Dutton-Lainson Co. v. Continental Ins. Co.

after arrest during his own testimony. Thus, we fail to see how
Nesbitt was prejudiced by the prosecution’s comments regard
ing his silence.
CONCLUSION
Based on the evidence presented at the postconviction
evidentiary hearing, we conclude that the district court’s find
ing is not clearly erroneous and that trial counsel’s perform
ance was not ineffective. We therefore affirm the district
court’s ruling.
A ffirmed.
dutton-LAinson C ompAny, A nebrAskA CorporAtion,
AppeLLAnt And Cross -AppeLLee , v. the C ontinentAL
insurAnCe C ompAny, A CorporAtion, And northern
insurAnCe C ompAny of new york , A CorporAtion,
AppeLLees And Cross -AppeLLAnts.
778 N.W.2d 433
Filed February 5, 2010. 	No. S 09 164.
1. Breach of Contract: Damages. A suit for damages arising from breach of a
contract presents an action at law.
2. Insurance: Contracts: Appeal and Error. The interpretation of an insurance
policy is a question of law. In reviewing questions of law, an appellate court
resolves the question independently of the lower court’s conclusion.
3. Judgments: Appeal and Error. A trial court’s findings of fact will be upheld on
appeal unless clearly wrong.
4. Damages: Proof. While damages need not be proved with mathematical cer
tainty, neither can they be established by evidence which is speculative and
conjectural.
5. Prejudgment Interest: Appeal and Error. Whether prejudgment interest should
be awarded is reviewed de novo on appeal.
6. Prejudgment Interest. Prejudgment interest may be awarded only as provided in
Neb. Rev. Stat. § 45 103.02(2) (Reissue 2004).
7. ____. Under Neb. Rev. Stat. § 45 103.02(2) (Reissue 2004), prejudgment interest
is recoverable only when the claim is liquidated, that is, when there is no rea
sonable controversy as to the plaintiff’s right to recover and the amount of such
recovery. This determination requires a two pronged inquiry. There must be no
dispute as to the amount due and to the plaintiff’s right to recover.
8. Final Orders. As a general matter, where an order is clearly intended to serve as
a final adjudication of the rights and liabilities of the parties, the silence of the
dUTTONLAINSON CO. v. CONTINeNTAL INS. CO. 	365
Cite as 279 Neb. 365
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:48 AM CST

order on requests for relief not spoken to can be construed as a denial of those
requests under the circumstances.
9. Insurance: Contracts. The language of an insurance policy should be considered
in accordance with what a reasonable person in the position of the insured would
have understood it to mean.
10. Damages: Appeal and Error. The amount of damages to be awarded is a
determination solely for the fact finder, and the fact finder’s decision will not
be disturbed on appeal if it is supported by the evidence and bears a reasonable
relationship to the elements of the damages proved.
11. Insurance: Contracts: Words and Phrases. The term “accident” has many
meanings, and when used in a contract of indemnity insurance, unless otherwise
stipulated, it should be given the construction most favorable to the insured.
12. Trial: Witnesses. As the trier of fact, the trial judge determines the credibility of
the witnesses and the weight to give their testimony.
Appeal from the district Court for douglas County: peter
C. bAtAiLLon, Judge. Affirmed.
James W.R. Brown, Steven J. Olson, and Thomas R. Brown,
of Brown & Brown, P.C., L.L.O., for appellant.
Peter 	B. 	Kupelian 	and 	Carol 	G. 	Schley, 	of 	Kupelian,
Ormond & Magy, P.C., and Thomas J. Culhane, of erickson &
Sederstrom, P.C., for appellee Northern Insurance Company of
New York.
Robert S. Keith, of engles, Ketcham, Olson & Keith, P.C.,
and eileen King Bower and david Cutter, of Troutman Sanders,
L.L.P., for appellee The Continental Insurance Company.
heAviCAn, C.J., wright, gerrArd, mCC ormACk , and miLLer-
L ermAn, JJ.
wright, J.
INTROdUCTION
In the 1940’s, dutton Lainson Company (dutton) began a
manufacturing business in Hastings, Nebraska. dutton used
various solvents in its operations to clean machines and parts.
Beginning in 1985, the environmental Protection Agency (ePA)
required dutton to remediate environmental contamination on
its premises and other sites. dutton filed claims with its insur
ers, which denied coverage.
366 	279 NeBRASKA RePORTS

