RILEY, J.
In this case, we are asked to interpret and apply the pollution-exclusion clause found in the comprehensive general liability policy of Allstate
We hold that the phrase "sudden and accidental" is unambiguous. Furthermore, we find that the definition of "sudden" includes a temporal element as well as a sense of the unexpected, and that "accidental" means unexpected and unintended.
We, therefore, find that the Court of Appeals erred in holding that the pollution-exclusion clause did not apply under the facts of this case. Accordingly, we reverse the decision of the Court of Appeals and find, as a matter of law, that the pollution-exclusion clause applies and, therefore, plaintiff, The Upjohn Company, is not entitled to coverage under defendant Allstate's policy.
I. FACTS AND PROCEEDINGS
On August 13, 1982, The Upjohn Manufacturing Company (UMC), a Puerto Rico-based division of The Upjohn Company, began its annual production of clindamycin, an antibiotic. Two toxic byproducts were produced in the clindamycin campaign. These chemicals were pumped into an underground storage tank designated FA-129 which had a ten thousand gallon capacity.
Prior to August 16, 1982, the tank-level measurements remained constant at ten inches or 475 gallons. However, on August 16, 1982, the same day that Upjohn had pumped its first batch of approximately seventeen hundred gallons of the by-product into tank FA-129, the tank-level measurement read three inches or eighty gallons. Despite this discrepancy in the tank-level measurement, Upjohn continued, over the next few weeks, to pump eight more batches of by-product into tank FA-129. Approximately seventeen hundred gallons of by-product were added to tank FA-129 on each of the following days: August 18, 19, 24, 25, 26, 30 and 31, and on September 1, 1982. The daily tank measurement readings continued to show levels which did not coincide with the amount of by-product which was pumped into tank FA-129.
It was determined that tank FA-129 had three holes in it due to corrosion. Upjohn estimated that approximately fifteen thousand gallons of the toxic by-product leaked from the tank since the first batch of by-product was pumped into tank FA-129.
On September 24, 1986, Upjohn moved for summary disposition. The court held that there was coverage under the policy and that coverage was not precluded by the pollution-exclusion clause contained in the policy. The Court, therefore, granted Upjohn's motion for summary disposition.
The Court of Appeals affirmed the trial court's grant of summary disposition. Relying on the definition of "sudden and accidental" as stated in Jonesville Products, Inc v Transamerica Ins Group, 156 Mich.App. 508, 512; 402 N.W.2d 46 (1986), the Court held that "even a continuous discharge of chemicals may be both accidental (i.e., unintended) and sudden (i.e., unexpected) and, therefore, outside the pollution exclusion." The Court held that the trial court properly concluded that there was no genuine issue of material fact that the leak was "sudden and accidental." Upjohn Co v New Hampshire Ins Co, 178 Mich.App. 706, 716; 444 N.W.2d 813 (1989).
On July 13, 1990, this Court granted Allstate's leave to appeal and ordered that it be consolidated with Polkow v Citizens Ins Co of America and Protective Nat'l Ins Co of Omaha v City of Woodhaven.
II. ANALYSIS
The Allstate Comprehensive General Liability
The pollution exclusion does not apply to releases which are "sudden and accidental." The question presented in this case is whether the release of the chemical by-product from tank FA-129 was "sudden and accidental," and, therefore, whether the pollution-exclusion clause applies, thus, precluding coverage under the policy.
"Initially, in determining whether a policy applies, we first must determine whether the policy is clear and unambiguous on its face." Metropolitan Property & Liability Ins Co v DiCicco, 432 Mich. 656, 665; 443 N.W.2d 734 (1989) (opinion of RILEY, C.J.). We cannot create an ambiguity where none exists. Edgar's Warehouse, Inc v United
We find persuasive the recent opinions of the United States Court of Appeals for the Sixth Circuit which find the terms of the pollution exclusion to be unambiguous. United States Fidelity & Guaranty Co v Star Fire Coals, Inc, 856 F.2d 31 (CA 6, 1988); United States Fidelity & Guaranty Co v Murray Ohio Mfg Co, 875 F.2d 868 (CA 6, 1989); FL Aerospace v Aetna Casualty & Surety Co, 897 F.2d 214 (CA 6, 1990).
