Heard January 4, 2016
Appeal From Richland County Alison Renee Lee, Circuit Court Judge.
Scott A. Elliott, of Elliott & Elliott, PA, of Columbia, for Appellant.
Andrew F. Lindemann, of Davidson & Lindemann, PA, of Columbia, for Respondent South Carolina Insurance Reserve Fund; and Kenneth Emanuel Berger, of the Law Office of Kenneth E. Berger, LLC, of Columbia, for Respondent Coley Brown.
East Richland County Public Service District (the District) appeals the circuit court's order finding the South Carolina Insurance Reserve Fund (the Fund) owed no duty to defend or indemnify the District, arguing the circuit court erred in concluding (1) the policy exclusion relied upon by the Fund did not conflict with the provisions of the South Carolina Tort Claims Act, and (2) the Fund had no duty to defend or indemnify the District. We affirm.
In 2010, Coley Brown filed a complaint against the District for inverse condemnation, trespass, and negligence. The complaint alleged the District had installed a sewage force main and an air relief valve on Brown's street, and the valve released offensive odors on his property multiple times a day. Brown made repeated requests to the District to remedy the problem but, despite the District's attempts, the odor never subsided. The stench ultimately caused Brown to buy a new piece of property and move, but he was unable to sell the old property. The District tendered the complaint to the Fund pursuant to its insurance policy (the Policy), but the Fund denied coverage.
Pursuant to the Policy, the Fund is legally obligated to pay damages resulting from "[p]roperty [d]amage to which this applies caused by an occurrence." The policy defines "occurrence" as "an accident, including continuous or repeated exposure to conditions, which result[s] in personal injury or property damage neither expected nor intended from the standpoint of the insured."
The Policy defines property damage as:
(1) physical injury to or destruction of tangible property which occurs during the policy period, including the loss of use thereof at any time resulting therefrom, or
(2) loss of use of tangible property which has not been physically injured or destroyed provided such loss of use is caused by an occurrence during the policy period.
Pursuant to Exclusion (f) (the pollution exclusion), no coverage exists for:
. . . personal injury or property damage arising out of the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritant, contaminants or pollutants into or upon land, the atmosphere or any water course or body of water; but this exclusion does not apply if such discharge, dispersal, release or escape is sudden and accidental[.]
In March 2011, the Fund filed a complaint against the District seeking a declaratory judgment that the Fund had no duty to defend or indemnify the District in the Coley Brown matter. The Fund denied coverage based on the pollution exclusion as well as the Fund's position that the damages alleged by Brown did not qualify as "property damage" caused by an "occurrence." The District counterclaimed, seeking its own declaratory judgment that the Fund had a duty to defend and indemnify the District. In June 2011, the District and the Fund filed cross motions for summary judgment.
The circuit court held a non-jury trial in June 2012. The District's executive director and former maintenance superintendent, Larry Brazell, testified the force main at issue was installed in 1999 or 2000 and was approved by the Department of Health and Environmental Control (DHEC). The main was installed as part of a larger project that also included two nearby pump stations. The pump stations were designed to turn on and pump sewage through the force main when the sewage inside their collection wells reached a certain level. Brazell explained it was impossible to know when the pumps would turn on during a given day but posited that they could turn on once per hour or ten times per hour depending on the area's water usage or weather. Brazell ...