dutton 	sued 	The 	Continental 	Insurance 	Company
(Continental) and Northern Insurance Company of New York
(Northern), seeking indemnification for expenses related to
the ePA investigation and the resulting cleanup. The douglas
County district Court found that dutton had sustained total
damages of $3,801,521.70. The court applied a pro rata, time
on the risk allocation of damages and entered judgment for
dutton against Continental in the amount of $475,190.21 and
against Northern in the amount of $74,937.89. dutton has
appealed, and Continental and Northern have cross appealed.
We affirm.
SCOPe OF ReVIeW
[1] A suit for damages arising from breach of a contract
presents an action at law. Albert v. Heritage Admin. Servs., 277
Neb. 404, 763 N.W.2d 373 (2009).
[2] The interpretation of an insurance policy is a question of
law. In reviewing questions of law, an appellate court resolves
the question independently of the lower court’s conclusion.
Rickerl v. Farmers Ins. Exch., 277 Neb. 446, 763 N.W.2d
86 (2009).
FACTS
poLLution And epA
dutton’s manufacturing business used various solvents to
clean machines and parts. From approximately 1948 to 1971,
the cleaning solvents contained trichloroethylene (TCe), and
from approximately 1971 to 1985, the solvents contained
“1,1,1, trichloroethane” (TCA).
Between February 1962 and October 1964, dutton placed the
solvents and sludge filled degreaser fluid in sealed metal drums
that were deposited in a city operated landfill referred to as
the “North Landfill.” From October 1964 to July 1982, dutton
placed sludge from the degreaser and, prior to September 7,
1977, sludge filled solvent fluid in sealed metal containers and
deposited them in the city operated “South Landfill.”
After the drums and containers were deposited in the land
fills, they were either emptied by dutton employees or bull
dozed by the landfill operator and crushed, causing the sludge
dUTTONLAINSON CO. v. CONTINeNTAL INS. CO. 	367
Cite as 279 Neb. 365

and solvent to be released and allowing TCe and TCA to seep
into the soil and ground water at both sites. dutton’s deposits
in the North and South Landfills were in compliance with
then existing laws and ordinances for the disposition of these
solvents, and dutton did not anticipate that the solvents would
cause pollution of the soil or ground water.
In the early 1980’s, testing at a number of municipal wells
in Hastings revealed the presence of TCe. The ePA began an
investigation and, on September 23, 1985, notified dutton that
it was a potentially responsible party (PRP) for the cost of
cleaning up the contamination at the North and South Landfills
and the contamination that emanated from those sites.
In addition, between 1948 and 1987, dutton’s regular manu
facturing operations caused solvents containing TCe and TCA
to spill onto the concrete floor of its operating premises and
seep into the ground water beneath. The contaminants spread
via the ground water to adjacent property. The pollution ema
nating from such seepage was designated as “Well No. 3.”
Until dutton received a letter from the ePA dated November
5, 1992, dutton was unaware that the solvent was migrating
through the concrete floor and invading the soil and ground
water. The letter informed dutton that it was a PRP for the cost
of cleaning up the contamination at the Well No. 3 subsite and
the contamination that had emanated from that subsite.
On december 28, 2001, the ePA notified dutton that it
was a PRP for “Operable Unit 19,” which was an area wide
ground water contamination subsite allegedly contaminated by
leaching from the other subsites that had not been addressed
by other response actions. The polluted areas were eventually
designated as a single ePA “Superfund site,” made up of seven
distinct subsites.
The PRP notices generally gave dutton a specified period of
time to voluntarily undertake cleanup of the various subsites.
The notices stated that if no cleanup action was taken, the ePA
would design and implement its own plan and would collect
reimbursement from dutton if it were ultimately determined to
be a PRP.
Beginning August 14, 1998, consent decrees were entered
in the U.S. district Court for the district of Nebraska between
368 	279 NeBRASKA RePORTS

