Petition for Writ of Certiorari — Tonka Corp. v. Bituminous Casualty Corp.
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Supreme Court, U.S.
) FILED
931491 MAR 2 119%
In the
Supreme Court of the Wnited States
October Term, 1993
BITUMINOUS CASUALTY CORPORATION,
an Illinois corporation,
Respondent,
v.
TONKA CORPORATION, a Minnesota corporation,
Petitioner,
Vv.
BITUMINOUS CASUALTY CORPORATION,
THE TRAVELERS INSURANCE COMPANY, NORTH
RIVER INSURANCE COMPANY, GREAT AMERICAN
INSURANCE COMPANY, INDUSTRIAL INDEMNITY
COMPANY, ZURICH INSURANCE COMPANY,
UNITED STATES FIRE INSURANCE COMPANY,
MISSION NATIONAL INSURANCE COMPANY,
TWIN CITY FIRE INSURANCE COMPANY,
Respondents.
PETITION FOR A WRIT OF CERTIORARI TO THE UNITED
STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT
PETITION FOR A WRIT OF CERTIORARI
David F. Herr, Esq.
Counsel of Record
Mary R. Vasaly, Esq.
Maslon Edelman Borman & Brand
3300 Norwest Center
Minneapolis, Minnesota 55402
(612) 672-8200
Attorneys for Petitioner
Tonka Corporation
1994 — Bachman Legal! Printing @ (612) 339-9518 @ FAX (612) 337-8053
QUESTIONS PRESENTED
Petitioner seeks a writ of certiorari to review a
decision of the Eighth Circuit Court of Appeals affirming
a summary judgment against the Petitioner. The
following questions would be raised in this writ:
A. When a moving party with the burden of
persuasion under the applicable law moves for
summary judgment pursuant to Rule 56, Fed. R.
Civ. P., and the non-moving party has submitted
admissible evidence on an issue of material fact,
may a court weigh the evidence and grant
summary judgment against the non-moving party?
Did the Court of Appeals for the Eighth Circuit
err in not certifying a question of Minnesota law
to the Minnesota Supreme Court pursuant to
Minnesota’s statutory certification procedure when
the question involved issues of state public policy
not previously determined by Minnesota’s courts?
RULE 29.1 STATEMENT
The parent corporation of petitioner, Tonka
Corporation, is Hasbro, Inc. Tonka Corporation’s
subsidiaries (other than wholly owned subsidiaries) are
Hasbro Italy Srl, Promo Toys, Sri, Hasbro Osterreich
GES.mbH, Hasbro U.K. Ltd., and Hasbro Canada Inc.
li
TABLE OF CONTENTS
Sie ee GS kg 65a hd dvb cher Vv
SE CmeeTE COP TOPCASE ook cc cee eee +
i. SHE PACTUAL RECORD . 2... cc cccccen 4
II. HISTORY OF THE LITIGATION.......... .
III. THE DISTRICT COURT’S DECISION ...... 8
[V. THE COURT OF APPEALS’ DECISION ..... 9
REASONS FOR GRANTING THE WRIT ....... 13
I. THIS COURT SHOULD CLARIFY
THE STANDARDS FOR GRANTING
SUMMARY JUDGMENT ............ 13
A. Where The Movant Bears The Burden
Of Persuasion, The Court Must
Determine Whether It Has
Established Its Claim With
Undisputed Evidence ............. 14
B. In This Case, The Summary Judgment
Standards Were Improperly Applied .... 15
C. This Decision Will Have A Negative Impact
On Both The Federal Judicial System And
The Individual Litigant ............ 19
ill
II. THIS COURT SHOULD PROVIDE GUIDANCE
TO THE LOWER COURTS REGARDING
CERTIFICATION OF ISSUES OF STATE
PUBLIC POLICY TO THE STATE’S
NE GUE 6Gaiee es Sih oes . 24
A. Federalism Principles Require State Courts
To Formulate State Policy .......... 27
B. The Courts’ Refusal To Certify Denied
Tonka The Application Of Minnesota
Public Policy To The Issues ......... 29
WN 8 08 eo ce SE eee 30
cupid . n... Geer ee ee A-|
iV
TABLE OF AUTHORITIES
CASES
Aetna Cas. & Surety Co. v. General Dynamics
Corp., 968 F.2d 707 (8th Cir. 1992) ..... 8, 26
Anderson v. Liberty Lobby, Inc., 477 U.S. 242
See hi ie is WS Ts so SS 19, 20
Augustine v. GAF Corp., 971 F.2d 129
kk. RR es, amr ee 15
Bituminous Cas. Corp. v. Bartlett, 240 N.W.2d
ee ee 18
Bulthuis v. Rexall Corp. , 789 F.2d 1315
oe Oe Pe enn ee 22
Burford v. Sun Oil Co., 319 U.S. 315 (1943) . 28
Bushman v. Halm, 798 F.2d 651 (3d Cir. 1986) 22
Canada v. Blain’s Helicopters, Inc., 831 F.2d 920
a ee ee ee eee 22
Celotex Corp. v. Catrett, 477 U.S. 317
I a -eie be Grebe ee owe oe: 14, 17,
20, 21,
22
Claussen v. Aetna Cas. & Sur. Co., 380 S.E.2d
et oc hu TEE TE ee eee
Commissioner v. Estate of Bosch, 387 U.S.
“sive SET OL ee ene
Continental Ins. Cos. v. Northeastern
Pharmaceutical & Chem. Co., 842 F.2d
977 (8th Cir.), cert. denied, 488 U.S.
seh oS ee Ree
Continental W. Ins. Co. y. Toal, 244 N.W.2d
tt hoo gah cin CEO Oe rae
Dick v. New York Life Ins. Co., 359 U.S. 437
EN 6 eho sa ae.
Erie R.R. Co. v. Tompkins, 304 U.S. 64
a, TEER COE OO ene
Financial Timing Publications, Inc. y.
Compugraphic Corp., 893 F.2d 936
PS NS e's oie bc veux cb
Gibson vy. Phillips Petroleum Co.,
352 U.S. 874 (1956)... ....0.0.2...
Grinnell Mut. Reins. Co. y. Wasmuth,
432 N.W.2d 495 (Minn. Ct. App. 1988)...
Hatfield v. Bishop Clarkson Memorial Hosp.,
701 F.2d 1266 (8th Cir. Sa
vi
14
26
15
14
26
29
oh tlt
Hauenstein v. St. Paul-Mercury Indem. Co..,
65 N.W.2d 122 (Minn. 1954)10 ........
James Graham Brown Found., Inc. v.
St. Paul Fire & Marine Ins. Co.,
814 S.W.2d 273 (Ky. 1991) ..........
Lanoue v. Fireman’s Fund Am. Ins. Co.,
278 N.W.2d 49 (Minn. 1979) .........
Lehman Bros. v. Schein, 416 U.S. 386 (1974) .
Liberty Lobby, Inc. v. Anderson,
746 F.2d 1563 (D.C. Cir. 1984)........
Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574 er
Matter of Welfare of M.D.O., 462 N.W.2d 370
I a ee
Minnesota Mining & Mfg. Co. v. Travelers
Indem. Co., 457 N.W.2d 175 (Minn. 1990) .
Monks v. General Elec. Co., 919 F.2d 1189
i FS EP le ee
Offshore Aviation v. Transcon Lines, Inc.,
831 F.2d 1013 (11th Cir. 1987) ........
Prahm v. Rupp Constr. Co., 277 N.W.2d 389
ADEN a eee eee agie, Peete
Salve Regina College v. Russell, 499 U.S.
i EE Ora ee 25
Smith v. Hughes Aircraft Co., 10 F.3d 1448
GON A wey we VE A ee. 10
Sylvester Bros. Dev. Co. v. Great Central
Ins. Co., 480 N.W.2d 368 (Minn. Ct.
Sn okies ME CE ee 16
United States v. Diebold, Inc. , 369 U.S.
citing. LETT ee 15
Wilkerson vy. McCarthy, 336 U.S. 53 ( 1949) .. 14
Woyke v. Tonka Corp., 420 N.W.2d 624
(Minn. Ct. App. 1988) ............. 10
STATUTES
seUSC. § 12501) ................ 2
oP ee er ss 8 oe 6 a 4
FI oi hi Rs 2
The Uniform Certification of Questions of Law
Act, Minn. Stat. § 480.061 eee See + ef
24
Fed. R. Evid. 702 & 703. ............. 8
- SA hak a aes aS
Sup. Ct. R. 10.1
ay ee OES are sd ey. cs 2, 13
MISCELLANEOUS
James V. Chin, Clark v. Coats & Clark, Inc.:
The Eleventh Circuit Clarifies the Initial
Burden in a Motion for Summary Judgment,
26 Ga. L. Rev. 1009, 1021 (1992)
Jack H. Friedenthal, Cases on Summary Judgment:
Has There Been a Material Change in Standards?
63 Notre Dame L. Rev. 770, 781 (1988) .. 17
Nancy Levit, The Caseload Conundrum,
Constitutional Restraint and the Manipulation
of Jurisdiction, 64 Notre Dame L.
eke te LA, 18
Martin Louis, Intercepting and Discouraging
Doubtful Litigation: A Golden Anniversary
View of Pleading, Summary Judgment And
Rule 1] Sanctions under the Federal Rules
of Civil Procedure, 67 N.C.L. Rev.
ee 23
ix
‘Milissa ‘Neélken, One Step Forward, Two Steps
Back: Summary Judgment After Celotex,
40 Hastings L.J. 53, 81-82 (1988) ....... 22
D. Michael Risinger, Another Step in the Counter-
Revolution: a Summary Judgment on the
Supreme Court’s New Approach to Summary
Judgment, 54 Brook. L. Rev. 35 (1988) .. . 19, 20
Delores K. Sloviter, Diversity Jurisdiction
Through the Lens of Federalism, 78 Va. L.
Mov. 1663, 1682 CI99RD . . oc cc occ. 27, 28
Jeffrey W. Stempel, A Distorted Mirror:
The Supreme Court’s Shimmering View of
Summary Judgment, Directed Verdict and
the Adjudicative Process, 49 Ohio St.
Ld. FS, WOT (IGGB) ccc ccc ec ee 18, 19,
In The
Supreme Court of the United States
October Term, 1994
No.
Bituminous Casualty Corporation, an Illinois corporation,
Respondent,
-V .*
Tonka Corporation, a Minnesota corporation,
Petitioner,
-V.-
Bituminous Casualty Corporation, The Travelers
Insurance Company, North River Insurance Company,
Great American Insurance Company, Industrial Indemnity
Company, Zurich Insurance Company, United States Fire
Insurance Company, Mission National Insurance
Company, Twin City Fire Insurance Company,
Respondents.
PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT
Tonka Corporation respectfully petitions for a writ of
certiorari to review the judgment of the United States
Court of Appeals for the Eighth Circuit in this case.
PARTIES TO THE PROCEEDING
The parties to the instant proceeding are those set
forth in the caption on the cover of this petition.
OPINIONS BELOW
The opinion of the district court was issued on
August 21, 1992, and is not reported. Appendix ("A-")
11. A panel of the Eighth Circuit Court of Appeals
issued its decision on November 12, 1993. A-2. This
decision is reported at 9 F.3d 51 (8th Cir. 1993). The
Eighth Circuit denied Tonka’s Petition for Rehearing on
December 21, 1993. A-39. See 1993 U.S.App. LEXIS
33474 (8th Cir. Dec. 21, 1993).
JURISDICTION
Jurisdiction is proper pursuant to 28 U.S.C.
§ 1254(1), which provides for review of cases in the
courts of appeals "[b]y writ of certiorari granted upon the
petition of any party to any civil or criminal case, before
or after rendition of judgment or decree." Under 28
U.S.C. § 2101(c), a writ of certiorari intended to bring
any judgment or decree in a civil action, suit or
proceeding before the Supreme Court for review shall be
taken or applied for within ninety days after the entry of
such judgment or decree. See also Sup. Ct. R. 13.1.
The ninety day period runs from the date of the denial of
a petition for rehearing. Jd. at 13.4. In this case, the
Eighth Circuit filed the decision which Tonka appeals on
November 12, 1993. Tonka filed a petition for rehearing
which was denied on December 21, 1993. A-39.
2
STATUTES INVOLVED
The Uniform Certification of Questions of Law Act,
Minn. Stat. § 480.061 (1990), is set out in full in the
appendix at A-40.
This case also raises issues concerning Rule 56, Fed.
R. Civ. P., which is set out in full in the appendix at A-
43.
