUAL INSURANCE COMPANY, APPELLANT.



Appeal from the Appellate Court for the First District; heard in that court on appeal from the Circuit Court of Cook County, the Hon. John N. Hourihane, Judge, presiding.

As Modified on Denial of Rehearing October 2, 1995.

The Honorable Justice Heiple delivered the opinion of the court:

The opinion of the court was delivered by: Heiple

JUSTICE HEIPLE delivered the opinion of the court:

Lapham-Hickey Steel Corporation (Lapham-Hickey) filed a declaratory judgment action in the circuit court of Cook County seeking a determination of its right to insurance coverage under an "all risks" insurance policy provided by Protection Mutual Insurance Company (Protection). Lapham-Hickey sought to recover defense costs associated with the investigation of environmental contamination at one of its facilities. The circuit court granted summary judgment in favor of Protection, finding that Lapham-Hickey failed to file the declaratory judgment action within the relevant time limitation provision of the policy and denied summary judgment in favor of Lapham-Hickey, finding that no suit had been filed against Lapham-Hickey sufficient to trigger Protection's duty to defend. The appellate court reversed, stating that Lapham-Hickey had alleged a valid and timely cause of action against Protection. (262 Ill. App. 3d 400, 633 N.E.2d 1235, 199 Ill. Dec. 244.) We granted leave to appeal (145 Ill. 2d R. 315).

BACKGROUND

Between approximately 1910 and 1956, the Valentine-Clark Corporation operated a facility on Doswell Avenue in St. Paul, Minnesota. The Doswell facility was used for treating telephone poles with wood preservatives, including creosote, fuel oil and pentachlorophenol. The United States Environmental Protection Agency (EPA) has determined that Valentine-Clark's operations and waste disposal practices contaminated the surface and subsurface soils of the facility with polynuclear aromater hydrocarbons, pentachlorophenol and oil.

In March 1985, Lapham-Hickey purchased the Doswell facility without knowledge of the environmental contamination. In May 1985, Lapham-Hickey obtained a first-party all-risks insurance policy from Protection to cover the Doswell facility. The policy was delivered to Lapham-Hickey in Illinois and was effective from May 1, 1985, until May 1, 1988. The policy covered Lapham-Hickey against "all risks of physical loss or damage" to the property described in the policy, unless an exclusion applied. In its schedule of locations, the policy listed the Doswell facility along with other property located in Illinois, Missouri, Wisconsin, Indiana and Ohio. The policy required that any suit against Protection be commenced within 12 months after the occurrence which gave rise to the claim, if the 12-month period was reasonable under the law of the jurisdiction where the property was located.

In May of 1987, Lapham-Hickey received notice from Ecology and Environment that it had been retained by the EPA to investigate the Doswell facility as a possible candidate for placement on the "National Priorities List" under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA). Several months later, Lapham-Hickey learned that the Minnesota Pollution Control Agency (MPCA) would be taking over the investigation of the Doswell facility.

In October of 1987, the MPCA sent Lapham-Hickey a proposed consent order. This draft order stated that surface and subsurface soils at the Doswell facility were contaminated, that there was possible groundwater contamination, and that Lapham-Hickey was a "responsible person." Under Minnesota law, a responsible person is "strictly liable" for "response costs and damages which result from the release or threatened release" of a hazardous substance. (9 Minn. Stat. Ann. ยง 115B.04 (West 1987).) The proposed order also required Lapham-Hickey to undertake a remedial investigation and feasibility study of the Doswell facility. Lapham-Hickey did not agree to or sign the proposed consent order.

Rather, between October 1987 and March 1988, Lapham-Hickey and its environmental consultants entered into negotiations with the MPCA. The negotiations resulted in a "no-action" letter being issued. The letter, dated June 8, 1988, stated that the MPCA had made no determination of whether Lapham-Hickey was a responsible person within the meaning of the Minnesota environmental regulations. The letter further stated that the MPCA did not believe that Lapham-Hickey was a responsible person with respect to the Doswell facility and that the MPCA staff did not intend to recommend any enforcement action against Lapham-Hickey as a responsible person. In the letter, the MPCA approved a work plan which Lapham-Hickey had submitted in respect to voluntarily conducting an investigation of the facility.

Lapham-Hickey's environmental consultants began an investigation of the facility in July of 1987 and the investigation continued after the "no-action" letter was issued. That investigation culminated in January of 1989 when the consultants submitted a report to Lapham-Hickey confirming the existence of contamination at the Doswell facility. The record does not indicate that the MPCA or the EPA made any further requests of Lapham-Hickey or initiated any enforcement action after the issuance of the "no-action" letter.

In March of 1990, Lapham-Hickey filed a declaratory judgment and breach of contract action against Protection, alleging that Protection owed a duty to reimburse Lapham-Hickey for the investigative costs it expended after the MPCA issued the proposed consent order. Both parties filed cross-motions for summary judgment. Lapham-Hickey claimed that Protection had breached its duty to defend. In its motion Lapham-Hickey stated that to date it had only incurred defense costs for experts and the services of counsel in responding to the proposed consent order and the "no-action" letter. Protection claimed that the instant declaratory judgment action had not been commenced within the 12-month suit limitation provision of the policy.

The trial judge granted Protection's motion for summary judgment and denied Lapham-Hickey's motion, finding that Lapham-Hickey was in a position to file suit when its environmental consultants submitted the report in January 1989. Since Lapham-Hickey did not file suit until over one year after it received the report, the 12-month suit limitation provision prohibited the suit. The trial judge also stated that even if the suit limitation period was ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.