dutton and the ePA regarding cleanup of the various sub
sites. Pursuant to these decrees, dutton has conducted exten
sive cleanup and continues to address the contamination. The
cleanup is expected to continue until 2017.
insurAnCe history
Throughout its manufacturing operations, dutton carried
insurance policies with many different insurers, including United
States Fidelity and Guaranty Company (USF&G), empire Fire
and Marine Insurance Company (empire), Continental, and
Northern. Continental issued three primary general liability
policies: policy No. CBP415666 (apparently effective August 1,
1980, to August 1, 1983), policy No. CBP914504 (apparently
effective August 1, 1981, to August 1, 1984), and policy No.
CBP900212 (effective October 1, 1984, to October 1, 1987).
Northern issued a general liability policy, No. SM57686390,
for the period August 1 to October 1, 1983, and a second
policy, No. SM37686395, for the period October 1, 1983, to
October 1, 1986. This policy was canceled by dutton effective
October 1, 1984.
In November 1985, dutton notified Continental and Northern
of the ePA’s designation of dutton as a PRP for the North and
South Landfills. Northern responded that it did not believe any
“suit” within the meaning of the policy had yet been brought.
Therefore, Northern asserted that it was premature to determine
whether there was coverage and that the policy definitions of
“occurrence” and “property damage,” as well as other provi
sions, might limit coverage. Northern asked to be kept apprised
of the ePA’s investigation.
In February 1987, Continental sent dutton a strict reser
vation of rights, asserting that there was a good likelihood
that no coverage existed or that coverage was excluded by
Continental’s policies. dutton updated its notice to Continental
in 1991. In February 1992, Continental sent a letter to dutton
denying coverage for the claims.
On September 4, 2002, dutton sued USF&G, empire,
Continental, and Northern, seeking indemnification for sums
expended to defend against the ePA’s investigation and to con
duct the environmental cleanup, including future expenditures.
dUTTONLAINSON CO. v. CONTINeNTAL INS. CO. 	369
Cite as 279 Neb. 365

We affirmed the summary judgment entered in favor of USF&G
and empire, whose policies contained qualified pollution exclu
sions. See Dutton-Lainson Co. v. Continental Ins. Co., 271
Neb. 810, 716 N.W.2d 87 (2006) (Dutton I). We concluded that
dutton could not recover from USF&G and empire. However,
there were issues of fact precluding summary judgment as to
Continental and Northern. Thus, we reversed the judgment and
remanded the cause for further proceedings as to the policies
issued by Continental and Northern, which are the subject of
this appeal.
dutton sought judgment against Continental and Northern,
jointly and severally, in the sum of $4,854,231.49 plus interest
and attorney fees. After a trial, the court entered judgment in
favor of dutton and against Continental and Northern.
In allocating the damages, the trial court applied a pro rata,
time on the risk method. It divided dutton’s damages evenly
over the 40 year period from 1948 to 1987 during which con
taminants were deposited. The court found that the Continental
policies were in effect for 60 months and that Continental
provided coverage for all four sites. Continental’s share of the
time on the risk was calculated by dividing 60 months by 480
months, the total number of months the contaminants were
deposited. The court calculated Continental’s share as 12.5 per
cent of the total damages, for damages of $475,190.21.
The trial court concluded that Northern was liable for only
the North and South Landfills. It denied coverage for Well
No. 3 and Operable Unit 19 because of the late notice pro
vided by dutton. It found that Northern provided coverage
for 14 months and that its share of the relevant damages was
2.91666 percent. The court awarded $74,937.89 in damages
against Northern.
ASSIGNMeNTS OF eRROR
dutton assigns 18 errors which, summarized and restated,
allege that the trial court erred in (1) finding that Northern had
not waived notice with respect to Well No. 3 and Operable
Unit 19 and that Northern was prejudiced by the alleged lack
of notice, (2) finding that there was only one “occurrence” as
defined in the policies, (3) finding that dutton was not entitled
370 	279 NeBRASKA RePORTS

to recover employee costs of $1,031,836.99, (4) refusing to
allow dutton prejudgment interest, (5) not holding Continental
and Northern jointly and severally liable, (6) not entering
declaratory judgment that Continental and Northern were liable
for indemnity and defense costs for future remediation, and (7)
not allowing attorney fees.
Continental cross appealed, claiming that the trial court
erred in (1) finding that a PRP letter was a “suit” triggering a
duty to defend under Continental’s policies; (2) finding dutton
gave proper notice to Continental; and (3) its calculation of
damages by (a) not requiring dutton to prove that property
damage occurred within the Continental policy periods, (b)
adopting dutton’s categorization of damages, and (c) failing
to allocate damages through 2017, when the remediation is
expected to be complete.
Northern cross appealed, claiming that the trial court erred
in (1) finding that there was one occurrence and (2) determin
ing damages recoverable from Northern.
ANALYSIS
notiCe to northern
dutton argues that the trial court erred in its findings con
cerning notice given to Northern and in finding that Northern
was prejudiced by the alleged lack of notice.
The record shows that dutton first sent Northern a letter on
November 1, 1985, informing the insurer that dutton had been
notified it was a PRP for contamination of the North and South
Landfills. dutton stated that it would provide additional infor
mation as to any developments concerning dutton’s liability.
The policies set forth the insured’s duty as follows:
(a) In the event of an occurrence, written notice con
taining particulars sufficient to identify the insured and
also reasonably obtainable information with respect to the
time, place and circumstances thereof, and the names and
addresses of the injured and of available witnesses, shall
be given by or for the insured to the Company or any of
its authorized agents as soon as practicable.
The policies further provided that “[i]f claim is made or suit
is brought against the insured, the insured shall immediately
dUTTONLAINSON CO. v. CONTINeNTAL INS. CO. 	371
Cite as 279 Neb. 365