STATEMENT OF THE CASE
I. THE FACTUAL RECORD
Tonka,’ a toy manufacturer, purchased numerous
comprehensive general liability insurance policies. These
policies provided coverage for “all sums which {Tonka}
shall become legally obligated to pay as damages because
of injury to or destruction of property" caused by an
occurrence. The Insurers also promised to defend Tonka
against any suit alleging such injury. Tonka purchased
these liability policies to provide it with coverage for the
entire period it operated its manufacturing plant in
Mound, Minnesota. In 1984, Tonka discovered the
presence of a contaminant in the groundwater beneath the
plant. After Tonka notified the Minnesota Pollution
Control Agency ("“MPCA") of the contamination, the
MPCA required Tonka to provide it with information,
undertake an investigation and monitor the site. Tonka
requested its insurers to defend it in connection with its
response to the MPCA and to indemnify it for the cost of
complying with the MPCA’s directives.
Il. HISTORY OF THE LITIGATION
Bituminous Casualty Corporation ("Bituminous")
commenced this action in May 1987 to avoid defending
Tonka against the MPCA’s claims. Jurisdiction in the
‘Hereinafter, petitioner (appellant in the Eighth Circuit),
will be denominated Tonka Corporation or "Tonka."
Respondents (appellees in the Eighth Circuit) will be referred
to collectively as the “Insurers.”
4
ee aniiaeneimiaaiiiiiilillll
district court was premised on diversity of citizenship of
the parties pursuant to 28 U.S.C. § 1332. Tonka
counterclaimed and brought third-party claims against the
other insurers seeking to enforce their duty to defend
Tonka pursuant to the comprehensive general liability
insurance policies they sold to Tonka.
The Insurers moved for summary judgment in 1988 on
the grounds that the costs of complying with the MPCA’s
orders were not “damages.” The district court certified
the question pursuant to Minn. Stat. § 480.061 (1990), to
the Minnesota Supreme Court in a consolidated
proceeding with two other pending actions. In Minnesota
Mining & Mfg. Co. v. Travelers Indem. Co., 457
N.W.2d 175 (Minn. 1990) ("3M"), the Minnesota
Supreme Court held that injuries to the State’s
groundwater resources were "damages" which were
covered by Tonka’s insurance policies. In the course of
its decision, the Minnesota Supreme Court specifically
rejected a decision on the same issue rendered by the
Eighth Circuit Court of Appeals in Continental Ins. Cos.
v. Northeastern Pharmaceutical & Chem. Co., 842 F.2d
977 (8th Cir.), cert. denied, 488 U.S. 821 (1988)
("NEPACCO"). The Minnesota Supreme Court's
decision reflected the State’s public policy of enforcing
the obligations of the insurance industry and encouraging
prompt environmental clean-up. The court expressly left
to the federal court, “the task of determining precisely
which costs associated with the Clean-up of the
contaminated sites will be covered." 457 N.W.2d at
184.
After the Minnesota Supreme Court’s decision, the
parties commenced discovery. The Insurers again moved
for summary judgment in March 1991 on the grounds
that Tonka had allegedly intentionally caused the damage
for which it sought coverage by discharging oil
contaminated with trichlorethylene ("TCE") on the site
during the 1950s knowing that such discharge would
cause third-party property damage.’ Although Tonka had
used TCE in manufacturing and there was evidence that
there had been site disposal of liquid wastes for a limited
period during the 1950s, there was no evidence that
Tonka knew at the time that there were chemicals in the
waste or that its waste disposal activities would cause
third-party property damage.’ Moreover, the Insurers did
not support the summary judgmeet motion with any
scientific evidence of causation; ri*!" they pointed to the
site disposal in the 1950s and reliew .»n an inference that
this disposal caused the damages.
Tonka responded to the summary judgment motion by
presenting the court with specific admissible evidence in
the form of authentic documents and sworn affidavits
from employees which showed that:
"An insured may not recover under the policies for
damages which are not "accidental" or which it expected or
intended to cause.
*Tonka’s liquid waste stream at the time included "still
bottoms." Still bottoms are a mixture of oil and dirt that
results from the toy degreasing process. TCE is used in that
process and may have been present in the still bottoms. Its
presence was accidental, however, because Tonka used a still
to remove TCE from the waste and Tonka’s employees at the
time of the disposal believed the waste was TCE-free.
6
O88 BADER wee!
SAS Pew o Ge aad
(1) Tonka did not know that there were contaminants
in the oil which may have been deposited on the
site;*
(2) Tonka had no intention or expectation that liquid
waste deposited on the site would harm the
groundwater or otherwise cause third party
property damage;
(3) damage to the groundwater was not caused by
intentional disposal of liquid waste on the site.
Tonka also requested that the court certify the legal
issues in the case to the Minnesota Supreme Court since
‘Tonka submitted the following evidence: (1) Tonka
always used a still to remove TCE from waste oil; (2) the stil!
manufacturer told Tonka that the still would remove all of the
TCE; (3) Tonka’s employees reasonably believed that the still
removed all of the TCE and were specifically told to observe
the still process to make sure all of the TCE had been
removed; (4) employees were told to reboil the still oil if it
smelled of TCE or if it could be observed: the operator’s job
was to boil the oil “until there was no more [TCE] in it;” (5)
a test of the still oil had confirmed that it contained no TCE:
(6) there was no evidence that the still oil in the 1950s smelled
of TCE; (7) the detection of TCE in the still oil by test and
smell occurred in 1982 because of improper operation of the
still; (8) Tonka’s manufacturing process “consumed” large
amounts of TCE because TCE is volatile at room temperature
and a Tonka employee testified that all waste was accounted
for in Tonka’s disposal records.
7
that court had not decided a case involving insurance
coverage of pollution liability.°
Il. THE DISTRICT COURT’S DECISION
The district court granted summary judgment against
Tonka, without any articulation of the standard for
granting summary judgment or discussion of the evidence
Tonka submitted. Instead, throughout the opinion, the
court arrived at factual conclusions citing only the
evidence submitted by the Insurers. And, in an instance
where the court did note the existence of evidence Tonka
submitted, that evidence was excluded. The court
refused to consider Tonka’s expert’s affidavit regarding
the cause of the contamination on the grounds that it did
not show a factual basis or support in the record for the
opinions and did not satisfy the requirements of Fed. R.
Evid. 702 & 703. A-33, n.6.
The court held as a matter of law that Tonka had not
used a still to remove TCE from its liquid waste and
could be presumed to have known that disposal of TCE-
laden waste from the still on the site would cause
*Although courts around the United States were divided on
these legal issues, the Eighth Circuit had articulated its
antipathy to insurance coverage of pollution damages based on
Missouri law. In NEPACCO, supra at 5, the Eighth Circuit
Court of Appeals held that claims for remediation of a polluted
site were not "damages" covered by comprehensive general
liability insurance policies. See also Aetna Cas. & Surety Co.
v. General Dynamics Corp., 968 F.2d 707 (8th Cir. 1992)
(pollution exclusion contains a temporal component under
Missouri law).
IRE oo Ral alte 5 aE
ee Chet ait A. GR AAU ee, AA RNS Min De ea
property damage to third persons. The court failed to
mention Tonka’s evidence that it had always used a still
to remove TCE, that it was not aware that Tonka’s waste
contained TCE, and that it had no knowledge that
Tonka’s waste disposal method was likely to cause
damage to third parties. Finally, the court, in a footnote,
indicated that certification was not necessary because "the
issues of Minnesota law are clear." A-26, n.4.
IV. THE COURT OF APPEALS’ DECISION
Stressing that Tonka was "responsible" for the
presence of TCE and other solvents in the groundwater,
the Court of Appeals affirmed the trial court’s entry of
summary judgment. It held that Tonka knew or should
have known that waste deposited on the site contained
TCE. The appellate court did not mention, much less
distinguish or discredit, Tonka’s evidence on the material
facts. Tonka submitted evidence:
(1) disputing the accuracy of testimony that alleged
site disposal occurred in the 1960s and later;° and
(2) demonstrating that Tonka’s employees in the
1950s, at the time of the disposal, reasonably
“Although not mentioned in the context of the occurrence
issue, the court cited testimony regarding the disposal of
materials in the 1960s and later. A-8. The court disregarded
the contradictory evidence Tonka submitted apparently
crediting two witnesses’ testimony submitted by the Insurers,
and utterly disregarding the testimony of five Tonka witnesses.
9
believed Tonka’s waste did not contain TCE. (See
note 4, supra).
This evidence created a fact issue as to Tonka’s
knowledge that its waste contained TCE.’ The court not
only failed to mention Tonka’s evidence, it appeared to
deny that Tonka had even submitted it. A-9.
The court also held that because Tonka allegedly knew
that there was a substantial probability that TCE was a
"harmful substance," Tonka also “knew or should have
known that there was a substantial probability that its on-
site dumping of liquid wastes containing TCE and other
solvents would cause property damage.” A-9.
Therefore, the court held, the damage was "expected" as
a matter of law." /d.
This inference of knowledge contradicted Tonka’s
evidence that demonstrated that it had no knowledge in
the 1950s that disposal of its waste would harm third
party property, as well as a decision of another circuit
court. In Smith v. Hughes Aircraft Co., 10 F.3d 1448
The court's conclusion also contradicts the Minnesota
Court of Appeals’ decision in Woyke v. Tonka Corp, 420
N.W.2d 624, 628 (Minn. Ct. App. 1988) (affirming judgment
NOV in favor of Tonka based on lack of proof of knowledge,
either actual or constructive, that Tonka’s still bottoms
contained TCE).
‘Tonka also asked the Eighth Circuit to certify the case to
the Minnesota Supreme Court. Like the district court, it
refused.
10
Ne NAD PM ae a
(9th Cir. 1993), the circuit court reversed a summary
judgment for the insurers because in reaching the court’s
finding that the insured “expected or intended injuries
caused by TCE, the district court relied on evidence that
TCE was toxic in some concentration if ingested." Jd. at
1455. The Ninth Circuit pointed out that:
[U)ntil recently, exposure to moderate amounts of
TCE was not considered harmful. TCE was
commonly used as an anesthetic and disinfectant. It
was also used to extract hops, decaffeinate coffee, and
to prepare fish meal. It was not until 1977 that the
FDA first proposed banning TCE as a food additive.
The first recommended, non-binding TCE standard for
drinking water was not promulgated by the EPA until
1979.
Id. Thus, the court concluded, it could not hold that the
insured “knew or believed its [disposal of TCE] was
substantially certain or highly likely to result” in harm to
third parties. Jd. In contrast, the court in this case
based its holding on Tonka’s knowledge that TCE should
not be breathed. See A-34.
AS to Causation, the court held, without any scientific
evidence, that spills and leaks “could not plausibly
account” for the high concentrations of TCE in the soil
and groundwater. A-9. The court ignored the evidence
Torka submitted to refute the inference that the site
disposal caused the contamination of the groundwater,
including:
1]
(1) an affidavit of its expert who opined that disposal
in the 1950s could not have caused the problem
for which Tonka was seeking coverage; and
(2) a report of an investigation of the site by another
engineer which concluded that the “alleged waste
disposal area is not significantly impacting
groundwater quality.”
In short, while there was no evidence in the record that
supported the court’s conclusion that occasional spills
could not have caused the contamination, there was
evidence in the record that demonstrated that purposeful
on-site waste disposal was not the cause.”
The only explanation for the court's failure to
consider, or even mention Tonka’s evidence is that it
applied an erroneous standard of review. The court’s
opinion focused exclusively on whether evidence existed
which would support a judgment. Such a legal standard
is appropriate only for review of a post-trial judgment
which assumes that the district court was the fact-finder.
*The court seems to have adopted a requirement that
Tonka need establish the cause of the contamination in order
to defeat the inference that it was caused by its 1950s disposal
practices. The policies do not require Tonka to prove the
cause of an accident in order to obtain coverage. See
Hauenstein v. St. Paul-Mercury Indem. Co., 65 N.W.2d 122
(Minn. 1954) (accident is damage from known or unknown
cause).
12
FN ne NTN
a
‘
This Court should grant certiorari to review the appellate
court's decision, clarify and simplify the standards for
summary judgment and articulate the considerations
which should guide courts in deciding whether to certify
an issue of state law to the state’s highest court.
REASONS FOR GRANTING THE WRIT
I. THIS COURT SHOULD CLARIFY THE
STANDARDS FOR GRANTING SUMMARY
JUDGMENT.
This case raises serious issues involving the
interpretation of the Federal Rules of Civil Procedure.
: Because this Court has a duty of supervision over the
federal judiciary, it is important that the Court provide
; the lower courts with guidance as to the appropriate use
of summary judgment to dispose of cases at the pretrial
} stage. The courts in this case confused the applicable
standards and granted summary judgment in the face of
numerous material factual issues. Thus, not only did
these courts depart from the accepted and usual course of
i judicial proceedings, calling for an exercise of this
: Court’s power of supervision (see Sup. Ct. R. 10.1(a))
but the decisions below constitute a misapplication of the
federal rules. See Sup. Ct. R. 10.1(c).