We conclude that when considered in its plain and easily understood sense, "sudden" is defined with a "temporal element that joins together conceptually the immediate and the unexpected." Star Fire Coals, supra at 34. The common, everyday understanding of the term "sudden" is "`happening, coming, made or done quickly, without warning or unexpectedly; abrupt.'" FL Aerospace, supra at 219. "Accidental" means "[o]ccurring unexpectedly and unintentionally; by
Under the facts of this case, we conclude that the release of material from tank FA-129 could not possibly be considered "sudden" because the release of by-product from tank FA-129 was not unexpected by Upjohn.
Prior to August 16, 1982, the daily tank-level measurements for tank FA-129 remained constant at ten inches or 475 gallons. This is consistent with the fact that when tank FA-129 was not being
In early September 1982, after a monthly audit of tank levels by Upjohn indicated that there was a leak in tank FA-129, no additional quantities of the by-product were pumped into the tank. It was later determined that the discrepancies in the tank-level readings were due to several holes in tank FA-129 which caused the tank to continuously leak chemicals into the ground from August 16, 1982, through September 7, 1982. Upjohn states that anywhere from twelve thousand gallons to eighteen thousand gallons of by-product leaked from tank FA-129 during the period.
Upjohn claims that although the tank level measurements for tank FA-129 were unusually low on August 16, 1982, and although a large discrepancy continued to exist in the measurements that were taken, recorded, and reviewed by Upjohn employees, Upjohn did not have enough information to expect that the chemical by-product that was in the tank and was continuously being added to the tank was escaping from a leak in the tank. Upjohn claims that they did not expect that there
Upjohn's claims cannot be reasonably supported by the record in this case. Although reduced tank levels may not themselves indicate a leak in tank FA-129, the fact that the tank level on August 16, 1982, measured three inches or eighty gallons precludes this Court from finding anything other than that Upjohn must have expected a leak in tank FA-129. Thus, we find, as a matter of law, that the Upjohn Company had sufficient information available to it on August 16, 1982, to expect that a chemical by-product was escaping from a leak in tank FA-129.
In determining the knowledge attributable to a company, the court in United States v TIME-DC, Inc, 381 F.Supp. 730, 738 (WD Va, 1974), held:
The Michigan Court of Appeals adopted this reasoning in People v American Medical Centers of Michigan, Ltd, 118 Mich.App. 135; 324 N.W.2d 782 (1982).
In Gordon Sel-Way, Inc v Spence Bros, Inc, 177 Mich.App. 116, 124; 440 N.W.2d 907 (1989),
We adopt this reasoning and apply it in this case. This Court concludes that the Upjohn Company had sufficient information available to it, through its various employees and through its records kept at the UMC facility, to allow us to find, as a matter of law, that the release of chemical
III. CONCLUSION
In summary, under the imputed-collective-knowledge standard the Upjohn Company cannot claim that it did not expect on August 16, 1982, and every day thereafter, the release of by-product from tank FA-129. Furthermore, we reject Upjohn's assertion that the information obtained by several of its employees was not acquired by any individual employee who then would have comprehended its full import, and that only after a monthly audit of the same information could it have expected the release.
Since the release of chemical by-product was not unexpected, as a matter of law it cannot be "sudden and accidental."
BOYLE, GRIFFIN, and MALLETT, JJ., concurred with RILEY, J.
CAVANAGH, C.J. (concurring in part and dissenting in part).
I agree with the majority that the phrase "sudden and accidental" contained in the exception to the pollution exclusion clause is unambiguous. I also agree that the word "sudden" includes a temporal element. I write separately because the grant of summary disposition in this case was inappropriate and because I am not convinced that this leak could not possibly, as a matter of law, have been sudden. Whether the underground leak occurred gradually or "suddenly" upon the first day's influx of by-product is a question of fact, and the case should be remanded to allow the lower court to apply the definition developed by this Court.