forward to the Company every demand, notice, summons or
other process received by him or his representative.”
Northern responded by letter of April 16, 1986, that no
“suit” within the meaning of the policy had been brought.
Thus, any determination as to coverage would be premature.
Northern stated that coverage for payments sought by future
litigation might be inconsistent with the definitions of “occur
rence” and “property damage” in the policies. Northern stated:
“We would appreciate, however, being kept apprised of the
progress of ePA’s investigation, and would welcome any future
information that you believe relevant.”
On August 12, 1986, Northern again wrote to dutton, stat
ing: “We . . . request that you kindly contact the undersigned as
soon as possible in writing regarding the above [ground water
contamination] matter. We would appreciate any status that you
may have regarding same, and any new developments which
may have taken place, which we are not aware of.” Northern
had no further contact until the lawsuit was filed by dutton in
September 2002.
In Dutton I, we stated that notice to Northern for the Well
No. 3 subsite would be excused if dutton could reasonably
have believed that further efforts at notification under the
policy would be useless. The trial court in the current case
found that dutton did not provide convincing evidence that it
believed further notice would be useless. dutton admitted that
any such notice was provided long after significant remediation
efforts had taken place and that, in fact, no notice was provided
until the lawsuit was filed in 2002, even though dutton learned
it was a PRP for Well No. 3 in 1992 and commenced remedia
tion efforts for Operable Unit 19 in 1998.
even if the notice given to Northern was not timely, the
insurer was also required to prove that it was prejudiced by
the late notice. “Prejudice is established by examining whether
the insurer received notice in time to meaningfully protect its
interests.” Dutton I, 271 Neb. at 828, 716 N.W.2d at 102. The
trial court concluded that Northern had shown actual preju
dice. The record showed that dutton voluntarily entered into
agreements acknowledging its responsibility for the contami
nation, spent significant sums to remediate, and performed the
372 	279 NeBRASKA RePORTS

remediation without giving Northern an opportunity to par
ticipate in discussions or formulate a course of action. Thus,
dutton had determined its obligations with the ePA before
Northern was even aware of the claims.
[3] We agree with the trial court. dutton determined its obli
gation with the ePA before Northern was aware of the claims,
and there was no evidence that dutton reasonably believed that
further notification to Northern would be useless. The court
found the failure to provide notice was an oversight of routine
corporate procedure. Based upon the record, the court found that
dutton gave no consideration to providing notice to Northern
and that dutton could not have reasonably believed such notice
would be useless. A trial court’s findings of fact will be upheld
on appeal unless clearly wrong. See Albert v. Heritage Admin.
Servs., 277 Neb. 404, 763 N.W.2d 373 (2009).
We conclude the trial court did not err in finding that
dutton’s failure to notify Northern was prejudicial. dutton
presented no evidence to justify its late notice to Northern.
Northern requested an update from dutton in 1986, and dutton
did not respond. The court correctly determined that Northern
was not required to provide coverage for Well No. 3 and
Operable Unit 19 and that dutton should not recover from
Northern any damages allegedly incurred in connection with
those two subsites.
number of oCCurrenCes
dutton argues that the trial court erred in finding that three
separate events constituted one occurrence. It argues that the
deposit of waste at the North and South Landfills and the
dripping of solvent onto the factory floor were separate occur
rences. The Northern policies limited property damage liability
to $100,000 per “occurrence,” and the Continental policies had
an “occurrence” limit of $1 million.
The policies provided: “The total liability of the company
for all damages because of all property damage sustained
by one or more persons or organizations as the result of any
one occurrence shall not exceed the limit of property dam-
age liability stated in the declarations as applicable to ‘each
occurrence.’”
dUTTONLAINSON CO. v. CONTINeNTAL INS. CO. 	373
Cite as 279 Neb. 365

