Upjohn Co. v. New Hampshire Insurance

476 N.W.2d 392, 438 Mich. 197

Opinions

Riley, J.

In this case, we are asked to interpret and apply the pollution-exclusion clause found in the comprehensive general liability policy of All state Insurance Company.¹ The resolution of this issue requires us to answer two questions: (1) is the phrase "sudden and accidental” which appears in the pollution-exclusion clause and which creates an exception to the exclusion, unambiguous, and (2), if unambiguous, what is the proper meaning of the phrase "sudden and accidental.”

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.

Each weekday of the year, an Upjohn employee measured the level of by-product in the tank. The employee recorded the measurement on a tank farm inventory sheet and turned the sheet over to his supervisor. Each day’s sheet was reviewed, and compared with previous days’ sheets which were kept on file at the umc facility. This was Upjohn’s standard procedure.

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-129.²

On September 3, 1982, Upjohn completed its monthly audit of the tank-level inventory records. Since the tank-level measurements did not coincide with what was intended to be in tank fa-129, no additional quantities of the by-product were pumped into the tank.

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 January 11, 1985, Upjohn³ filed suit against defendant Allstate Insurance Company,⁴ claiming that Upjohn was covered under Allstate’s comprehensive general liability policy for damages and expenses arising out of the leaking underground storage 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 NW2d 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 NW2d 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.

Footnotes

•

5

II. ANALYSIS

The Allstate Comprehensive General Liability Policy is subject to several exclusions which limit the broad coverage otherwise provided under the policy.⁶ The policy’s pollution exclusion provides:

This policy shall not apply:—

* * *

(f) to bodily injury or property damage arising out of the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalies, toxic chemicals, liquids or gaseous waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any watercourse or body of water; but this exclusion does not apply if such discharge, dispersal, release or escape is sudden and accidental.

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 NW2d 734 (1989) (opinion of Riley, C.J.). We cannot create an ambiguity where none exists. Edgar’s Warehouse, Inc v United States Fidelity & Guaranty Co, 375 Mich 598; 134 NW2d 746 (1965). Similarly, 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 NW2d 815 (1962). If the language of the° policy is unambiguous, it must be considered "in its plain and easily understood sense.” 432 Mich 710. See Wertman v Michigan Mutual Liability Co, 267 Mich 508, 510; 255 NW 418 (1934).

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 F2d 31 (CA 6, 1988); United States Fidelity & Guaranty Co v Murray Ohio Mfg Co, 875 F2d 868 (CA 6, 1989); FL Aerospace v Aetna Casualty & Surety Co, 897 F2d 214 (CA 6, 1990).⁷

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]ccur-ring unexpectedly and unintentionally; by chance.” The American Heritage Dictionary: Second College Edition, p 72. We, therefore, reject the definition of "sudden and accidental” as set forth by the Michigan Court of Appeals in Jonesville. Thus, we find that the terms "sudden” and "accidental” used in the pollution-exclusion clause are unambiguous.⁸

Having concluded that the phrase "sudden and accidental” is not ambiguous, we now turn to the proper application of the pollution-exclusion clause.

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.⁹

Each weekday of the year, tank-level measurements were taken by an Upjohn employee for all the tanks in the tank farm. The employee used a calibrated stick to measure the level of material in each tank. The employee then recorded the measurement of each tank on the tank farm inventory sheet for that day. This sheet was then turned into the employee’s supervisor. Each day’s sheet was reviewed and compared with previous days’ sheets which were kept on file at the umc facility. Umc has record retention schedules on all such information. These tank-level measurements were taken to determine what the level of material was in each tank and, thus, when each tank was full and needed to be emptied for disposal purposes. Such information indicated when a tank was too full to allow another batch of material to be pumped into it.

Prior to August 16, 1982, the daily tank-level measurements for tank pa-129 remained constant at ten inches or 475 gallons. This is consistent with the fact that when tank fa-129 was not being actively used, as was the case before August 16, 1982, there is an accumulation of ten inches of material or 475 gallons in the tank because that is about all that is capable of being pumped out of the tank. On August 16, 1982, the same day that the first batch of seventeen hundred gallons of byproduct was received, the tank-level measurement was three inches or eighty gallons. Despite this discrepancy, Upjohn continued its production of clindamycin and added eight more batches, approximately 13,600 gallons, of the by-product to the ten thousand gallon tank. The tank level measurements taken from August 16, 1982, until early September 1982, when tank fa-129 was removed from active use, reflected that there was an unaccounted loss of the by-product.

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 was a release of the by-product from tank fa-129 until a monthly audit of tank levels that was completed in early September 1982 indicated a leak. During this audit all the previously recorded and reviewed tank farm inventory sheets were reviewed by Upjohn’s accounting people. It is Upjohn’s contention that only after all relevant figures were compared, that umc could even have expected that by-product was missing from Upjohn’s production and storage system. Upjohn claims that the unusually low tank-level measurement for tank fa-129 taken on August 16, 1982, did not lead them to expect that chemical byproduct was escaping from the tank because reduced tank levels did not themselves indicate a leak in the tank. Upjohn claims that the byproduct could have been accidentally or intentionally diverted to other tanks, production could have been interrupted, or materials could have been intentionally removed from the tank for disposal.