In addition, this abuse of the summary judgment
procedure denied Tonka its constitutional right to a jury
trial. Summary judgment was never intended as a
substitute for trial. Yet the court’s confusion regarding
the standard for summary judgment in this case reflects
a growing trend which has dramatically reduced the
13
scope of the substantive constitutional right to a jury
trial. This Court has traditionally held that "[t}he
criterion governing the exercise of our discretion in
granting or denying certiorari is not who loses below but
whether the jury function in passing on disputed
questions of fact and in drawing inferences from proven
fact has been respected." Wilkerson v. McCarthy, 336
U.S. 53, 70-71 (1949). Thus, the Court has jealously
guarded inroads on the right to a jury trial. See, e.g.,
Dick v. New York Life Ins. Co., 359 U.S. 437 (1959);
Gibson v. Phillips Petroleum Co., 352 U.S. 874 (1956).
The serious departure in this case from the process
justice requires warrants this Court’s review.
A. Where The Movant Bears The Burden Of
Persuasion, The Court Must Determine
Whether It Has Established Its Claim With
Undisputed Evidence.
The moving party bears the initial burden of proving
that summary judgment is appropriate. See Celotex
Corp. v. Catrett, 477 U.S. 317 (1986). A district court,
in deciding whether the moving party has met this
burden, must determine which party bears the ultimate
burden of persuasion at trial. Jd. at 331 (Brennan, J.,
dissenting.) Justice Brennan’s dissenting opinion in
Celotex suggests that if the party moving for summary
judgment also bears the burden of proof, it must support
its motion with undisputed material evidence on each
element of its claim. Id.
In this case, the Insurers, the moving parties, bore the
burden of persuasion to prove that the liability for which
14
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i
s
:
{
a
i]
4
Tonka sought coverage was excluded by the policies and
they had no duty to defend Tonka. Prahm y. Rupp
Constr. Co., 277 N.W.2d 389 (Minn. 1979). In
determining whether the Insurers met their burden, the
court was required to construe the policy liberally in
favor of the insured. Lanoue v. Fireman’s Fund Am.
Ins. Co., 278 N.W.2d 49 (Minn. 1979).
If the movant successfully establishes a prima facie
case, the burden then shifts to the non-movant to show
that there is a genuine issue of fact for trial. Augustine v.
GAF Corp., 971 F.2d 129, 132 (8th Cir. 1992). The
district court must then examine the evidence in the light
most favorable to the non-movant, giving that party the
benefit of every inference and resolving all factual
disputes against the movant. United States v. Diebold,
Inc., 369 U.S. 654 (1962). The district court must base
its determination regarding the presence or absence of a
material issue of fact on evidence that will be admissible
at trial. Financial Timing Publications, Inc. vy.
Compugraphic Corp., 893 F.2d 936, 942 (8th Cir.
1990). Only if no reasonable jury could find for the non-
mevant on the evidence presented should the movant be
entitled to prevail without a full trial on the issues. As
shown below, neither the trial court nor the appellate
court made any effort to evaluate the evidence under
these standards.
B. In This Case, The Summary Judgment
Standards Were Improperly Applied.
The lower courts improperly entered summary
judgment against Tonka in this case as a result of a
15
fundamental misunderstanding of the requirements of
Rule 56. The crucial material fact issue that the Insurers
were required to establish before the court could
conclude that they owed Tonka no duty to defend under
the liability policies was that Tonka knew or should have
known at the time of the disposal that disposal of liquid
waste on the ground was highly certain to cause the
third-party property damage for which it sought
coverage. See Continental W. Ins. Co. v. Toal, 244
N.W.2d 121, 125 (Minn. 1976). However, summary
judgment is particularly ill suited to resolve issues of
intent, knowledge, or motivation. James V. Chin, Clark
v. Coats & Clark, Inc.: The Eleventh Circuit Clarifies the
Initial Burden in a Motion for Summary Judgment, 26
Ga. L. Rev. 1009, 1021 (1992). These were the precise
issues in this case. See James Graham Brown Found.,
Inc. v. St. Paul Fire & Marine Ins. Co., 814 S.W.2d
273, 280-81 (Ky. 1991) (state of mind questions raised
by intended/expected clause may not be resolved on
summary judgment). Recognizing the factual nature of
this inquiry in another case involving coverage of
pollution damages, the Minnesota Court of Appeals in
Sylvester Bros. Dev. Co. v. Great Central Ins. Co., 480
N.W.2d 368 (Minn. Ct. App. 1992), held that it is a
question of fact whether an insured should have known
that pollution was likely to result from its activities. 480
N.W.2d at 373.
The district court showed no hesitancy, however, in
resolving these issues. The court began without even
identifying the summary judgment standards it was to
apply, other than the requirement that facts and
inferences be construed in favor of the non-moving party.
16
RE NNN NPRM ae an ei he le
A-24. The court did recognize that the Insurers bore the
burden of persuasion, (A-25), but rather than determine
from the evidence whether any issues of material fact
existed under the relevant evidentiary standard, (of.
Celotex Corp. v. Catrett, 477 U.S. 317 (1986)), the court
applied a post-judgment analysis. Finding that the
Insurers’ claims were supported by “substantial
evidence," the court simply ignored Tonka’s contrary
evidence and entered judgment against Tonka. The
district court erred because it failed to consider Tonka’s
evidence, failed to resolve factual disputes in favor of
Tonka, and failed to draw inferences from those facts in
favor of Tonka.
Like the district court, the Eighth Circuit did not
articulate the summary judgment standard or how it
applied in this case. It also reiterated the very same
factual errors made by the district court. Like that court,
it omitted any discussion of Tonka’s evidence and why
that evidence allegedly created no issues of fact. For
example, the court states that Tonka "failed to present
hard evidence" to support its claim that Tonka did not
know that its waste contained TCE. A-9. In fact, Tonka
had introduced "hard evidence" on this point.” See
supra, at note 4. At a minimum, this evidence created
a question of fact as to whether Tonka’s conduct
“Indeed, because the Insurers bore the burden of proof,
summary judgment should not have been granted unless Tonka
had conceded the facts upon which the Insurers’ motion was
based since a jury could well have disbelieved the Insurers’
evidence. See Jack H. Friedenthal, Cases on Summary
Judgment: Has There Been a Material Change in Standards?
63 Notre Dame L. Rev. 770, 781 (1988).
17
constituted an attempt to “consciously control the risks
covered by the policy." See Bitwminous Cas. Corp. v.
Bartlett, 240 N.W.2d 310, 313 (Minn. 1976); Sylvester
Bros., supra.
The district court’s eagerness to grant summary
judgment and the Court of Appeals’ rush to affirm reflect
a fundamental misunderstanding of the summary
judgment procedure. On each point on which the court
ruled in this case, Tonka had submitted admissible
evidence. This evidence was ignored by the court.
This decision not only harms Tonka by denying Tonka
its constitutional rights, but it also reflects a judicial
willingness, perhaps encouraged by a perceived shift by
this Court to a liberal interpretation of Rule 56, to grant
summary judgment in inappropriate cases, and to
preclude effective review by simply avoiding reference to
the legal standards or the evidence."' This Court should
accept review to reaffirm its adherence to the
One commentator suggests that as recently as 1979, the
Court had remarked that the summary judgment procedure was
highly inappropriate to determine fact-intensive issues such as
the state of mind requirements which exist in this case. Nancy
Levit, The Caseload Conundrum, Constitutional Restraint and
the Manipulation of Jurisdiction, 64 Notre Dame L. Rev. 32 Ss
327 (1989). Since 1986, claims the author, the Court has
delineated a substantially new attitude toward summary
judgment. Jd. Jeffrey W. Stempel, A Distorted Mirror: The
Supreme Court’s Shimmering View of Summary Judgment,
Directed Verdict and the Adjudicative Process, 49 Ohio St.
L.J. 95, 159 (1988) (The observed and coming change in
summary judgment jurisprudence bodes ill for certain classes
of litigants, persons interested in the accuracy of judicial
decision making, and the system as a whole.).
18
—
constitutional principles which must guide the lower
courts, no matter how crowded their dockets. Review by
this Court is warranted.
C. This Decision Will Have A Negative Impact On
Both The Federal Judicial System And The
Individual Litigant.
The Circuit Court’s decision in this case will adversely
affect not only the many insureds who may be wrongfully
deprived of insurance coverage for unintended and
unexpected pollution damages until the Minnesota
Supreme Court resolves the relevant legal issues, but also
every plaintiff. This Court should grant Tonka’s petition
for certiorari in order to simplify the applicable standards
for granting motions for summary judgment and rein
back the courts from using the summary judgment
procedure to clear their dockets of cases that cannot
properly be resolved on a summary basis.”
Nearly a decade ago, this Court issued three opinions
which considered the standard for granting summary
judgment. See Matsushita Elec. Indus. Co. y. Zenith
Radio Corp., 475 U.S. 574 (1986); Anderson vy. Liberty
“One author describes the lower courts’ reaction to
Celotex, as a backlash or “anti-plaintiff counter-revolution."
See generally, D. Michael Risinger, Another Step in the
Counter-Revolution: a Summary Judgment on the Supreme
Court’s New Approach to Summary Judgment, 54 Brook. L.
Rev. 35 (1988); See also Stempel, supra, at 161 (By making
summary judgment easier to obtain, the Court implicitly
bestowed a political favor (and greater judicial power). . . on
society’s "haves.").
19
Lobby, Inc., 477 U.S. 242 (1986); Celotex v. Catrett,
477 U.S. 317 (1986). In so doing, the Court breathed
new life into the summary judgment procedure for
disposition of cases. Although the Court denied that it
was changing the procedure, the result has been a
dramatic increase in the use of summary judgment to
dispose of cases.
Unfortunately, the pendulum has swung so far in favor
of the pretrial disposition of cases that misapplication of
the new summary judgment standards has increasingly
deprived litigants such as Tonka of tkeir constitutional
right to a trial on disputed fact issues and deprived them
of their rights under standards of proof dictated by state
law."’ What has resulted is a flurry of ad hoc decisions
and dangerous unpredictability. See Jeffrey W. Stempel,
A Distorted Mirror: The Supreme Court’s Shimmering
View of Summary Judgment, Directed Verdict and the
Adjudicative Process, 49 Ohio St. L.J. 95, 107 (1988).
"In dissent, in Anderson v. Liberty Lobby, Inc., 477 U.S.
242 (1986), Justice Brennan predicted that the Anderson
procedure would undermine litigants’ constitutional right to a
jury trial. Litigants must now engage in a full-blown paper
trial on the merits. /d. at 261. Similarly, just as Justice
Scalia feared in the lower court decision in Anderson, courts
have interpreted the increased proof requirement at this stage
to require the trial court to evaluate the weight of the facts.
Liberty Lobby, Inc. v. Anderson, 746 F.2d 1563, 1570 (D.C.
Cir. 1984). Every time summary judgment is granted where,
after an actual trial, directed verdict could not have been,
however, there has been a violation of the constitutional right
to a jury trial because of a misprediction of the trial record.
D. Michael Risinger, Another Step in the Counter-Revolution:
A Summary Judgment on the Supreme Court’s New Approach
to Summary Judgment, 54 Brook. L. Rev. 31, 41 (1988).
20
4
.
4
7
5
J
4
aA
The trilogy of cases decided by this Court eight years
ago also left in question: (1) the standard to be applied in
cases where the movant bears the burden of proof on the
Substantive issues;"* (2) where both parties submit
evidence, whether the court may weigh the evidence in
deciding whether judgment should be entered:"* and (3)
what quality of evidence will be considered in supporting
“Only Justice Brennan in his dissenting opinion remarked
upon the proper standard to be applied in such a case. The
articulated standards apparently involve the court in an
evaluation of the quantity and quality of the evidence unless
the non-movant fails to make any effort to respond to the
motion.
“As pointed out in James V. Chin, Clark v. Coats &
Clark, Inc.: The Eleventh Circuit Clarifies the Initial Burden
in a Motion for Summary Judgment, 26 Ga. L. Rev. 1009.
1020 (1992), the courts have also misunderstood Celotex with
regard to the level of proof required to meet the initial burden:
[Jjudges and commentators have widely interpreted
[Celotex) as an indication of the Supreme Court’s desire to
liberalize the use of Rule 56. This perception is one of the
problems with Celotex. The case seems to allow the
moving party to meet its initial burden with a lesser
Showing than required in Adickes. Lower federal courts
have uniformly regarded the movant’s burden under Celotex
as Satisfied by even a meager showing. These same courts,
however, mandate that the non-moving party shoulder a
heavy burden to survive summary judgment. Thus,
summary judgment has evolved from its Originally intended
role as guarantor of the existence of material issues for trial
into a procedure to “assess the plaintiff's likelihood of
prevailing at trial."