The lead opinion declares that the release "could not possibly be considered `sudden' because the release of by-product from tank FA-129 was not
According to defendant Upjohn, however, the recordings were kept on separate sheets and were not "compared with previous days' sheets," until the monthly audit was performed. Since Upjohn disputes the daily comparison, there is a genuine issue of material fact, and it is inappropriate for this Court to decide which version of the facts it prefers.
Furthermore, having defined "sudden" to have a temporal element, it would seem prudent to determine the quickness with which this leak occurred. If the holes in the tank developed simultaneously upon the first day's influx of by-product, it could be declared a "sudden" occurrence. In fact, the majority opinion confirms my belief that the leak could have been sudden:
This lends credence to the theory that the leak occurred "suddenly." The by-product apparently
While Upjohn may have been negligent in its monitoring, the possibility of negligence is the very reason for purchasing comprehensive, general liability insurance. The lapse of time between the beginning of the leak and the discovery of the leak is not determinative of the question whether the leak was sudden or accidental. In Wagner v Milwaukee Mutual Ins Co, 145 Wis.2d 609; 427 N.W.2d 854 (1988), rev'd on other grounds 155 Wis.2d 737; 456 N.W.2d 570 (1990),
I would remand for a factual determination regarding the "sudden and accidental" nature of this leak.
LEVIN, J. (dissenting).
The principal question presented concerns the construction and application of the pollution-exclusion clause of the comprehensive general liability (CGL) policy, and in particular the phrase "sudden and accidental."
The majority holds that "sudden and accidental" is unambiguous, that "when considered in its plain and easily understood sense, `sudden' is defined with a `temporal element that joins together conceptually the immediate and the unexpected,'"
Then, focusing solely on the definition of "sudden," the majority finds that the leak from Upjohn's underground storage tank "could not possibly be considered `sudden' because the release of by-product from tank FA-129 was not unexpected by Upjohn."
Upjohn's daily inventory records indicated that tank FA-129 contained less fluid after the first batch of by-product was pumped into it than it had before. On the basis of this record, the majority finds that "the fact that the tank level on August 16, 1982, measured three inches or eighty gallons precludes this Court from finding anything other than that Upjohn must have expected a leak in tank FA-129."
The majority finds "as a matter of law" that Upjohn, under the theory of the "imputed-collective-knowledge standard," possessed sufficient information on the first day of the campaign to "expect" that tank FA-129 was leaking and would
Two of my colleagues concur in part and dissent in part. They concur in the holdings that the phrase "sudden and accidental" is unambiguous and that the definition of the word "sudden" includes a temporal element. They dissent because "the grant of summary disposition in this case was inappropriate and because [they are] not convinced that this leak could not possibly, as a matter of law, have been sudden."
I would hold that the phrase "sudden and accidental" is ambiguous, and that it means "unexpected and unintended." I would, with my dissenting colleagues, remand for trial. I join in their expression of disagreement with the extent to which the majority has acted as finder of fact to determine "as a matter of law" that the leak could not have been "sudden" or "unexpected."
I
Upjohn annually manufactures the antibiotic clindamycin in two-month-long "campaigns." Toxic by-products produced during the manufacturing process are pumped into a 10,000-gallon storage tank.
Immediately upon discovering the leak, Upjohn began a cleanup that included extracting the contaminant from the ground around the tanks and from groundwater. Upjohn provided drinking water for surrounding communities where wells had been contaminated. In 1987, the EPA entered a consent order requiring Upjohn to continue monitoring, and in 1989 a cleanup order was entered. Upjohn expended $6.7 million on the cleanup.
Allstate is one of Upjohn's excess liability insurers.
II
The majority construes and applies the pollution-exclusion clause in the standard CGL policy issued by Allstate. In so doing, the majority asks and answers two questions: First, is "sudden and accidental" ambiguous? Second, if the phrase is unambiguous, what is the meaning?
Addressing the first question, the majority looks to three decisions of the United States Court of Appeals for the Sixth Circuit "which find the terms of the pollution exclusion to be unambiguous."