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-129.¹⁰ Furthermore, we find that Upjohn had sufficient information available to it to expect that such release of the by-product was occurring and would continue to occur until they stopped using the tank.¹¹

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:

A corporation can only act through its employees and, consequently, the acts of its employees, within the scope of their employment, constitute the acts of the corporation. Likewise, knowledge acquired by employees within the scope of their employment is imputed to the corporation. In consequence, a corporation cannot 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. Rather, the corporation is considered to have acquired the collective knowl edge of its employees and is held responsible for their failure to act accordingly.

The Michigan Court of Appeals adopted this reasoning in People v American Medical Centers of Michigan, Ltd, 118 Mich App 135; 324 NW2d 782 (1982).

In Gordon Sel-Way, Inc v Spence Bros, Inc, 177 Mich App 116, 124; 440 NW2d 907 (1989),¹² the Court recognized that "the combined knowledge of employees may be imputed to a corporation” and stated:

We agree with this rule and adopt the standard for imputed collective knowledge set forth in Copeman Laboratories Co v General Motors Corp, 36 F Supp 755, 762 (ED Mich, 1941):

"When a person representing a corporation is doing a thing which is in connection with and pertinent to that part of the corporation business which he is employed, or authorized or selected to do, then that which is learned or done by that person pursuant thereto is in the knowledge of the corporation. The knowledge possessed by a corporation about a particular thing is the sum total of all the knowledge which its officers and agents, who are authorized and charged with the doing of the particular thing acquire, while acting under and within the scope of their authority.” [Id. at 124-125.]

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 chemi cal by-product from tank fa-129 was expected by the Upjohn Company.¹³

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.¹⁴ Rather, the Upjohn Company is consid ered to have acquired the collective knowledge of its employees, the same collective knowledge which the monthly audit revealed was available to Upjohn as early as August 16, 1982. Therefore, Upjohn must be held to have expected the release of by-product from tank fa-129 as early as August 16, 1982.

Since the release of chemical by-product was not unexpected, as a matter of law it cannot be "sudden and accidental.”¹⁵ Therefore, the pollution- exclusion clause does apply, and the Upjohn Company is not entitled to coverage under the Allstate Insurance Company policy. Accordingly, we reverse the decision of the Court of Appeals.

Boyle, Griffin, and Mallett, JJ., concurred with Riley, J.

1

The Allstate Insurance Company asked this Court to. consider three other issues along with the pollution exclusion. These issues were as follows: (1) whether there was an "occurrence” under the policy; (2) whether recovery costs are "damages”; and (3) whether an "other insurance” clause in the policy was applicable. However, this Court limited the scope of the granted issues to the interpretation and application of the pollution-exclusion clause by an order dated December 27, 1990.

2

The data from the tank-level measurements were as follows:

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 10.5 585

20 16 511

21 - -

22 - -

^ co oo co ho <!

24 8 342

tH io iq o io

26 8 342

27 8 342

28 - -

29 - -

375 Aug. 30 io oo

903 31 iq w

1,794 Sept. 1 w

1,167 2 iq co

511 3 iq o

4 - -

5 - -

Sept. 6 - -

7 7.5 312

8 25 1,794**

9

10

First Distillate Received

•

Partially Filled [With] Water for Washing

3

Upjohn commenced this action, along with subrogated property insurers who are no longer parties in this action.

4

Upjohn also brought suit against several other liability insurers who are no longer parties in this action.

5

435 Mich 862 (1990).

6

Justice Levin, in his dissent, argues that the drafting history of the pollution-exclusion clause supports the proposition that the exclusion does not limit coverage otherwise provided under the policy, but instead, merely clarifies existing coverage. Justice Levin states that "when a policy term is ambiguous, courts may look to extrinsic evidence of the term’s meaning. In this case, the extrinsic evidence— the drafting history of the pollution-exclusion clause — supports Upjohn’s claim for coverage under the cgl policy.” Post, pp 224-225. Furthermore, Justice Levin states:

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. By and large, those courts finding that the phrase is unambiguous do not address this history, even to the extent of acknowledging its existence.²⁷

[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 NW2d 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 NW2d 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 NJ 233, 237; 405 A2d 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 NW2d 440 (1982).

27

But see Lumbermens Mutual Casualty Co v Belleville Industries, Inc, 407 Mass 675, 682; 555 NE2d 568 (1990), where the Massachusetts Supreme Court found that the term "sudden” unambiguously carries a temporal component. Only after finding the term unambiguous did the court state that "[b]e-cause the word 'sudden’ in the pollution exclusion clause is not ambiguous, we have no need to consider the drafting history of that clause or any statements made by insurance company representatives concerning the intention of its drafters.