We initially point out that if the trial court correctly appor
tioned the damages according to the number of months that
each policy provided coverage, the number of occurrences
would not change the award to dutton. Northern’s limits
were $100,000 per occurrence, and Continental’s limits were
$1 million per occurrence. Neither award ordered by the court
exceeded the limits of the policies for one occurrence.
dutton asserts that there was more than one occurrence.
It is, however, impossible for dutton to prove what damages
were sustained during the relative periods of coverage by
each insurer. The trial court’s application of a time on the
risk allocation is a reasonable apportionment of the damages
based upon one continuing occurrence. Should each event be
a separate occurrence, then the burden would be upon dutton
to establish the damages that resulted during the periods the
insurance policies were in effect. There was no evidence
to separate the amounts of damage that resulted from each
alleged occurrence.
The trial court found that dutton deposited contaminants in
the North Landfill from February 1962 through October 1964,
the South Landfill from October 1964 through September
1982, and Well No. 3 from 1948 to 1987. dutton offered
testimony from dr. Roy Spalding, a hydrologist who assisted
dutton in complying with the ePA directives at each of
the subsites.
Spalding testified that the TCe and TCA were the source
of dutton’s contribution to the contamination at the subsites
and that the contamination of ground water will continue until
remediation has been completed. Remediation is expected to
be completed at Well No. 3 in 2012 and at the North Landfill
by 2017. At trial, it was unknown when the remediation of
the South Landfill and Operable Unit 19 would be complete.
Spalding testified that it was impossible to determine the actual
amount of contamination that took place during any given time
period or to allocate expenses dutton incurred to any spe
cific period.
The trial court stated that in order to find there had been
three occurrences and require coverage for the costs of reme
diation, dutton’s actions that caused the damage would have
374 	279 NeBRASKA RePORTS

had to occur during the policy periods. The court noted that if
there were three occurrences, Continental and Northern could
not be responsible for contamination of the North Landfill,
because the contamination occurred between 1962 and 1964,
which was prior to the policy periods. The same would be true
of responsibility for contamination of the South Landfill, which
occurred between 1964 and 1982, because Northern’s policy
began in 1983. The court determined that the contamination
of all subsites occurred as a result of the continuous actions
of dutton and not as the result of three separate occurrences.
We agree.
The trial court relied on Sunoco, Inc. v. Illinois Nat. Ins.
Co., 226 Fed. Appx. 104 (3d Cir. 2007), in which the court was
asked to determine whether the insurance company had a duty
to defend when 77 lawsuits were filed against Sunoco, Inc.
The contamination caused by Sunoco’s product occurred in
different geographical regions and resulted in 77 claims from
a variety of sources that included gas tank leaks and accidental
spills. The federal court found that the injuries were caused by
one occurrence—the hazardous manufacture of gasoline con
taining the contaminant and failure to warn.
The federal court noted that its inquiry was “whether there
[was] ‘one proximate, uninterrupted and continuing cause
which resulted in all of the injuries and damage.’” Id. at 107.
The court referred to this as the “‘cause test,’” which requires
that “‘[a]s long as the injuries stem from one proximate cause
there is a single occurrence.’” Id., quoting Appalachian Ins.
Co. v. Liberty Mut. Ins. Co., 676 F.2d 56 (3d Cir. 1982).
The U.S. Court of Appeals for the Third Circuit has noted
that a majority of jurisdictions have adopted the cause test.
See Liberty Mut. Ins. Co. v. Treesdale, Inc., 418 F.3d 330 (3d
Cir. 2005). In that case, the court held that the sale and manu
facture of asbestos products by the insured over several years
constituted one occurrence. Another federal court held that a
gas company’s use of a product in its insulation program was
a single occurrence because “the number of occurrences turns
on the underlying cause of the property damage.” Colonial
Gas Co. v. Aetna Cas. & Sur. Co., 823 F. Supp. 975, 983 (d.
Mass. 1993).
dUTTONLAINSON CO. v. CONTINeNTAL INS. CO. 	375
Cite as 279 Neb. 365