III
I would hold that the pollution exclusion,
The policy does not define "sudden and accidental."
In Just v Land Reclamation, Ltd, 155 Wis.2d 737; 456 N.W.2d 570 (1990), the Wisconsin Supreme Court found that "sudden and accidental" was ambiguous because the term "sudden" has different meanings. The court noted that Webster's gives the primary meaning of "sudden" as unexpected, and a secondary meaning as "prompt," while the Random House Dictionary gives the primary meaning as "quickly" and the secondary meaning as "unexpected." This disparity, the court observed, is evidence of ambiguity. The court then quoted the Georgia Supreme Court:
The Wisconsin Supreme Court concluded that because "sudden and accidental" is reasonably susceptible to more than one meaning, including abrupt and immediate as well as unexpected and unintended, it is ambiguous as used in the pollution-exclusion clause.
In short, the scope of the pollution-exclusion clause, particularly the phrase "sudden and accidental," has been the subject of intense and frequent litigation since adoption by the insurance industry in the early 1970s. Such profound disagreement among courts over the construction of the same phrase in standard-form insurance policies itself is evidence of ambiguity.
IV
Courts that find the phrase "sudden and accidental" to be reasonably susceptible to different meanings, and therefore ambiguous, generally turn to the well-documented drafting and marketing history of the CGL'S pollution exclusion.
The CGL policy's drafting history has been extensively documented in many law review articles, and summarized in many cases. See Just, supra, p 747; Claussen v Aetna Casualty & Surety Co, 259 Ga. 333;
In 1966 the insurance industry acknowledged case law and revised the standard language to provide "occurrence based" coverage. The revised standard-form policy defined "occurrence" as
The 1966 standard occurrence-based policy thus explicitly covered property damage resulting from gradual pollution. Courts generally extended coverage to all pollution-related damage, even if it arose from the intentional discharge of pollutants, unless the ultimate loss was either expected or intended. At the time this policy change was implemented, representatives of the insurance industry stated that it was to be viewed as "a broadening of coverage," and that under the new policy, an insured would be covered "`until such time as
In the early 1970s, the standard-form policy was revised to add the pollution exclusion at issue in this case. Under this provision, only pollution-related losses that arose from occurrences both "sudden" and "accidental" would be covered. One writer explains that the exclusion was designed to decrease claims for losses caused by expected or intended pollution by providing an incentive to improve manufacturing and disposal processes. Unintentional or unexpected damages would still be covered as an "occurrence" under the policy.
The insurance industry submitted this revision to state regulatory authorities for approval. In West Virginia and Georgia, the dialogue between the insurance industry and the regulatory authority is a matter of public record.
The West Virginia Insurance Commissioner approved the terms of the pollution exclusion only on the basis of representations, made orally and in writing by the Mutual Insurance Rating Bureau, one of the two major insurance trade associations, that they were "`merely clarifications of existing coverages as defined and limited to the definitions of the term "occurrence," contained in the respective policies to which said exclusions would be attached.'"
The insurance industry described the pollution exclusion to its agents as follows:
It is against this backdrop that at least half the cases construing the pollution-exclusion clause have found it to be ambiguous. Of these, some have read the clause to provide coverage for injury or damage caused by an unintentional and unexpected event. See New Castle Co, supra, and cases there cited. Other cases, which find the clause ambiguous, hold that "sudden and accidental" is simply a restatement of the definition of "occurrence" and that policies incorporating the pollution-exclusion clause cover claims where the alleged injury or harm was "neither expected nor intended." See Just, supra, and cases there cited.
V
Once the phrase "sudden and accidental" is found to be reasonably susceptible of more than
VI
The majority determines that the phrase "sudden and accidental" is unambiguous and properly means "happening quickly and unexpectedly." It then proceeds to review the evidence. However, rather than relying on the definition it has just adopted, the majority uses the definition that plaintiff Upjohn argues is appropriate, i.e., that "sudden and accidental" means "unexpected and unintended."
The majority holds that the release of toxic material at issue "could not possibly be considered `sudden' because the release of by-product from tank FA-129 was not unexpected by Upjohn."