Id. at 1020-21.
21
and opposing summary judgment."* This case squarely
pres ts all three issues.
“In this case, the court based its judgment on inadmissible
evidence. For example, many of its factual determinations
were based on its interpretation of an unauthenticated,
unsworn, hearsay memorandum of Tonka’s counsel
summarizing witness interviews. This memorandum would not
have been admissable to prove the truth of the hearsay
Statements it contained. The court should not be permitted to
base summary judgment on inadmissible evidence presented by
the moving party. See Melissa Nelken, One Step Forward,
Two Steps Back: Summary Judgment After Celotex, 40
Hastings L.J. 53, 81-82 (1988).
The court also excluded the affidavit of Tonka’s
hydrogeologist in which the expert opined that the on-site
disposal of materials in the 1950s had not caused the
contamination. As noted above, the determination of the
source of the contamination was a critical issue. The district
court refused to consider the opinion and substituted its own
inference as to the source of contamination. Because the
expert was qualified and did disclose the factual basis for his
opinions it was error for the court not to consider them. See
Bulthuis v. Rexall Corp., 789 F.2d 1315 (9th Cir. 1985):
Monks v. General Elec. Co., 919 F.2d 1189 (6th Cir. 1990).
Moreover, Tonka should have been permitted to supply
missing foundation before the opinion was simply stricken
because Celotex appears to sanction the use of inadmissible
evidence in opposition to a motion for summary judgment if
the evidence can be made admissible at trial. See Celotex, 477
U.S. at 323. The circuit courts are in disagreement regarding
the import of the Celotex decision on the admissibility of such
evidence. See Offshore Aviation v. Transcon Lines, Inc., 831
F.2d 1013, 1015 n.1 (11th Cir. 1987) (requirement that
evidence be admissible to defeat summary judgment no longer
valid after Celotex); Bushman v. Halm, 798 F.2d 651, 653 (3d
Cir. 1986) (deciding that a letter-report from non-moving
party's physician should not have been ignored by the court).
But see Canada v. Blain’s Helicopters, Inc. , 831 F.2d 920 (9th
Cir. 1987).
22
The trial court improperly denied Tonka its
constitutional right to a jury trial by resolving fact issues
and weighing the evidence. The Court of Appeals
compounded this error by failing to apply the proper
Standards upon review of the entry of summary
judgment. Thus, this case reflects what one author has
described as an exercise of "discretionary license" to
resolve the merits of the case. Martin Louis,
Intercepting and Discouraging Doubtful Litigation: A
Golden Anniversary View of Pleading, Summary
Judgment And Rule 1] Sanctions under the Federal Rules
of Civil Procedure, 67 N.C.L. Rev. 1023, 1036 (1989).
The author notes:
Such flexibility, which amounts to a discretionary
license or its functional equivalent, is sometimes
desirable, but here it involves judicial power to
resolve the merits. Without more appellate guidance
and supervision, it could lead to ad hoc, unjust
dismissals, as well as to the possibility of judicial
overcorrection and backlash. Indeed, many recent
opinions granting motions to dismiss or for summary
judgment are dangerously slanted in the direction of
aggressive interception, ignore or fail to mention the
countervailing considerations that former! y commanded
the opposite result, and in some cases are alarmingly
redolent of supposedly repudiated Code rhetoric. For
these reasons, balanced, but unexplicated, doctrine that
fails to educate or control lower court judges may
create as many problems as it solves.
23
Id. All of the evils which result from exercising such
license are present here: inaccurate conclusions as to the
facts based on a superficial or incomplete review of the
paper record, a failure to permit the jury to resolve
factual issues and ultimately, an erroneous resolution of
the legal issues. This Court should grant certiorari to
provide guidance to the lower courts, clarifying and
resolving the issues which have arisen in the eight years
since Celotex was decided.
Il. THIS COURT SHOULD PROVIDE GUIDANCE
TO THE LOWER COURTS REGARDING
CERTIFICATION OF ISSUES OF STATE
PUBLIC POLICY TO THE STATE’S HIGHEST
COURT.
This case presents issues of compelling interest to the
State of Minnesota regarding the clean-up of its damaged
water resources. Without standards to guide it, the
district court failed to certify’’ these public policy issues
to Minnesota’s highest court. Federalism principles
require review by this Court to correct the lower court's
error and provide standards for future cases.
This Court has noted that the federal courts can
resolve issues about state law by certifying cases for
"The Minnesota Legislature has adopted the Uniform
Certification of Questions of Law Act (Minn. Stat. § 480.061)
which permits the state supreme court to answer questions
"which may be dispositive of the cause then pending in the
Certifying Court" and as to which there is no controlling state
precedent.
24
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decision to the state court itself. Salve Regina College v.
Russell, 499 U.S. 225, n.4 (1991). Such a procedure in
the long run saves time, energy and resources and helps
build a cooperative judicial federalism. Lehman Bros. v.
Schein, 416 U.S. 386, 391 (1974). Despite this Court’s
encouragement of the use of the certification procedure,
there is no case law establishing parameters for the
exercise of the courts’ discretion, and its exercise is
effectively without bounds. As a result, cases are
certified to the state courts on a haphazard basis and, as
in this case, the court may refuse to certify in a case
raising significant issues of state public policy properly
resolved by a state’s highest court.
In rationalizing its refusal to certify these issues in this
case, the district court characterized the law as "clear."
However, except when this case was before it, the
Minnesota Supreme Court had not decided a case
involving insurance coverage of pollution liability. Other
courts have recognized that the “seemingly simple
question" of how the policy language should be
interpreted has spawned a profusion of litigation.
Claussen v. Aetna Cas. & Sur. Co., 380 S.E.2d 686, 688
(Ga. 1989). Thus, when the district and Eighth Circuit
courts interpreted the qualified pollution exclusion in
some of Tonka’s insurance policies, the courts were
unable to cite a single Minnesota Supreme Court
decision. Neither court offered any prediction of the
Minnesota Supreme Court’s position on the issue. In the
absence of controlling Minnesota case law, and in a case
where the legal issues involved Minnesota public policy,
25
the court should have certified the issues to the
Minnesota Supreme Court."
As a result of the district court’s refusal to certify,
Minnesota public policy issues were decided by the
federal courts. As demonstrated by its decision in
NEPACCO, the Eighth Circuit’s perspective on these
issues is directly contrary to the Minnesota Supreme
Court’s approach as articulated in 3M, which favors
insureds such as Tonka on the environmental coverage
issues. Predictably, upon its review of the case, the
Eighth Circuit decided all of the legal issues in this case
adversely to Tonka without even citing 3M (which was
also the law of this case). The failure of the federal
"To the extent that the failure to certify in this case is
deemed proper, the court’s failure to analyze Minnesota law on
the legal issues was a violation of Erie R.R. Co. v. Tompkins,
304 U.S. 64 (1938). Clearly, the Eighth Circuit decision in
Aetna Cas. & Sur. Co. v. General Dynamics Corp., supra at
n.5, construing Missouri law, on which the district court relied
had no precedential value and should not have been
considered. The court’s heavy reliance on intermediate
Minnesota court decisions gave more weight to those decisions
than would the Minnesota Supreme Court. The Minnesota
Court of Appeals is an error-correcting court. Matter of
Welfare of M.D.O., 462 N.W.2d 370 (Minn. 1990).
Moreover, neither court cited another Minnesota Court of
Appeals’ decision construing the qualified pollution exclusion
in favor of the insured. See Grinnell Mut. Reins. Co. v.
Wasmuth, 432 N.W.2d 495 (Minn. Ct. App. 1988). While the
federal court should consider intermediate state court decisions
in attempting to predict how the highest state court would
decide an issue, it should not rely solely on them, when there
exist other persuasive data that the highest state court would
decide otherwise. Commissioner v. Estate of Bosch, 387 U.S.
456, 465 (1967).
26
court to certify this case has resulted in a faulty
pronouncement of Minnesota law and policy adversely
affecting Minnesota citizens.
A. Federalism Principles Require State Courts To
Formulate State Policy.
Federalism principles prohibit the federal courts from
engaging in state lawmaking in the guise of "interpreting"
State law. When a decision in a diversity case involves
the application of unsettled state law to public policy
issues, the federal court should be required to certify the
issue to the state court because a federal judge’s
prediction of state law in the absence of a dispositive
holding of the state supreme court verges on the
lawmaking function of the state court. Delores K.
Sloviter, Diversity Jurisdiction Through the Lens of
Federalism, 78 Va. L. Rev. 1663, 1682 (1992). The
law that results is "not found, but made." Benjamin J.
Cordozo, The Nature of the Judicial Process 113, 115
(1921).
Despite the best efforts of the federal courts to predict
the future thinking of state supreme courts on the basis of
available data, they guess wrong On many important
issues. Sloviter, supra, at 1679. Judge Sloviter notes:
Until corrected by the state supreme court, such
incorrect predictions inevitably skew the decisions of
persons and businesses who rely on them and
inequitably affect the losing federal litigant who cannot
appeal the decision to the state supreme court; they
may even mislead lower state courts that may be
27
inclined to accept federal predictions as applicable
precedent.
Id. at 1681. Indeed, some evidence suggests that federal
courts have shown a preference for citing federal
decisions on state law instead of state decisions at rates
approaching pre-Erie levels. Jd. This case reflects this
trend.
The unlimited discretion which federal judges employ
without any guidance on certification in diversity cases,
“appears irreconcilable with the restraint [the courts] have
been cautioned to exercise in the abstention cases when
State law issues arise." Jd. at 1682-83. See also Burford
v. Sun Oil Co., 319 U.S. 315, 327 (1943) (“inevitable
product” of ruling on state law issue would be "[dJelay,
misunderstanding of local law, and needless federal
conflict with the state policy"). Thus, in the past this
Court has recognized that federalism suffers when federal
judges, not selected under the state system and not
answerable to its constituency, make state law. The
effect of the incursion of federal judges into what are
state policy decisions in civil cases is significant because
they involve areas of law that define one citizen’s rights
and obligations vis-a-vis another's, a function
traditionally associated with state sovereignty. D.
Sloviter, supra, at 1682. In this case, what has been
decided also involves the rights of the State itself. In
cases requiring the application of state public policy to
unsettled questions of law, certification where available,
is not only appropriate, but required.
28
B. The Courts’ Refusal To Certify Denied Tonka
The Application Of Minnesota Public Policy To
The Issues.
The lower courts in this case decided that Tonka
would be presumed to have intended or expected injury
to third parties from the discharge of TCE, regardless of
its actual knowledge of the danger of such disposal to
third parties. This inference defeated insurance coverage
for the resulting damage. The courts’ decision rested on
a value judgment regarding who should bear
responsibility for the remediation of polluted sites. This
is a Minnesota public policy question which should be
made only by the Minnesota Supreme Court. See
Hatfield v. Bishop Clarkson Memorial Hosp., 701 F.2d
1266, 1267 (8th Cir. 1983).
The interest of the State of Minnesota in the outcome
of this litigation is direct and substantial. It is the
environment of Minnesota that was damaged by the
contamination at issue. It is Minnesota that will for
years to come have to wrestle with the problems
associated with the clean-up of the site and all other such
sites. The court's ruling in this case will directly affect
the speed and effectiveness of the Clean-up of these
Minnesota sites. Only a Minnesota court should
determine who is responsible to pay for the clean-up and
whether it is in the best interests of the State and its
citizens to enforce those citizens’ rights to insurance
coverage for pollution remediation costs.
Certification of the question would have permitted the
Minnesota Supreme Court to formulate and apply
29
Minnesota public policy. Certification is particularly
important in this case where the impact of the decision
will affect thousands of Minnesota citizens, including
policyholders, land owners, taxpayers, insurers,
government agencies and the State itself.
This Court should grant Tonka’s petition for certiorari
in order to clarify its adherence to principles of
federalism and provide guidance to lower courts when
they are confronted with state court policy questions.
CONCLUSION
Tonka respectfully requests that its petition for a writ
of certiorari be granted.
Respectfully submitted,
David F. Herr
(Counsel of Record)
Mary R. Vasaly
MASLON EDELMAN BORMAN & BRAND
3300 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402-4140
(612) 672-8200
ATTORNEYS FOR PETITIONER,
TONKA CORPORATION
30
‘ ial a Satine
st La Nl eC SOE I ith Be lbs
A i at a al lta ll ee are ee
INDEX TO APPENDIX
1) Bituminous Casualty Corp. v. Tonka,
9 F.3d 51 (8th Cir. 1993)
2) Memorandum Opinion and Order
of District Court for District
of Minnesota filed August 24,
1992
3) Order dated December 21, 1993
denying Petition for Rehearing
4) Minnesota Uniform Certification
of Questions of Law Act, Minn.