7

In his dissent, Justice Levin criticizes the majority for failing to further analyze the question of ambiguity. Post, p 223. However, the three cases cited in support of the majority’s conclusion that the terms of the pollution exclusion are unambiguous provide the reasoning, rationale, and analysis which the majority finds persuasive. Therefore, in citing those cases, we refer the reader of the majority opinion to the analysis in those cases. "Nothing would be gained by restating here what has been persuasively stated there.” New Hampshire Ins Co v H Brown Co, unpublished opinion of the Kent Circuit Court, decided September 27, 1989 (Docket No. 87-56314-CK), p 11.

8

Justice Levin, in his dissent, argues that the phrase "sudden and accidental” is susceptible to more than one reasonable interpretation or meaning. Further, he states that this being so, the phrase is ambiguous, as a matter of law, and that "[s]uch ambiguity is resolved in favor of the insured . . . Post, pp 224, 232.

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, 616; 286 NW 99 (1939), which states:

"An insurance policy is a contract and should be interpreted according to its plain meaning. The court is mindful of the rule of law that where the provisions of an insurance policy are uncertain or ambiguous, or the meaning is not clear, that those terms should be given such interpretation or construction as is most favorable to the insured. This rule does not mean, however, that the plain meaning of plain words should be perverted, or that a word or phrase, the meaning of which is specific and well recognized, should be given some alien construction merely for the purpose of benefiting the insured.”

See also Smith v Lumbermen’s Mutual Ins Co, 101 Mich App 78, 83; 300 NW2d 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, 165 Wis 2d 737; 456 NW2d 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 NW2d 815 (1962).

Second, Justice Levin claims that the fact that there has been "[sjuch 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.

9

Justice Levin, in his dissent, criticizes as inconsistent the majority’s focus on the expectancy component of the word "sudden” when applying the pollution-exclusion clause in this particular case. Justice Levin states:

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 thus resolves the issue solely on the basis of the "unexpected” component of the term "sudden,” despite its determination, following [Star Fire, supra], that "sudden” could not be defined without reference to its temporal component. [Post, p 232. Emphasis in original.]

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.”

10

The record in this case is undisputed that when the tank is not in use, there is an accumulation of ten inches or 475 gallons of byproduct in the tank because that is about all that is capable of being pumped out of the tank. In essence, even when the tank is empty, there should be 475 gallons of by-product in it. In fact, the record shows that prior to August 16, 1982, the tank-level measurements for tank fa-129 were constant at ten inches or 475 gallons.

11

Upjohn claims that the unusually low tank-level measurement for tank fa-129 taken on August 16, 1982, did not lead it to expect that chemical by-product was escaping from the tank because reduced tank levels did not themselves indicate a leak in the tank. Upjohn claims that the by-product could have been accidentally or intentionally diverted to other tanks, production could have been interrupted, or materials could have been intentionally removed from the tank for disposal.

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 byproduct 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.

12

This case is currently on appeal before this Court on a different issue.

13

Justice Levin, in his dissent, claims that the majority "fails to distinguish between raw data and 'knowledge.’ ” Post, p 233. He states that only on September 3, 1982, did Upjohn determine that a leak occurred. Id., p 234. He states that "the majority errs in finding that Upjohn must have known on the first day of the clindamycin manufacturing campaign that tank pa-129 was leaking. What Upjohn possessed between August 16 and September 13, 1982, was raw, unanalyzed data, not knowledge.” Id.

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.

14

Justice Levin, in his dissent, would like to. limit the imputed-collective-knowledge standard by holding that it is only applicable to information possessed by "employees at the appropriate level of responsibility . . . .” Post, p 234. Justice Levin attempts to support his limitation for so-called "appropriate” employees by citing Gordon, supra, which stated that "one of the burdens attendant upon the corporate form is that the law imputes the knowledge of individual officers and employees at a certain level of responsibility to the corporation.” Id., p 233. (Emphasis added.) He adds that "[t]his principle speaks to persons representing a corporation who, acting in the scope of their employment and authority, learn or do something on behalf of the corporation.” Id., pp 233-234.

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 US 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 pa-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.

15

Chief Justice Cavanagh, dissenting, argues that "having defined 'sudden’ to have a temporal element, it would seem prudent to determine the quickness with which this leak occurred.” Post, p 218. He states that if the leak developed quickly it could be declared "sudden.” Id. However, a leak, even if it developed quickly, could not be declared "sudden” if it were not also unexpected. Under the majority’s definition of sudden, with which Chief Justice Cavanagh agrees, a leak must be both quick and unexpected. See n 9. Therefore, it is not necessary, as Chief Justice Cavanagh suggests, to determine the quickness with which a leak occurred when it has been determined, as in the majority, that the leak was not unexpected.

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.