CONTAMINATION FROM MANUFACTURING PROCESS NOT COVERED

Commercial General Liability	Pollution Exclusion
Commercial Umbrella	Occurrence
Known-loss

From 1961 until abandoning its facility due to bankruptcy in 1991, The Getzen Company, Inc. (Getzen) manufactured brass musical instrument. The manufacturing process involved the machining, shaping and plating of a variety of metals into finished musical instruments. The process generated various waste contaminants which the Insured routinely discharged into an unlined back-lot waste lagoon through a series of drains and pipes. All this was done despite regular and frequent citations and communications from the Wisconsin Department of Natural Resources concerning the disposal of wastes.

The City of Elkhorn filed a complaint against the Insured, arguing that as a result of the Insured’s manufacturing operations, the soil and groundwater on the Insured’s property was contaminated and the pollution emanating from that property contaminated groundwater off the property, which threatened the City’s drinking water supply. Getzen, in turn, sought indemnification from its commercial general liability  and its umbrella insurers (Northbrook) who  filed motions for summary judgment, advancing several alternative arguments to support their position that the policies did not afford coverage. The circuit court granted Northbrook’s motion for summary judgment, with the explanation that coverage was excluded under the definition of "occurrence," the pollution exclusion clauses, the known-loss doctrines and that no genuine issues of material fact existed with respect to those issues.

The City appealed and the appellate court affirmed the circuit court’s findings. It determined that there were no genuine issues of material fact with respect to whether the contamination was the result of an "occurrence" that would require a trial. There was no coverage for the claims under the manufacturer’s comprehensive general liability policies, because the environmental damage was not caused by an "occurrence" as defined in those policies but was instead due to Getzen’s routine practice of pumping into an unlined lagoon. Getzen knew its methods of hazardous waste disposal were unacceptable but continued. As the circuit court rightly observed, "Getzen’s dumping of hazardous materials was not an accident-it was (thirty) years of deliberate dumping."

City of Elkhorn, Plaintiff-Appellant v. The 211 CENTRALIA STREET CORPORATION, Defendant; Northbrook Property and Casualty Insurance Company and Northbrook National Insurance Companies, foreign insurance corporations, Zurich American Insurance Company and American Guaranty and Liability Insurance Company, foreign insurance corporations, Defendants-Respondents. Wisconsin Court of Appeals, District II. No. 03-2077. Filed June 30, 2004. Affirmed. CCH Personal and Commercial Liability Cases. Paragraph 16,092.