Stat. §480.061
5) Federal Rule of Civil
Procedure 56
A-2
A-1]
A-39
A-40
A-43
United States Court of Appeals
FOR THE EIGHTH CIRCUIT
No. 92-3187
Bituminous Casualty Corporation,
an Illinois corporation,
Plaintiff - Appellee,
v.
Tonka Corporation, a APPEAL FROM THE
Minnesota corporation, UNITED STATES
DISTRICT COURT
Defendant - Appellant,FOR THE DISTRICT
OF MINNESOTA.
V.
Bituminous Casualty Corporation,
The Travelers Insurance Company,
North River Insurance Company,
Great American Insurance
Company, Industrial Indemnity
Company, Zurich Insurance
Company, United States Fire
Insurance Company, Mission
National Insurance Company,
Twin City Fire Insurance Company,
A-2
Counter-Defendants - Appellees.
Submitted: May 10, 1993
Filed: November 12, 1993
Before BEAM, LOKEN, and MORRIS SHEPPARD
ARNOLD, Circuit Judges.
LOKEN, Circuit Judge.
A-3
Tonka Corporation ("Tonka") appeals the district
court’s' grant of summary judgment declaring that
Bituminous Casualty Corporation and several other
insurance companies (collectively, “the Insurers") have
no duty to defend or indemnify Tonka for its costs
incurred in a proceeding initiated by the Minnesota
Pollution Control Agency ("MPCA") to remedy
groundwater contamination at Tonka’s facility in Mound,
Minnesota. The district court held that this
contamination is not the result of an "occurrence" within
the meaning of the Insurers’ comprehensive general
liability ("CGL") policies, and also is excluded from
coverage by the pollution exclusion contained in many of
the policies. We affirm.
a
Tonka manufactured metal toys at the Mound facility
from 1955 until 1984. Prior to painting the toys, Tonka
removed oil and grease by passing them through a vapor
bath of trichloroethylene (TCE), a common solvent. This
process generated a liquid waste of TCE and oil. After
the 1950’s, Tonka recovered the TCE in a still and
reused it, leaving residue oil and stillbottom sludge that
was stored in 55-gallon drums for disposal.
In 1985, an engineering study revealed that the
groundwater surrounding Tonka’s plant contains
' The HONORABLE DIANA E. MURPHY, Chief Judge
of the United States District Court for the District of
Minnesota.
A-4
significant concentrations of TCE and other solvents.
Acting under the Minnesota Superfund Act, Minn. Stat.
Ch. 115B, the MPCA then issued a formal request that
Tonka define and implement a remedial action plan to
protect the environment from further releases of these
hazardous substances. Tonka notified the Insurers and
requested that they defend Tonka in this administrative
enforcement proceeding. Bituminous and Travelers
defended Tonka for over a year, but then commenced this
action seeking a declaratory judgment that they have no
duty to defend or indemnify under their CGL policies.
Tonka counterclaimed for a declaration that each of the
Insurers must defend and indemnify the company under
those policies.
The CGL policies provide coverage for damages
Tonka is legally obligated to pay because of property
damage caused by an "occurrence," which is defined as
"an accident, including injurious exposure to conditions,
which results . . . in bodily injury or property damage
neither expected or intended from the standpoint of the
insured." Most of the policies issued after 1972 contain
a "pollution exclusion," which bars coverage for property
damage arising out of the discharge of contaminants or
pollutants unless the discharge was “sudden and
accidental."
The district court granted the Insurers’ motion for
summary judgment, concluding that the groundwater
contamination resulted from Tonka’s “ongoing and
routine disposal of TCE on its site," that Tonka "knew or
Should have known that there was a substantial
A-5
probability that this release of TCE would cause property
damage," and that the resulting damage was therefore not
caused by an occurrence within the meaning of the
Insurers’ CGL policies. In addition, the court held that
coverage is barred under those policies that contain a
pollution exclusion because "there was nothing abrupt
about the disposal of TCE at the Tonka site.”
Il.
On appeal, Tonka argues that the district court erred
both in granting summary judgment on the fact-intensive
issue Of whether the property damage in question was
caused by an occurrence, and in interpreting the pollution
exclusion. We review the district court’s decision to
grant summary judgment and its interpretation of state
law de novo. See Salve Regina College v. Russell, 111
S. Ct. 1217 (1991); Gumersell_v. Director, Fed.
Emergency Mgt. Agency, 950 F.2d 550, 553 (8th Cir.
1991).
With regard to the pollution exclusion, we have
recently held that in order to qualify for the “sudden and
accidental" exception to that exclusion under Minnesota
law the insured must show that its release of a
contaminant was abrupt. See Bureau of Engraving v.
Federal Ins. Co., No. 92-2910, slip op. at 5 (8th Cir.
Oct. 1, 1993). After careful review of the record, we
conclude that the district court correctly held that the
pollution exclusion applies to Tonka’s release of TCE and
other solvents into the groundwater at its plant, and that
Tonka’s ongoing and routine on-site disposal of these
A-6
wastes was not "sudden" as a matter of law. See
, 303 N.W.2d
793, 797 (Minn. App. 1993); iv. W
Cas, & Sur. Co., No. C3-93-672 (Minn. App. Oct. 5,
1993). Accordingly, the district court properly granted
summary judgment declaring that Tonka’s ciaims are not
covered under any policy containing the pollution
exclusion.
However, not all the policies at issue contain a
pollution exclusion. Therefore, like the district court, we
must also address the "occurrence" issue. The question
is whether the contamination of the groundwater under
Tonka’s plant resulted in property damage “neither
expected nor intended from the standpoint of the
insured." This is an objective standard; it turns upon
whether the damage “should have been expected" by the
insured. Bi , 240 N.W.2d
310, 313 (Minn. 1976). Under Minnesota law, "the
word "expected’ denotes that the actor knew or should
have known that there was a substantial probability that
certain consequences will result from his actions."
Auto-Owners Ins. Co. v. Jensen, 667 F.2d 714, 720 (8th
Cir. 1981). This standard "involves a higher degree of
certainty than reasonable foreseeability." Sylvester Bros.
Vv Vv n , 480 N.W.2d 368,
372 (Minn. App. 1992). See also W.
Ins. v. Toal, 244 N.W.2d 121, 125 n.3 (Minn. 1976).
The Insurers presented substantial evidence that Tonka
is responsible for the presence of TCE and other solvents
in the groundwater under its plant. Tonka routinely
A-7
dumped liquid wastes on site during the 1950's. Defore
installed a still to recover TCE. In later reports @ (he
environmental agencies, Tonka described these as
"degreaser oils," “still-bottom sludges,” and “degreasing
solvents. Moreover, Tonka’s dumping of liquid wastes
on-site did not end upon installation of the sull. An
employee testified that he dumped barrels of liquid waste
in the Tonka parking lot in 1978 because it saved the
company $500 per barrel in disposal costs. Another
employee testified that he regularly dumped stillbottom
sludge and a mixture of TCE and water in the same
parking lot, practices that continued from the 1960's until
the plant was closed. Tonka knew or should have known
that these wastes contained TCE -- employees testified
that the barrels of stillbottom sludge smelled like TCE,
and Tonka later admitted to the EPA that samples of its
stillbottom sludge contained TCE. Throughout this
period, despite ‘fonka’s efforts to recover and reuse TCE,
its plant operations consumed hundreds of thousands of
gallons of the chemical each year.
The Insurers also presented evidence that Tonka knew
or should have known that dumping these liquid wastes
would likely cause property damage. Tonka’s employees
were well aware that exposure to TCE and other solvents
"could kill you." Two employees testified that Tonka’s
dumping killed trees on the site. Studies in the 1950's
and earlier reported hazards involved with TCE, and a
Tonka employee recalled receiving warnings from
management at that time to be very cautious with barrels
containing the chemical.
+t ee OE ee Ne Baa cee et fae
Tonka argues that there are genuine fact issues
concerning whether it knew the liquid wastes it dumped
on site contained TCE and whether the TCE
contamination might have been caused by accidental
spills. However, we agree with the district court that
Tonka failed to present hard evidence to support these
hypotheses. There was no evidence that Tonka ever
reported any accidents or spills to the MPCA or its
insurers, and several Tonka supervisors testified that they
were unaware of any TCE spills at the plant. The
isolated spills that Tonka was able to document could not
plausibly account for the high concentrations of TCE in
the soil and groundwater at the site.
Tonka also argues that there is a genuine fact issue an
to. whether it knew that TCE would harm the
environment. However, we think the summary judgment
record fully supports the district court’s resolution of this
issue:
The full effects of TCE were not documented, nor did
governmental regulations cover TCE, until some time
after Tonka’s on-site TCE disposal in the 1950’s. The
record establishes, however, that Tonka knew at the
time of its disposal that there was a substantial
probability TCE was a harmful substance.
In these circumstances, we agree with the district court
that Tonka knew or should have known that there was a
substantial probability that its on-site dumping of liquid
wastes containing TCE and other solvents would cause
property damage. Therefore, the damage that did result
A-9
was "expected" as a matter of Minnesota law, and there
was no covered “occurrence” under the Insurers’ policies.
See Farmers Union Oil Co, v, Mutual Serv. Ins. Co.,
422 N.W.2d 530, 533 (Minn. App. 1988) (no coverage
for damage to crops resulting from a known
misapplication of herbicide because the damage was
“expected"); Bartlett, 240 N.W.2d at 313-14 (no duty to
defend claim against contractor when the damage caused
was “highly expectable from his standpoint"); Sage Co.
v. Insurance Co, of No. Amer., 480 N.W.2d 695,
697-98 (Minn. App. 1992) (no duty to defend wrongful
termination claim because the termination was “expected,
intended, and designed"). Likewise, the Insurers have
no duty to defend Tonka in the MPCA proceeding --
"there is no duty on the part of the insurer to defend
‘when it is established by the insurer that the facts are
such that there is no coverage under the policy for any
resulting liability.’" State Farm Fire & Cas. Co, v.
Williams, 355 N.W.2d 421, 424-25 (Minn. 1984).
We have carefully considered Tonka’s other
contentions and find them to be without merit. The
judgment of the district court is affirmed.
A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS,
EIGHTH CIRCUIT.
A-10
Oe ee ae eee oe
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
FOURTH DIVISION
Civ. 4-87-392
Bituminous Casualty Corporation,
Plaintiff,
Vv.
Tonka Corporation,
Defendant and
Counterclaimant,
MEMORANDUM
v. OPINION AND ORDER
Bituminous Casualty Corporation,
Travelers Insurance Company,
North River Insurance Company,
Great American Insurance Company,
Industrial Indemnity Company,
Zurich Insurance Company, United
States Fire Insurance Company,
Fireman’s Fund Insurance Company,
Mission National Insurance Company,
and Twin City Fire Insurance
Company,
Additional Defendants
on Counterclaim.
Filed AUG 24 1992
Francis E. Dosal, Clerk
A-1]
Thomas E. Peterson, Esq., Peterson & Hektner, 8400
Normandale Lake Boulevard, Minneapolis, MN 55437,
appeared for plaintiff and counterclaim defendant.
Mary R. Vasaly, Esq., and Mallory K. Mullins, Esq.,
Maslon Edelman Borman & Brand, 3300 Norwest
Center, Minneapolis, MN 55402, appeared for defendant
and counterclaimant.
Sean E. Hade, Esq., Jardine Logan & O’Brien, 2100
Meritor Tower, St. Paul, MN 55101, appeared for
counterclaim defendant Twin City Fire Insurance
Company.
Paul G. Niemann, Esq., Moss & Barnett, 4800 Norwest
Center, Minneapolis, MN 55402, appeared for
counterclaim defendant Travelers Insurance Company.
Leon R. Erstad, Esq. and Robert Kelly, Esq., Erstad &
Riemer, 1000 Northland Plaza, 3800 West 80th Street,
Minneapolis, MN 55431, appeared for counterclaim
defendants North River Insurance Company,
United States Fire Insurance Company, and Industrial
Indemnity Company.
Donald A. Lane, Esq., Keating Muething & Klekamp,
1800 Provident Tower, One East 4th Street, Cincinnati,
OH 45202, and David N. Lutz, Esq., Bowman &
Brooke, 150 South Sth Street, Suite 2600. Minneapolis,
MN 55402, appeared for counterclaim defendant Great
American Insurance Company.
Edward D. Rickert, Esq., Pope & John, 311 South
Wacker Drive, Chicago, IL 60606, and Garrett E.
Mulrooney, Esq., Maun & Simon, 2300 World Trade
Center, 30 East 7th Street, St. Paul, MN 55101.
appeared for counterclaim defendant Zurich Insurance
Company.