The majority assumes the role of factfinder in applying "sudden and accidental" to the "facts." The majority focuses on whether the leak was
The majority states, "as a matter of law, that the Upjohn Company had sufficient information available to it on August 16, 1982, to expect that a chemical by-product was escaping from a leak in tank FA-129."
The "imputed-collective-knowledge" standard employed by the majority stems from agency principles applicable to knowledge attributable to a corporation. In Gordon Sel-Way, Inc v Spence Bros, Inc, 177 Mich.App. 116, 124; 440 N.W.2d 907 (1989),
According to Upjohn, the tank level inventory record, consisting of the separate slips of paper on which the daily readings were recorded, was audited on a monthly basis. The records covering the 1982 clindamycin campaign were audited, pursuant to standard Upjohn procedures, between September 1 and September 3, 1982. Only on September 3, 1982, did Upjohn employees at the appropriate level of responsibility determine that a leak had occurred. Further, Upjohn executives testified on deposition that tank FA-129 was specially manufactured of materials not subject to corrosion by clindamycin by-products.
Upjohn executives also testified on deposition that because tank FA-129 was part of a "tank farm," a reduced tank level did not necessarily indicate a leak because materials could have been accidentally or unintentionally diverted to other tanks, production could have been interrupted, or materials may have been intentionally removed from the tank for disposal.
In conclusion, the majority errs in finding that Upjohn must have known on the first day of the clindamycin manufacturing campaign that tank FA-129 was leaking. What Upjohn possessed between August 16 and September 3, 1982, was raw, unanalyzed data, not knowledge. Upjohn could indeed have audited and analyzed the data and drawn conclusions on a daily basis. Those conclusions, if known to a person "at a certain level of responsibility," might be imputed to the corporation. The adequacy of Upjohn's procedures for auditing and analyzing the fluid level of the tank is a question of reasonableness under the circumstances, and therefore is not a question of law.
I would reverse and remand for trial.
FootNotes
FA 129 TANK LEVEL INVENTORY DATE LEVEL GALLONS Aug. 9 10 475 10 10 475 11 10 475 12 10 475 13 10 475 14 -- -- 15 -- -- Aug. 16 3 80[*] 17 11.5 585 18 11.5 585 19 10.5 511 20 16 945 21 -- -- 22 -- -- Aug. 23 8 342 24 8 342 25 10.5 511 26 8 342 27 8 342 28 -- -- 29 -- -- Aug. 30 8.5 375 31 15.5 903 Sept. 1 25 1,794 2 18.5 1,167 3 10.5 511 4 -- -- 5 -- -- Sept. 6 -- -- 7 7.5 312 8 25 1,794[**] 9 -- -- 10 -- --
[*] First Distillate Received
[**] Partially Filled [With] Water for Washing
[Post, p 228.]
First, Justice LEVIN cites the rule that "when a policy term is ambiguous, courts may look to extrinsic evidence of the term's meaning," but then he condemns the majority for following the same rule. Indeed, as Justice BOYLE stated in Allstate Ins Co v Freeman, 432 Mich. 656, 712; 443 N.W.2d 734 (1989), when the policy is found to be clear and unambiguous "there is no need to resort to extrinsic evidence to ascertain the meaning of the exclusion. [See 2 Couch, Insurance, 2d (rev ed), § 15:57, pp 298-302.] (Since all prior negotiations are assumed to be merged in the written contract, the policy itself constitutes the contract between the parties, and, if the meaning is clear, it alone must be looked to in construction.)"
The majority is in accord with Justice BOYLE'S analysis and thus we do not look to the drafting history when interpreting and applying the policy terms.