In the case at bar, the trial court concluded that there was
one occurrence, which began with dutton’s actions in 1948 and
continued until 1987. An “occurrence” is defined in Northern’s
policies as “an accident, including continuous or repeated
exposure to conditions, which results in bodily injury or prop-
erty damage neither expected nor intended from the standpoint
of the insured.” The court determined that dutton deposited
the waste in compliance with then existing laws and did so
intentionally, even though it did not expect or intend to pollute
the ground water. The court found no ambiguity in the policies’
definition of the term “occurrence.”
Contamination occurred at four different sites, but all of
the contamination was caused by the actions of dutton. The
underlying cause of the damage was the use of TCe and TCA
in the manufacturing operation. This action was continuous
and repeated over a number of years. We conclude that the trial
court correctly determined that there was one occurrence.
empLoyee C osts
dutton also claims that the trial court erred in not allowing
dutton to recover employee costs of $1,031,836.99 for time
spent on the investigation and remediation of contamination.
The court determined that dutton did not provide sufficient
evidence of its employee costs and that the evidence provided
was obtained by guess and conjecture. dutton provided only a
general estimate of employee costs based on the percentage of
time certain employees worked on the ePA matter.
[4] While damages need not be proved with mathematical
certainty, neither can they be established by evidence which
is speculative and conjectural. Aon Consulting v. Midlands
Fin. Benefits, 275 Neb. 642, 748 N.W.2d 626 (2008). dutton
claims it should recover portions of its employees’ time spent
responding to the ePA requests and working on the pollution
remediation. As to the sufficiency of the evidence, we review
the trial court’s findings of fact for clear error. See Albert v.
Heritage Admin. Servs., 277 Neb. 404, 763 N.W.2d 373 (2009).
We conclude the court was not clearly wrong in denying the
employee costs.
376 	279 NeBRASKA RePORTS

dutton offered an exhibit prepared by dutton’s vice presi
dent and chief financial officer. He interviewed employees
about the amount of time they recalled spending on ePA
issues, but he was not able to obtain specific information for
each year. He then retrieved salary information for the employ
ees and multiplied salaries by the time they reported spend
ing on ePA matters. One of the employees had died in 1998,
and other employees had left employment with dutton by the
time the information was gathered. There were no timesheets
or other hourly reports on which to rely. The evidence of
employee costs was, as the trial court found, based on specu
lation and conjecture, and the court did not err in refusing to
award employee costs to dutton.
preJudgment interest
dutton assigns error in the trial court’s refusal to award
prejudgment interest. The trial court declined to award such
interest 	because 	the 	damages 	were 	in 	dispute 	and 	were
never certain.
[5 7] Whether prejudgment interest should be awarded is
reviewed de novo on appeal. Archbold v. Reifenrath, 274
Neb. 	894, 	744 	N.W.2d 	701 	(2008). 	Prejudgment 	inter
est may be awarded only as provided in Neb. Rev. Stat.
§ 45 103.02(2) (Reissue 2004). Archbold v. Reifenrath, supra.
Under § 45 103.02(2), prejudgment interest is recoverable
only when the claim is liquidated, that is, when there is no
reasonable controversy as to the plaintiff’s right to recover
and the amount of such recovery. This determination requires
a two pronged inquiry. There must be no dispute as to the
amount due and to the plaintiff’s right to recover. Archbold v.
Reifenrath, supra.
There was obviously a dispute as to whether dutton was
entitled to recover any damages and, if so, the amount. The trial
court did not err in refusing to award prejudgment interest.
J oint And severAL L iAbiLity
dutton next claims error in not holding Continental and
Northern jointly and severally liable. dutton seems to be arguing
that the trial court erred in applying a pro rata, time on the risk
dUTTONLAINSON CO. v. CONTINeNTAL INS. CO. 	377
Cite as 279 Neb. 365