Barbara A. Burke, Esg., Cousineau McGuire &
Anderson, 600 Travelers Express Tower, 1550 Utica
Avenue South, Minneapolis, MN 55416, appeared for
counterclaim defendant Mission National Insurance
Company.
A-13
Gay B. Urness, Esq., Mahoney Dougherty & Mahoney,
801 Park Avenue, Minneapolis, MN 55404, appeared for
counterclaim defendant Fireman’s Fund Insurance
Company.
This case involves issues of insurance coverage for
costs incurred related to environmental damage. As a
result of claims made by the Minnesota Pollution Control
Agency (MPCA), Tonka Corporation (Tonka) has paid
certain sums, and it seeks to hold its insurers responsible
for them and for future related costs. The insurers are
Bituminous Casualty Company, The Travelers Insurance
Company, North River Insurance Company, Great
American Insurance Company, Industrial Indemnity
Insurance Company, Zurich Insurance Company, United
States Fire Insurance Company, Fireman’s Fund
Insurance Company, Mission National Insurance
Company, and Twin City Fire Insurance Company
(collectively, "insurers”).
Bituminous Casualty Company commenced this action
seeking a declaratory judgment that it owes nothing on its
policies. Tonka counterclaimed for a declaration of
coverage, joining the other nine insurers as additional
defendants on the counterclaim. Now before the court is
the motion by the insurers for summary judgment on all
of the claims brought by Tonka, on the basis that the
various liability insurance policies provide no coverage
for the claims asserted against them.’
I.
Tonka manufactured metal and plastic toys at its main
facility in Mound, Minnesota, from 1955 until 1983.
The manufacturing process required that the toys be
degreased before they were painted. Tonka sprayed the
solvent trichloroethylene (TCE) on the toys to remove the
grease and oil. TCE is the primary pollutant involved in
this case. The TCE was delivered to Tonka in barrels
’The proposed order submitted by the insurers with their
motion would also grant summary judgment to plaintiff
Bituminous on all claims contained in its complaint, as well as
dismissing all of Tonka’s claims against the insurers. Tonka
does not dispute the scope of the proposed order, for the
claims are interrelated.
With their reply brief, the insurers moved for sanctions
against Tonka pursuant to Fed.R.Civ.P. 37 and to strike the
affidavit testimony of Tonka’s expert witness Gary Hokkanen.
The insurers also moved to shorten the time period under the
local rules so these motions could be heard on the same date
as their summary judgment motion. The court declined to
expedite hearing on these motions.
The motion for sanctions should be denied. This case has
involved a number of hotly contested discovery disputes. The
important point at this stage in the proceedings is that the
delayed discovery has been produced by Tonka and was
available to be considered in the motions now before the court.
Under all the circumstances, sanctions would not be
appropriate.
For reasons stated later, the motion to strike the affidavit
should now be dismissed as moot.
A-15
and was then pumped into a vat adjacent to the degreaser
machine.
After the toys were sprayed, the oil and TCE would
collect at the bottom of the degreaser. Tonka originally
removed this waste and stored it in 55 gallon drums. In
1962 or 1963, a new degreaser was installed containing
a still which could separate the TCE from the waste oil.
TCE has a lower boiling point than oil, so it could be
evaporated leaving oil at the bottom of the still. The
vaporized TCE was condensed and reused. The waste oil
was removed and stored in 55 gallon drums.
It is undisputed that during the 1950’s, Tonka disposed
of some liquid waste on its site. On February 22, 1983,
in response to a Request of Information from the United
States Environmental Protection Agency (EPA), Tonka
described its waste disposal practices at its Mound facility
as follows:
Information available to Tonka, consisting of oral
histories of past and present employees, does not
provide specific information on the types nor the
quantities of waste disposed of at the site. The waste
material most likely disposed of at this site would have
been degreaser oil and solvents. Transport and
disposal was likely done by Tonka employees and may
have involved the opening of barrels and depositing of
the waste on the ground. We believe that disposal at
this site may have occurred for less than one year.
Insurers’ Joint Brief, Exhibit 47, at 002582-83.
A-16
Although the parties dispute details of the disposal,
documents produced at the end of June 1992 by Tonka
show that TCE waste was emptied onto the Tonka site.
These documents consist of a summary of employee
interviews by Tonka’s counsel from February 1983.
They indicate that liquid wastes, some of which included
TCE, were dumped at the Tonka site, as Tonka disposal
truck drivers from the time testified. For example, one
employee stated that the Mound site
was used for disposal of various [sic] wastes for about
three years [sic] between [sic] 1954 and 1957. The
amount disposed of ranged from about one to ten
barrels per month. The disposal would have included
TCE sludge (oils), sludge from the stripping operation,
and solvents.
Insurers’ Reply Brief, Appendix B, Exhibit 3 at 2.
Discovery has not shown that the contamination at the
Tonka site was caused by any accidental spills of TCE.
Tonka officials testified that they had no knowledge of
any accidental spills. Tonka’s insurance broker testified
that there was never a loss or claim because of any spills
or problems with vats or tanks. Barr Engineering found
no evidence of tank leakage, and there is no record
support for the proposition that TCE ever leaked from the
vat. According to Tonka, a former employee, Clyde
Wallin, testified that some TCE once spilled while the
TCE supplier pumped it into the vat at some unspecified
time after he began employment with Tonka in 1962.
A-17
One Tonka supervisor, Norman Venske, stated that there
were accidental spills of TCE from the degreasing
machine which were immediately cleaned up, but may
have overflowed into the sewers. The engineering
reports indicate, however, that groundwater
contamination was not due to TCE in the sewers, but that
disposed of on land.
In approximately 1960, Tonka started using outside
firms to perform waste removal. They took the waste off
site to dumps in the area. One Tonka employee,
Theodore Woyke, testified that he tipped waste barrels
containing solvents and waste oil on their sides in the
Tonka site west parking lot from 1967 until 1983, as
directed by his supervisor. According to Tonka, Woyke
is a former employee who is biased against Tonka and
who won damages in a suit against Tonka commenced in
1983 for damage to his farm based on contamination of
its soil from barrels of waste oil he took home.
In 1979, Tonka installed a 1,000 gallon tank in the
facility to collect waste oil. TCE was discovered in the
tank in 1982. The MPCA cited Tonka for violations in
its waste management procedures. Thereafter, Tonka
retained engineers to perform tests on the waste oil from
the degreaser. The first test showed 95% TCE
concentration; the second 62% concentration. According
to Tonka, all waste from the tank was disposed of off site
as hazardous waste. The Mound plant was closed in
1983 when Tonka moved its operations to Texas.
On June 9, 1981, Tonka filed “Notification of
Hazardous Waste Site" forms with the EPA. According
to Tonka, this filing was made in its effort to comply
with the new "Superfund" regulations. According to the
insurers, Tonka investigated its waste disposal practices
after the MPCA had begun to look into complaints about
the practices. In any event, Tonka acknowledged that
liquid waste had been discharged on the site in the late
1950’s, and that it may have disposed of hazardous
materials on site between 1954 and the early 1960's.
Tonka does not dispute that in 1981, the Metropolitan
Waste Control Commission (MWCC) found that TCE
was being discharged into the sanitary sewer serving the
Tonka site.
In June 1984, Tonka was notified that a well
inadvertently placed on its property by the City of Mound
had disclosed the existence of groundwater contamination.
Tonka retained counsel in response, who hired Barr
Engineering to investigate. In September 1984, MPCA
monitoring wells found TCE and other solvents in the
groundwater under the Mound site. The MPCA issued
a formal “Request for Initial Investigation" (RFII) on
February 5, 1985 with respect to the contamination.
In its September 1985 report, Barr Engineering found
two areas of groundwater contamination: one under the
parking lot on the west end of the plant, the other around
the old TCE holding tank on the north end of the plant.
The pollution in the former area is migrating slowly to
the southwest toward wetland tributaries to Cooks Bay
A-19
of Lake Minnetonka and Langdon Lake; the pollution in
the latter area is migrating slowly northeast toward
Harrison Bay of Lake Minnetonka. The MPCA ordered
further monitoring of the groundwater with a series of
wells. Tonka supplies the MPCA with annual data on
the groundwater pollutants. The MPCA has not ordered
further action by Tonka, nor has Tonka taken any clean-
up actions.
Tonka notified several insurers of the MPCA’s claims
in June 1985, and others in August 1987. Bituminous
commenced this declaratory judgment action in 1987.
Tonka counterclaimed and brought third party claims
against the other insurers, seeking a declaration of rights
under each policy and to recover expenses and legal fees.
Tonka acknowledges that throughout the period of its
operations in Mound, it knew that TCE should not be
breathed by workers, and states that it took appropriate
precautions. It states that TCE was not recognized as a
potential carcinogen until the mid-1970’s, however, and
that no regulations governed its disposal until May 1980.
According to the insurers, Tonka knew of TCE’s toxicity
in the 1950’s and took precautions to protect its workers.
They say Tonka knew ‘hen that TCE should not be
dumped into the environment.
The insurers present three arguments why summary
judgment should be granted in their favor. They argue
that the response costs at the Tonka Mound facility do
not fall within any of their grants of coverage because no
“accident” or “occurrence” took place. In particular,
A-20
they contend that Minnesota law employs an objective
standard for determining whether damages resulting from
an insured’s conduct are expected or intended: under this
Standard, the undisputed fact of Tonka’s intentional
dumping in the 1950’s and beyond, for which Tonka
knew or should have known the possible environmental
consequences, precludes coverage. The insurers also
argue that all counterclaims should be dismissed because
Tonka’s claims are barred by the "owned property" or
“care, custody and control” exclusions in their policies.
Tonka’s claims concern costs incurred solely at Tonka’s
Own site, under its control. Finally, the insurers argue
that Tonka’s claims do not amount to covered "damages"
because the costs were purely preventive and monitoring
measures, not costs necessary to effectuate clean-up of
contamination such as would constitute damages.
As an alternative to dismissing Tonka’s counterclaims
in their entirety, the insurers argue that coverage is
precluded under the terms of certain particular policies.
Several policies bar coverage for discharge of pollutants
unless the discharge was both "sudden" and "accidental."
One policy (Fireman’s Fund, 1986-87) contains an
absolute pollution exclusion.’ Two others (Travelers and
United States Fire) contain specialized _ pollution
exclusions which apply here, they Say.
‘Tonka does not include this policy in its discussion of
coverage. Tonka recently reached agreement with Fireman’s
Fund to settle its claims against it.
A-21
The insurers also argue that coverage would be barred
for certain time periods. They contend that Tonka would
not be entitled to coverage for any payments made or
costs incurred prior to its request: for coverage from its
insurers, i.e. 1985 or 1987, depending on the policy.
Tonka made voluntary payments until this time, and the
insurers were prejudiced by lack of notice. The insurers
also contend that coverage would be barred under each
policy issued after the date Tonka knew or should have
known of the contamination at its site. Coverage does
not extend to a harm known prior to a policy’s inception.
Tonka responds that the key issue is damage to
groundwater, not discharge of TCE on Tonka land. It
argues that there is no evidence that it intended or
expected to contaminate the groundwater, and that it has
presented evidence to dispute whether it discharged TCE
upon its property intentionally. It contends that the
standard is subjective, not objective; that is, the relevant
determination is whether there is a high degree of
certainty that it had the actual mental state of intent or
expectation to pollute the groundwater, which it did not.
A subjective standard promotes fulfillment of the
reasonable expectations of the parties. Tonka asserts that
the drafting history of the policies shows that the insurers
intended to exclude only damage which was subjectively
expected or intended by the insured. Tonka argues that
the "owned property" exclusion does not preclude
coverage because the Minnesota Supreme Court
determined, on a question certified to it for this case, that
property damage has occurred. The damage to
groundwater is third-party damage, and Tonka’s costs
A-22
have been incurred in responding to the MPCA’s orders
protecting the state’s interest in the groundwater.
Tonka contends that the qualified pollution exclusion
in some policies does not apply because the release of
TCE was "sudden and accidental." The release was
unexpected and unintended: the onset was sudden like an
illness which suddenly appears but may last for years.
Tonka argues that the language of the exclusion is
ambiguous, so that the drafting history and the insurance
industry’s prior interpretations of the language are
relevant evidence. This history shows the industry
intended to provide blanket protection for unintended
damages, including pollution. Tonka also contends that
each particular policy provides coverage despite some
variations in language.
Tonka argues that its notice to the insurers was
adequate and that they have not met their burden of
showing they suffered actual prejudice from late notice.
The “voluntary payment" exclusion should not be
interpreted to eliminate the requirement of actual
prejudice. Tonka contends that "known risk" and "loss
in progress" doctrines have not been adopted in
Minnesota, and even if they were the law, they should
not be applied here because the loss was groundwater
contamination, for which Tonka was not identified as a
potentially responsible party until February 1985, a date
after the inception of all the policies at issue.