Notwithstanding the above, the majority rejects Justice LEVIN'S interpretation of the drafting history. Justice LEVIN uses selected portions of the drafting history to support his conclusion that the pollution-exclusion clause was intended merely as a clarification of existing coverage. Post, pp 230-231. Furthermore, the majority refuses to treat the occurrence language and the pollution-exclusion clause as interchangeable. When reading the policy as a whole, it is clear that the two clauses have a natural and separate focus. See Polkow v Citizens Ins Co of America, 438 Mich. 174; 476 N.W.2d 382 (1991). We disagree with the assertion that the pollution-exclusion clause simply clarified the definition of an "occurrence" in the coverage section of the policy. Simply stated, it is our belief that exclusions exclude. See American Motorists Ins Co v General Host Corp, 667 F.Supp. 1423, 1429 (D Kan, 1987) ("[i]t is not a novel idea that exceptions to a broad blanket of coverage can be made"); Weedo v Stone-E-Brick, Inc, 81 N.J. 233, 237; 405 A.2d 788 (1979) (the function of an exclusion "is to restrict and shape the coverage otherwise afforded"). See also Raska v Farm Bureau Mutual Ins Co, 412 Mich. 355, 363; 314 N.W.2d 440 (1982).
Justice LEVIN, like those courts which find that the terms of the pollution-exclusion clause are ambiguous, relies heavily on an assertion of ambiguity buttressed by citation to the contract construction principle which construes ambiguous language in favor of the insured. The majority concludes, however, that the terms of the pollution-exclusion clause are unambiguous. See cases cited ante, p 206. Furthermore, in response to Justice LEVIN'S claim that ambiguity exists, and his reliance on rules of contract construction for such proposition, the majority cites Wozniak v John Hancock Mutual Life Ins Co, 288 Mich. 612, 615; 286 NW 99 (1939), which states:
See also Smith v Lumbermen's Mutual Ins Co, 101 Mich.App. 78, 83; 300 N.W.2d 457 (1980) ("[a] patently unreasonable interpretation of a contractual ambiguity will not be employed merely to allow the insured to recover his losses").
Justice LEVIN, in his dissent, attempts to support his assertion of ambiguity in two ways. First, he claims that the term "sudden" is ambiguous because it is defined in a variety of ways in the dictionary (post, pp 227-228) and is thus susceptible to more than one reasonable interpretation. The dissent cites Just v Land Reclamation, Ltd, 155 Wis.2d 737; 456 N.W.2d 570 (1990), in support of this claim. The Just court held that "[t]he very fact that recognized dictionaries differ on the primary definition of `sudden' is evidence in and of itself that the term is ambiguous." Id. at 745.
We reject the reasoning of the Just court. Most, if not all, words are defined in a variety of ways in each particular dictionary, as well as being defined differently in different dictionaries. Similarly, different dictionaries have different ways of listing and ordering the several definitions of each particular word. If courts followed the reasoning of the Just court, it would be virtually impossible to write a contract that was unambiguous. Moreover, the majority refuses to ascribe ambiguity to words in the English language simply because dictionary publishers are obliged to define words differently to avoid possible plagiarism. Therefore, we reject the temptation to rewrite the plain and unambiguous meaning of the policy under the guise of interpretation. Rather, we enforce the terms of the contract as written. Eghotz v Creech, 365 Mich. 527, 530; 113 N.W.2d 815 (1962).
Second, Justice LEVIN claims that the fact that there has been "[s]uch profound disagreement among courts over the construction of the same phrase in standard-form insurance policies itself is evidence of ambiguity." Post, p 227. Although this serves as a convenient argument for those who support a finding of ambiguity, in our view it merely begs the question.
Justice LEVIN misreads the majority opinion and thus his argument fails. The majority does not determine that the phrase "sudden and accidental" means "happening quickly and unexpectedly." The majority determines that the word "sudden," when considered in its plain and easily understood sense, "is defined with a `temporal element that joins together conceptually the immediate and the unexpected.'" See ante, p 207. Therefore, Justice LEVIN is clearly wrong in stating that "rather than relying on the definition it has just adopted, the majority uses the definition that plaintiff Upjohn argues is appropriate, i.e., that `sudden and accidental' means `unexpected and unintended.'" Post, p 232 (emphasis in original).