allocation of the damages instead of requiring each insurer to
pay the total amount of the alleged damages. dutton provides
little case law to support this claim.
Continental and Northern both urge this court to find that the
trial court was correct in rejecting joint and several liability in
favor of a pro rata, time on the risk allocation. That method
assumes that the damages in a contamination case are
evenly distributed (or continuous) through each policy
period from the first point at which damages occurred to
the time of discovery, cleanup or whenever the last trig
gered policy period ended. each triggered policy therefore
bears a share of the total damages proportionate to the
number of years it was on the risk relative to the total
number of years of coverage triggered. . . . While such
an allocation scheme is attractive for its simplicity, we
recognize that damages are by nature fact dependent and
that trial courts must be given the flexibility to apportion
them in a manner befitting each case.
NSP v. Fidelity & Cas. Co. of New York, 523 N.W.2d 657, 663
(Minn. 1994).
The Minnesota Supreme Court has stated that “contamina
tion of the groundwater should be regarded as a continuous
process in which the property damage is evenly distributed over
the period of time from the first contamination to the end of the
last triggered policy (or self insured) period.” Id. at 664.
[T]he total amount of the property damage should be allo
cated to the various policies in proportion to the period of
time each was on the risk. If, for example, contamination
occurred over a period of 10 years, 1⁄10th of the damage
would be allocable to the period of time that a policy in
force for 1 year was on the risk and 3⁄10ths of the damage
would be allocable to the period of time a 3 year policy
was in force. The amount so determined does not, how
ever, necessarily represent the amount of the insurer’s
liability with respect to that policy.
Id.
We conclude that dutton cannot assert joint and several
liability without proving the amount of damages that resulted
during the periods of coverage provided by each insurer. There
378 	279 NeBRASKA RePORTS

were numerous insurers, and each policy represented a differ
ent time during the events from 1948 to 1987. If a time on the
risk allocation is not applied, then damages for each period of
policy coverage must be established by dutton.
dutton’s argument for joint and several liability would
equate liability for the entire occurrence even though the cov
erage under each policy was for a limited time. This does not
appear to be a reasonable assertion.
In Consolidated Edison Co. of NY v. Allstate, 98 N.Y.2d
208, 774 N.e.2d 687, 746 N.Y.S.2d 622 (2002), the court, in
rejecting the argument that insurers were jointly and severally
liable, concluded that joint and several allocation was not con
sistent with policy language providing indemnification for all
sums of liability that resulted from an accident or occurrence
during the policy period. Since there was one occurrence,
the damage allocated to each policy providing coverage was
based upon the amount of time that the policy was in force
during such occurrence. Other courts have found this to be a
fair manner in which to allocate coverage for the occurrence.
We agree.
Under the policies, the insurance companies were to provide
coverage for property damage that occurred during the policy
period. A pro rata, time on the risk allocation satisfies the lan
guage of the policies, and the trial court did not err in using
this method.
deCLArAtory Judgment
dutton argues that the trial court erred in failing to enter a
declaratory judgment finding that Continental and Northern
were liable for indemnity and defense costs incurred for future
remediation. dutton wants Continental and Northern to be held
“liable for all amounts required to be expended” by dutton
with respect to the North and South Landfills, Well No. 3, and
Operable Unit 19.
Continental argues that dutton is actually seeking an award
of future damages and that dutton failed to prove such dam
ages. during trial, Continental’s objections to dutton’s evi
dence about the possibility of future damages were sustained
and the court refused to allow testimony about future costs.
dUTTONLAINSON CO. v. CONTINeNTAL INS. CO. 	379
Cite as 279 Neb. 365

[8] The trial court made no ruling on future damages and did
not reserve for further determination the question of declara
tory relief. “As a general matter, where an order is clearly
intended to serve as a final adjudication of the rights and
liabilities of the parties, the silence of the order on requests
for relief not spoken to can be construed as a denial of those
requests under the circumstances.” D’Quaix v. Chadron State
College, 272 Neb. 859, 863, 725 N.W.2d 558, 561 (2007). The
court’s silence on the subject of declaratory relief, along with
its sustaining of objections to the introduction of testimony
concerning future damages, serves as a denial of dutton’s
request for declaratory judgment. The trial court did not err
in failing to grant declaratory relief, because dutton failed to
prove future expenses.
Attorney fees
Finally, dutton claims the trial court erred in failing to grant
attorney fees. The court’s order was silent on the issue of attor
ney fees.
Neb. Rev. Stat. § 44 359 (Reissue 2004) provides that in
an “action upon any type of insurance policy . . . against any
company, . . . the court, upon rendering judgment against
such company, . . . shall allow the plaintiff a reasonable sum
as an attorney’s fee.” However, “if the plaintiff fails to obtain
judgment for more than may have been offered by such com
pany, . . . in accordance with section 25 901, then the plaintiff
shall not recover the attorney’s fee provided by this section.”
§ 44 359.
Continental 	made 	an 	offer 	to 	confess 	judgment 	for
$748,828.88 before trial. dutton refused the offer, and judg
ment 	was 	entered 	against 	Continental 	for 	$475,190.21.
Northern made an offer to confess judgment before trial in
the amount of $445,000. dutton refused, and judgment was
entered against Northern for $74,937.89. The pretrial offers
were for more than the amount of the final judgment awarded
by the court.
We have stated that § 44 359 read in conjunction with Neb.
Rev. Stat. § 25 901 (Reissue 2008) “prohibit[s] an award of
attorney fees to a plaintiff, in a suit against the plaintiff’s
380 	279 NeBRASKA RePORTS