Finally, Tonka states that the issues raised by this
motion should be certified to the Minnesota Supreme
A-23
Court since state law is uncertain and the issues are of
great public importance.
In a separate brief, Bituminous argues that there is no
evidence of property damage occurring within its policy
periods sufficient to trigger coverage. It agrees with
Tonka that the damage here is groundwater
contamination, which may have occurred during the
policy period, but the damage was not known or
manifested until after the policy had been cancelled.
Tonka responds that what triggers coverage is not
discovery of injury, but injury-in-fact. Here
contamination of the groundwater is alleged by the
MPCA to have continued throughout all the insurers’
policy periods; it is irrelevant that it was not discovered
until later. Other insurers, United States Fire, North
River, and Industrial Indemnity, disagree with Bituminous
on this point. They argue that the court does not need
to determine the trigger of coverage issue at this time;
but if the court does, it should adopt the injury-in-fact
standard, not the manifestation of injury standard
recommended by Bituminous.
III.
On a motion for summary judgment, all material facts
and inferences are construed in favor of the non-moving
party. AgriStor Leasing v. Farrow, 826 F.2d 732, 734
(8th Cir. 1987). To defeat a motion for summary
judgment, however, the non-moving party must show
through specific evidence that there are material facts in
dispute creating a genuine issue for trial; it may not rest
A-24
Only upon the allegations or denials of its pleadings.
Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).
Tonka’s counterclaim against the insurers seeks a
declaration that its costs incurred in responding to the
MPCA are covered by the relevant policies. Although
the MPCA has not brought a traditional civil lawsuit
against Tonka, a possible duty to defend was triggered
by the MPCA’s actions here. "Surely the legal
proceedings commenced by MPCA against the insured[]
is equally coercive as a civil judgment against the.
insured." ini Vv Vv
Indem. Co., 457 N.W.2d 175, 183 (Minn. 1990).
Furthermore, the damage to groundwater under the
Tonka site is property damage which potentially triggers
the duty to defend, even if the costs to date are only for
monitoring the extent of the contamination. The
monitoring wells and studies implemented by Tonka at
the behest of the MPCA are not “purely preventive
measures" which are not damages. Id. at 184. The
wells and studies arise from the - actual property damage
and involve potential remedial measures.
An insurer’s duty to defend is contractual in nature
and is ordinarily determined by examining the allegations
of the complaint and the policy coverage. Prahm v.
Rupp Constr. Co., 277 N.W.2d 389, 390 (Minn. 1979).
An insurer contesting coverage has the burden of proving
the nonexistence of coverage. Id.
This case does not fit the Ordinary model in that there
is no complaint, only directives from the MPCA to
A-25
Tonka. The MPCA alleges that the groundwater is
contaminated and that Tonka released hazardous
substances into the groundwater. The requirements
imposed by the MPCA on Tonka are not premised on
whether Tonka’s TCE disposal was negligent, reckless,
or intentional.
The ordinary rule is that the insurer is obligated to
defend if any part of the cause of action against the
insured arguably is covered by the policy. Bituminous
Cas. Corp. v. Bartlett, 240 N.W.2d 310, 312 (Minn.
1976), overruled on other grounds, Prahm _v. Rupp
Constr. Co., supra. “However, the complaint is not
controlling when actual facts clearly establish the
existence or nonexistence of an obligation to defend."
Id., 240 N.W.2d at 312. When the insurer challenges
whether the complaint alleges an “accident” or
“occurrence” within the meaning of the policy, “the
nature of the cause of action is separately determined to
decide if it constitutes an insured occurrence, independent
of the way the claim is characterized in the underlying
lawsuit." Farmers Union Oil Co. v. Mutual Serv. Ins.
Co., 422 N.W.2d 530, 533 (Minn. Ct. App. 1988),
citing Bituminous Cas. Corp., supra, 240 N.W.2d at 312.
The policies at issue in this case define the terms
"accident" and “occurrence” in the same way as the
terms are usually defined in Minnesota case law.” The
“*Tonka’s request to certify the issues raised in this motion
to the Minnesota Supreme Court should be denied. The issues
(continued...)
A-26
definitions are not ambiguous. Ambiguity in an
insurance policy is a question of law to be decided by the
court.
Co., 275 N.W.2d 32, 34 (Minn. 1979); see also St. Paul
° . it 4
No. 91-2656, slip op. at 10 (8th Cir. July 2, 1992).
Although any ambiguity in the language of the policy
must be construed in favor of the insured, the court "has
no right to read an ambiguity into the plain language of
an insurance contract in order to construe it against the
insurer." Henning Nelson Constr. Co. v, Fireman’s
Fund Am. Life Ins. Co., 383 N.W.2d 645, 652 (Minn.
1986) (citations omitted). The relevant language in the
policies at issue here is not ambiguous.’
Under the policies, an accident is “an unexpected,
unforeseen, or undesigned happening or consequence
‘(...continued)
of Minnesota law are clear on this motion and do not require
certification, unlike the question which was certified by this
court on October 20, 1988 in this case (the question related to
what constitutes "damages" under the policies: it was answered
on June 8, 1990).
"During the development of this case, the court permitted
Tonka to undertake discovery concerning the drafting history
and intentions of the parties in relation to the policies at issue.
At that time, the legal question of ambiguity in policy language
was not directly before the court, and the court wanted to
provide Tonka with every Opportunity to develop its case.
The question of ambiguity is now squarely presented. The
drafting history and other parole evidence are not relevant to
the interpretation of these unambiguous policies.
A-27
from either a known or unknown cause.” Hauenstein v.
St. Paul-Mercury Indem. Co,, 65 N.W.2d 122, 126
(Minn. 1954); see Bituminous Cas. Corp. v. Bartlett,
supra, 240 N.W.2d at 310. After November 1, 1958,
the grants of coverage in all policies issued to Tonka
were occurrence based. An occurrence is "an accident,
including continuous or repeated exposure to conditions,
which results in personal injury or property damage
neither expected nor intended from the standpoint of the
insured." Sage Co. v. Insurance Co. of No. Am., 480
N.W.2d 695, 698 (Minn. Ct. App. 1992).
Under Minnesota law, the expectation of the insured
is considered from an objective point of view.
For the purposes of an exclusionary clause in an
insurance policy the word "expected" denotes that
the actor knew or should have known that there
was a substantial probability that certain
consequences will result from his actions. The
results cease to be expected and coverage is present
as the probability that the consequences will follow
decreases and becomes less than a_ substantial
probability.
Vv r Vv Vv :
480 N.W.2d 368, 372 (Minn. Ct. App. 1992), quoting
Auto-Owners Ins. Co. v. Jensen, 667 F.2d 714, 720 (8th
Cir. 1981). "The standard is viewed as an objective
Standard that involves a higher degree of certainty than
reasonable foreseeability." Id.
A-28
The objective standard for determining an insured’s
expectation underlies the Minnesota view that reckless
acts on the part of the insured may preclude a duty to
defend by the insurer because there was no “accident” or
"occurrence." In Bituminous Cas, Corp. v. Bartlett the
Minnesota Supreme Court held that a contractor’s
intentional or reckless failure to conform to building
specifications was not an “occurrence” covered by a
comprehensive general liability insurance policy. The
court stated:
A construction contractor’s liability policy is
designed to protect him from fortuitous losses
occurring in connection with his work. If property
damage occurs because of mistake or Carelessness
on the part of the contractor or his employees, he
reasonably expects that damage to be covered. On
the other hand, the insurer is in the business of
distributing losses due to such property damage
among a large number of policyholders. It is able
to properly set premiums and supply coverage only
if those losses are uncertain from the Standpoint of
any single policyholder. If the single insured is
allowed through intentional or reckless acts to
consciously control the risks covered by the policy,
a central concept of insurance is violated.
Id., 240 N.W.2d at 313 (footnote omitted). The court
noted that defects in workmanship were clear and had
been called to the contractor’s attention during the course
of construction. "Therefore, any damage from them
Should have been expected by him." Id, That this
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damage was expectable meant that it did not constitute an
“occurrence” as a matter of law. The court reversed a
declaratory judgment for the insured and held: "The
absence of any occurrence clearly precludes coverage.
Therefore, there is no obligation to defend." Id, at 314.
Bituminous was followed under different circumstances
in Farmers Union Oil Co., supra. In that case, a farmer
asked Farmers Union, an agricultural cooperative, to
spray his corn crop with a certain pesticide. The
cooperative knew that the pesticide was not approved by
the EPA for use on corn. But having been assured by
the farmer that a particular method of application would
make the pesticide safe for his corn, the cooperative
agreed to spray. The corn was damaged; and the farmer
sued the cooperative. The cooperative tendered the
complaint to its insurer, who declined to defend on the
basis that there was no “occurrence” triggering coverage
within the terms of the policy. The court affirmed
judgment for the insurer. It noted that the cooperative
intended no damage of any sort to the farmer’s corn
crop. The cooperative was reckless in spraying,
however, for it "knew of the substantial risks involved,
proceeded in light of this knowledge, and disregarded the
known hazard." Id., 422 N.W.2d at 533. Based on this
recklessness, and in the absence of any subjective intent
to cause damage, the court held that there was no
“occurrence” and the insurer did not have a duty to
defend.
Similarly, in Sage Co. v, Insurance Co. of No. Am.,
supra, the court affirmed summary judgment for the
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insurer that it had no duty to defend. A real estate
partnership fired one of its apartment building managers
claiming she was not satisfactorily performing her duties.
She sued for age discrimination. The partnership
tendered the complaint to its insurers, which declined to
defend on the grounds that there was no “occurrence”
within the meaning of the policies. The court held that
the insurers "have met their burden of proving the
nonexistence of coverage as a matter of law." Id., 480
N.W.2d at 697. The termination was not an occurrence
because it was intentional. It was not relevant whether
the partnership intended the particular harm alleged by
the building manager, namely age discrimination. There
was no duty to defend because it was clear the
partnership intended the termination, which resulted in
the alleged harm. See also League of Minnesota Cities
Ins. Trust v, Coon Rapids, 446 N.W.2d 419 (Minn. Ct.
App. 1989) (no duty to defend because pollution
exclusion in policy precluded coverage for toxic
by-product of Zamboni ice cleaning machine).
In the present case, the undisputed material facts show
that Tonka’s ongoing and routine disposal of TCE on its
site precludes coverall as a matter of law. Tonka may
not have known all the dangers of TCE at the time, and
may not have specifically intended to contaminate the
groundwater. But Tonka’s role in causing the harm
through its disposal practices means that its costs are not
due to an “accident” or “occurrence” under its policies.
The undisputed facts establish that Tonka knowingly
released TCE in the 1950's through recurring dumping
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on its site. This is shown not only by the affidavit and
deposition testimony submitted by the insurers, but also
by Tonka’s own representations to the EPA and MPCA.
For example, Dale Heitz, one of Tonka’s truck drivers
from 1956 through 1958, testified:
Q.
When you got to wherever it was that you were
going to empty these barrels of waste, would
you open the bung holes to accomplish the
emptying, or would you get the tops off in
some fashion?
Open the bungs and let them run.
Would you remain there until the barrel was
empty, or would you come back later and pick
them up?
I didn’t unload them from the truck. Just
tipped them over and let it run off the back
end.
Heitz depo. at 35. Another example is Tonka’s report to
the EPA describing how Tonka employees would dispose
of barrels of solvents at the Tonka site by opening the
barrels and depositing the contents on the ground. This
method of disposal was not isolated but routine during
that time period.
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Tonka raises various hypotheses about possible
accidental spills, leaks, and spills during delivery.°
Tonka’s submissions are mere conjecture, however.
Wallin’s affidavit about spills during supply is so vague
about time as to be meaningless in this context. There is
nothing in the record to Support the hypothesis of leaks
from vats. Venske is quick to point out Tonka’s
excellent response to accidental spills, and stated at his
deposition that at most the spills ran off into the sewers
-- but there is no evidence that the groundwater
contamination at issue here came from the sewers. On
the contrary, the record shows that the TCE leached
through the Tonka land. The location of the TCE in the
groundwater found by Barr Engineering correlates with
the insurers’ evidence concerning on-site disposal in the
1950's. Tonka did not dispose of TCE accidentally.
The record also establishes that Tonka knew or should
have known that there was a substantial probability that
this release of TCE would cause property damage. Two
Tonka employees, Al Hilk and Car! Krause, reported that
the dumping of barrels on the Tonka site resulted in trees
“Tonka also presents the affidavit of an expert, Hokkanen,
who opines that the contamination was caused by spills and
leaks rather than the intentional dumping in the 1950's. The
insurers have moved to strike this affidavit on procedural
grounds and for lack of foundation.