Furthermore, Justice LEVIN'S argument that the majority, by focusing on the expectancy component of the definition of the word sudden, is being inconsistent with its own determination of what sudden means is without merit. The majority states that "sudden" is defined with a temporal element that joins together conceptually the immediate and the unexpected. Under this definition, for something to be sudden, it must be both immediate and unexpected. Since, under the facts of this case, the release of by-product was not unexpected by Upjohn, it is consistent for the majority to state that the release cannot possibly be viewed as "sudden."
However, it is clear from the undisputed facts of this case that none of these claims can be reasonably upheld. A tank-level measurement of three inches or eighty gallons would not indicate an accidental or intentional diversion of by-product to another tank because if the by-product was diverted and did not reach tank FA-129, then the tank-level measurement on August 16, 1982, should still have read at least ten inches or 475 gallons. The same rationale holds true for the claim by Upjohn that production of the by-product could have been interrupted. With respect to the claim by Upjohn that the three-inch or eighty-gallon tank-level measurement could have indicated that materials could have been intentionally removed from the tank for disposal, this was not possible because the record states that even when the tank is not in use, there is an accumulation of ten inches or 475 gallons in the tank.
Therefore, the only reasonable conclusion that can be drawn from the facts presented in the record in this case is that Upjohn must have expected that chemical by-product was escaping from tank FA-129 as early as August 16, 1982.
The majority concludes that Justice LEVIN fails to distinguish between "knowledge" and "expectancy." The majority never finds that Upjohn must have known on August 16 that the tank, in fact, was leaking. Rather, the majority finds that Upjohn had sufficient information available to it, through its various employees, to allow this Court, upon applying the imputed-collective-knowledge standard, to find, as a matter of law, that Upjohn must have expected the leak in tank FA-129. See, supra, ns 10-11 and accompanying text. The knowledge required to expect something is less than knowledge required to know the same thing. This is a distinction that Justice LEVIN fails to see. The majority need not find that Upjohn knew of the leak on August 16, 1982, to find that, as a matter of law, the release of chemical by-product was not "sudden and accidental," the majority need only find that the facts are undisputed that Upjohn expected the leak on August 16, 1982. The term "sudden" has been defined by the majority (see ante, p 207) as well as by Justice LEVIN in his dissent (see post, p 221) as having an "expectancy" component and not a "knowledge" component.
After acknowledging that the employees to which the imputed-collected-knowledge standard applies are simply those employees acting in the scope of their employment and authority and who learn or do something on behalf of the corporation, Justice LEVIN attempts to limit the scope of the standard to apply only to Upjohn's auditors or officers. This is completely in conflict with the purpose behind the standard (cf. Upjohn Co v United States, 449 U.S. 383; 101 S.Ct. 677; 66 L Ed 2d 584 [1981]) and would allow the Upjohn Corporation to "`plead innocence by asserting that the information obtained by several employees was not acquired by any one individual employee who then would have comprehended its full import'" (see ante, p 213) — something the cases cited by the majority clearly reject as the antithesis of imputed collective corporate knowledge.
The cases which endorse the imputed-collective-knowledge standard stand for the proposition that a corporation is deemed to have had knowledge of information if the means were present by which the company could have detected such information. United States v TIME-DC, Inc, 381 F.Supp. 730, 739 (WD Va, 1974). Obviously, such means were present in the case before this Court, through Upjohn's various employees and through its records kept at the UMC facility to detect information which would lead Upjohn to, at the very least, expect that tank FA-129 was leaking. "In some cases such an analysis may appear harsh, but doing business in the corporate form carries certain burdens of which this is one." Gordon, supra at 126.
Chief Justice CAVANAGH, however, believes that there is a genuine issue of material fact regarding whether the leak was expected by Upjohn. Chief Justice CAVANAGH argues that the majority relies on comparisons of daily tank farm inventory sheets to show that Upjohn had the information sufficient to expect a leak. Id. Such an argument misreads the majority's application of the facts in this case. Indeed, the majority insists that the tank level reading on August 16 alone was enough to provide the necessary information to the Upjohn Company, to allow this Court to find that Upjohn expected the leak. See ante, p 212. Therefore, any dispute regarding daily comparisons is not a genuine issue of material fact.
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