Milwaukee Metropolitan Sewerage District v. American International Specialty Lines Insurance Co.

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

ARGUED OCTOBER 29, 2009

Before FLAUM, MANION, and WOOD, Circuit Judges.

When 19 acres of land are offered for sale for $1.00, any purchaser has reason to be wary. The Milwaukee Metropolitan Sewerage District is responsible for flood control and wastewater treatment in the greater Milwaukee area. As part of a flood control project, the District needed to acquire from Milwaukee County a piece of real estate along Lincoln Creek. The nominal asking price was $1.00. In anticipation of possible pollution clean-up costs, the project manager recommended obtaining insurance coverage, which the District directed its insurance agency to acquire. After a policy was issued, the District acquired title to the land. Soon thereafter, the District encountered significant pollution on the land. But when it submitted a claim to its environ-mental liability insurer, American International Specialty Lines Insurance Company (“AISLIC”), for costs incurred in removing the pollution, the insurer denied coverage. The District then sued AISLIC in Wisconsin state court seeking damages under several state law claims. Following removal to federal court and a bench trial, the district court concluded that coverage for the pollution was appropriate. The court reformed the District’s insurance policy with AISLIC to provide coverage for the pollution removal costs and entered judgment for $226,468.51 in favor of the District. The court also entered judgment in the same amount for AISLIC on its indemnity claim against Crump Insurance Services of Illinois, Inc. (“Crump”). AISLIC and Crump appeal from the district court’s judgment, and the District cross-appeals the judgment and the denials of its post-trial motions. For the reasons that follow, we reverse the judgment of the district court and remand with instructions to enter judgment for AISLIC on the District’s reformation claim and to dismiss AISLIC’s indemnity claim against Crump as moot. We also dismiss the District’s cross-appeal as moot.

Milwaukee Metropolitan Sewerage District v. American International Specialty Lines Insurance Co.

Share with Email

Thank you for sharing!

Trending Stories

More From ALM

Subscribe to The Recorder