The affidavit does not create an issue of material fact since
it does not show a basis or Support in the record for its
opinions. The affidavit is thus insufficient under Fed.R.Ev.
702 & 703. Because of this determination the motion to strike
is moot.
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ome
dying. Insurers’ Reply Brief, Appendix B, Exhibit 3 at
5. Lloyd Laumann, hired to work in the shipping
department in 1955, testified that he helped move barrels
including TCE in the 1950’s. He was aware that “we
had to be very cautious" with the barrels. Laumann
depo. at 29. Sometime during 1958, Laumann recalled
receiving warnings from management about TCE. ld.
at 31.
Studies in the 1950's, and earlier, reported hazards
involved with TCE, including four deaths of workers by
inhalation at degreasing operations. Insurers’ Joint
Appendix 3, Exhibit M at 45. This report is confirmed
by experiences at Tonka. Floyd Weinzierl, a paint
department employee, testified that when cleaning out the
degreasers, he would let them air out first because, "You
couldn’t breathe in there otherwise. It [the TCE vapors]
would kill you." Weinzierl depo. at 75. See also Wallin
depo. at 26 (worker passed out from TCE vapors); Heitz
depo. at 188 (in 1958 knew TCE "could kill you if you
got too much of it"). The full effects of TCE were not
documented, nor did governmental regulations cover
TCE, until some time after Tonka’s on-site TCE disposal
in the 1950's. The record establishes, however, that
Tonka knew at the time of its disposal that there was a
substantial probability TCE was a harmful substance.
Under these circumstances, the damages caused by the
TCE, including those sought by Tonka here, cannot be
recovered under the terms of the policies. These harms
do not fall within the grant of coverage of the insurance
policies for an accident or occurrence.
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This conclusion is similar to that reached in Bureau of
Engraving vy, Federal Ins. Co., Civ. 3-89-517 and Civ.
3-90-673 (D. Minn. June 3, 1992) (Magnuson, J.). That
case involved barrels of hazardous waste buried at five
sites in Isanti County, Minnesota, which was later found
to have contaminated soil and groundwater. The
contamination had been caused by leaks from the barrels.
The insured argued that it did not know the buried
substances were hazardous, nor did it subjectively believe
that they were, nor had government regulations identified
them as hazardous at the time it disposed of them. The
court held that it was irrelevant whether the insured knew
or believed that the substances were hazardous, or
whether government regulations had identified them as
such. The insured’s liability was for damage caused by
leakage of contaminants from the barrels, and the leakage
constituted the release or discharge of the contaminants.
This release was not accidental, hence there was no
coverage.’
In Bureau of Engraving, the insured did not intend to
pollute or specifically to contaminate groundwater. It
only intended to bury the barrels. That intent to bury
was the critical intent, not the intent to pollute.
Similarly, while Tonka no doubt had no specific intent to
?
ving involved the qualified pollution
exclusion, whether release was sudden and accidental, not
whether there was an accident or occurrence. However,
Tonka itself argues that the pollution exclusion ej restates
the extent of coverage provided by the definition of accident
or occurrence. The same reasoning applies in each context.
A-35
i
pollute the groundwater, it knowingly and intentionally
disposed of TCE in such a fashion that damage was a
substantial probability, damage later discovered to
involve groundwater. Under Minnesota law, Tonka may
not hold its insurers liable to defend against the MPCA
proceedings concerning groundwater contamination, nor
for associated clean-up costs.
In addition, there is no liability to Tonka under the
policies which contain a pollution exclusion denying
coverage for a discharge unless it is both “sudden and
accidental." The term “accidental” has already been
discussed. "Sudden," the other term, "in the context of
the policies carries the temporal connotation of
‘abruptness.’" Sylvester Brothers Dev, Co, v. Great
Central Ins. Co., supra, 480 N.W.2d at 375. This
definition is not ambiguous. Id, at 376; see also Aetna
, No.
91-2252, slip op. at 4-5 (8th Cir. July 6, 1992) (applying
Missouri law but reviewing law in various jurisdictions
involving identical policy language).
There was nothing abrupt about the disposal of TCE
at the Tonka site. According to Tonka's submission to
the EPA, disposal of degreaser oil and solvents on its site
occurred for a period less than one year. Tonka's
employees indicated in interviews that the disposal took
place routinely from 1954-57. Under either scenario, the
release of the pollutant at issue in this case was not
sudden as defined in the policies and under Minnesota
law. The “sudden and accidental" exception to the
pollution exclusion contained in policies in this case does
A-36
not apply to the claims for which Tonka seeks coverage.
Thus, the pollution exclusion applies and precludes
coverage under those policies which contain it.
IV.
All the claims and counterclaims in this case have
been resolved. Summary judgment should be entered for
the insurers, and dismissing Tonka’s counterclaims." The
unambiguous language of the insurance policies precludes
the coverage Tonka seeks, and Minnesota law provides
that in the absence of any accident or occurrence there is
neither a duty to defend nor to indemnify. This result is
consistent with Minnesota policy concerning the purposes
of insurance and the concern that control of the risks not
be within the sole province of the insured. See
Bituminous Cas. Corp. v,. Bartlett, supra. Because of
this resolution other issues raised by the parties need not
be addressed.
ORDER
Accordingly, based upon the above, and all the files,
records, and proceedings herein, IT IS HEREBY
ORDERED that:
"Any crossclaims among insurers are thus rendered moot.
The crossclaim brought by Travelers Insurance Company
against Fireman's Fund was recently dismissed without
prejudice by stipulation of the parties; Travelers also asserted
crossclaims against the other insurers.
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1. the motion for summary judgment by
counterclaim defendants is granted and the
claims of counterclaimant Tonka Corporation
are dismissed;
2. the motion for summary judgment by plaintiff
is granted as to its claims against Tonka
Corporation;
3. the motion brought by counterclaim defendants
to shorten the time period to hear their motion
for sanctions and to hear their motion to strike
the affidavit of expert witness Gary Hokkanen
is denied;
4. the motion brought by counterclaim defendants
for sanctions is denied;
5. the motion brought by counterclaim defendants
to strike the affidavit of expert witness Gary
Hokkanen is dismissed as moot;
6. all crossclaims among counterclaim defendants
are dismissed as moot.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: August 21, 1992
(s/ Diana E, Murphy
Diana E. Murphy
United States District Judge
A-38
United States Court of Appeals
FOR THE EIGHTH CIRCUIT
No. 92-3187MNMI
Bituminous Casualty Corporation, °
an Illinois corporation, ”
*
Appellee, -
“ — Appeal from
VS. ° the United
* States District
Tonka Corporation, a Minnesota * Court for the
corporation, . Northern
7 District of
Appellant, ° lowa
VS. ”
Bituminous Casualty Corporation, °
et al., ”
Appellees. -
The petition for rehearing by the panel is denied.
December 21, 1993
Order Entered at the Direction of the court:
/s/ Michael Gans
Clerk, U.S. Court of Appeals, Eighth Circuit
A-39
Minn. Stat. § 480.061
Uniform Certification of Questions of Law
Subdivision 1. Power to answer. The supreme
court may answer questions of law certified to it by the
supreme court of the United States, a court of appeals of
the United States, a United States district court, a United
States bankruptcy court, or the highest appellate court or
the intermediate appellate court of any other state, when
requested by the certifying court if there are involved in
any proceeding before it questions of law of this state
which may be determinative of the cause then pending in
the certifying court and as to which it appears to the
certifying court there is no controlling precedent in the
decisions of the supreme court of this state.
Subd. 2. Method of invoking. This section may be
invoked by an order of any of the court referred to in
subdivision 1 upon the court’s own motion or upon the
motion of any party to the cause.
Subd. 3. Contents of certification order. A
certification order shall set forth
(a) the questions of law to be answered; and
(b) a Statement of all facts relevant to the questions
certified and showing fully the nature of the controversy
in which the questions arose.
Subd. 4. Preparation of certification order. The
certification order shall be prepared by the certifying
court, signed by the judge presiding at the hearing, and
A-40
forwarded to the supreme court by the court
administrator of the certifying court under its official
seal. The supreme court may require the Original or
copies of all or of any portion of the record before the
certifying court to be filed with the certification order, if,
in the opinion of the supreme court, the record or portion
thereof may be necessary in answering the questions.
Subd. 5. Costs of certification. Fees and costs shall
be the same as in civil appeals docketed before the
supreme court and shall be equally divided between the
parties unless otherwise ordered by the certifying court in
its order of certification.
Subd. 6. Briefs and argument. Proceedings in the
supreme court shall be those provided in rules of the
court.
Subd. 7. Opinion. The written opinion of the
supreme court stating the law governing the questions
certified shall be sent by the clerk of the court to the
certifying court and to the parties and shall be res
judicata as to the parties.
Subd. 8. Power to certify. The supreme court or
the court of appeals, on its own motion or the motion of
any party, may order certification of questions of law to
the highest court of any state when it appears to the
certifying court that there are involved in any proceeding
before the court questions of law of the receiving state
which may be determinative of the cause then pending in
the certifying court and it appears to the certifying court
A-41
that there are not controlling precedents in the decisions
of the highest court or intermediate appellate courts of
the receiving state.
Subd. 9. Procedure on certifying. The procedures
for certification from this state to the receiving state shall
be those provided in the laws of the receiving state.
Subd. 10. Uniformity of application and
construction. This section shall be so applied and
construed as to effectuate its general purpose to make
uniform the law with respect to the subject of this section
among those states which enact it.
Subd. 11. Citation. This section may be cited as the
uniform certification of questions of law act.
A-42
Rule 56. Summary Judgment
(a) For Claimant. A party seeking to recover upon
a claim, counterclaim, or cross-claim or to obtain a
declaratory judgment may, at any time after the
expiration of 20 days from the commencement of the
action or after service of a motion for summary judgment
by the adverse party, move with or without supporting
affidavits for a summary judgment in the party’s favor
upon all or any part thereof.
(b) For Defending Party. A party against whom a
claim, counterclaim, or cross-claim is asserted or a
declaratory judgment is sought may, at any time, move
with or without Supporting affidavits for a summary
judgment in the party’s favor as to all or any part
thereof.
(c) Motion and Proceedings Thereon. The motion
shall be served at least 10 days before the time fixed for
the hearing. The adverse party prior to the day of
hearing may serve opposing affidavits. The judgment
sought shall be rendered forthwith if the pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there
is nO genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law.
A summary judgment, interlocutory in character, may be
rendered on the issue of liability alone although there is
a genuine issue as to the amount of damages.
A-43
(d) Case Not Fully Adjudicated on Motion. If on
motion under this rule judgment is not rendered upon the
whole case or for all the relief asked and a trial is
necessary, the court at the hearing of the motion, by
examining the pleadings and the evidence before it and
by interrogating counsel, shall if practicable ascertain
what material facts exist without substantial controversy
and what material facts are actually and in good faith
controverted. It shall thereupon make an order
specifying the facts that appear without substantial
controversy, including the extent to which the amount of
damages or other relief is not in controversy, and
directing such further proceedings in the action as are
just. Upon the trial of the action the facts so specified
shall be deemed established, and the trial shall be
conducted accordingly.
(e) Form of Affidavits; Further Testimony;
Defense Required. Supporting and opposing affidavits
shall be made on personal knowledge, shall set forth such
facts as would be admissible in evidence, and shall show
affirmatively that the affiant is competent to testify to the
matters stated therein. Sworn or certified copies of all
papers or parts thereof referred to in an affidavit shall be
attached thereto or served therewith. The court may
permit affidavits to be supplemented or opposed by
depositions, answers to interrogatories, or further
affidavits. When a motion for summary judgment is
made and supported as provided in this rule, an adverse
party may not rest upon the mere allegations or denials
of the adverse party’s pleading, but the adverse party's
response, by affidavits or as otherwise provided in this
A-44
rule, must set forth specific facts showing that there is a
genuine issue for trial. If the adverse party does not so
respond, summary judgment, if appropriate, shall be
entered against the adverse party.
(f) When Affidavits are Unavailable. Should it
appear from the affidavits of a Party opposing the motion
that the party cannot for reasons stated present by
affidavit facts essential to justify the party’s opposition,
the court may refuse he application for judgment or may
order a continuance to permit affidavits to be obtained or
depositions to be taken or discovery to be had or may
make such other order as is just.
(g) Affidavits Made in Bad Faith. Should it appear
to the satisfaction of the court at any time that any of the
affidavits presented pursuant to this rule are presented in
bad faith or solely for the purpose of delay, the court
shall forthwith order the party employing them to pay to
the other party the amount of the reasonable expenses
which the filing of the affidavits caused the other party to
incur, including reasonable attorney's fees, and any
offending party or attorney may be adjudged guilty of
contempt.
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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.