insurer, who rejects an offer of judgment and later fails to
recover more than the amount offered.” See Young v. Midwest
Fam. Mut. Ins. Co., 272 Neb. 385, 387, 722 N.W.2d 13, 16
(2006). dutton is not entitled to attorney fees in this case.
CONTINeNTAL’S CROSS APPeAL
suit versus CLAim
The trial court determined that the PRP letter of September
23, 1985, was akin to a “suit” and that the letter triggered
Continental’s duty to defend. Continental argues that the PRP
letter was not a “suit” and that because there was no “suit,”
Continental had no duty to defend. Continental asserts that its
policies differentiate between “claims” and “suits” and that the
duty to defend applies only to suits.
Continental argues that letters or administrative orders of
environmental agencies are not “suits” triggering a duty to
defend, relying on Foster-Gardner, Inc. v. Nat. Union Fire Ins.,
18 Cal. 4th 857, 959 P.2d 265, 77 Cal. Rptr. 2d 107 (1998). In
that case, the insured was ordered by the state ePA to remedi
ate pollution. The insured sued its insurers when they refused
to defend. The insurers argued that the word “suit,” as used
in the policies, meant “a civil action commenced by filing a
complaint. Anything short of this is a ‘claim.’” Id. at 878, 959
P.2d at 279, 77 Cal. Rptr. 2d at 121. The court stated that the
policies at issue required the insurers to defend a “suit” but
that the policies allowed discretion to investigate and settle
a “claim.”
Continental’s policy stated:
The company will pay on behalf of the insured all
sums which the insured shall become legally obligated to
pay as damages because of
A. bodily injury or
B. property damage
to which this insurance applies, caused by an occur-
rence, and the company shall have the right and duty
to defend any suit against the insured seeking damages
on account of such bodily injury or property damage,
even if any of the allegations of the suit are groundless,
dUTTONLAINSON CO. v. CONTINeNTAL INS. CO. 	381
Cite as 279 Neb. 365

false or fraudulent, and may make such investigation and
settlement of any claim or suit as it deems expedient, but
the company shall not be obligated to pay any claim or
judgment or to defend any suit after the applicable limit
of the company’s liability has been exhausted by payment
of judgments or settlements.
(emphasis supplied.)
The PRP letter from the ePA, dated September 23, 1985,
informed dutton that it was believed to be a party responsible
for contamination of landfills. The letter stated that if the
ePA used public funds to clean up the hazardous substances,
“responsible parties may be . . . liable for all costs incurred by
the government in responding to” the contamination. dutton
was directed to notify the ePA verbally by the close of busi
ness on October 1 and in writing by October 4 of the nature
and extent of the actions it was willing to undertake. If the
ePA did not receive the requested responses, it would assume
that dutton was declining to undertake the necessary response
actions at the site and the ePA would proceed to take any
action necessary.
The trial court determined that the PRP letter was a warn
ing to dutton that it could be responsible for the contamina
tion. dutton chose to accept responsibility for remediating the
contamination. If dutton had refused to take action, the ePA
could have proceeded with its investigation, and if the inves
tigation proved that dutton was responsible, then a suit would
have been initiated. The court noted that damages awarded as a
result of a suit could have been greater if dutton had not taken
steps to mitigate by cleaning up the contamination.
The trial court concluded that a PRP letter is akin to a
“suit,” based upon “the severity and significant repercussions”
if dutton took no action. It noted that insurance companies
such as Continental which insure for this type of damage have
common knowledge of the outcome when the ePA is involved
in addressing contaminations. The court relied on two cases:
Aetna Cas. and Sur. Co., Inc. v. Pintlar Corp., 948 F.2d 1507
(9th Cir. 1991), and Anderson Development Co. v. Travelers
Indem. Co., 49 F.3d 1128 (6th Cir. 1995).
382 	279 NeBRASKA RePORTS

In Aetna Cas. and Sur. Co., Inc. v. Pintlar Corp., 948 F.2d at
1517, the court held:
[T]he ePA’s administrative claims against the insureds
triggered insurers’ duty to defend. Coverage should not
depend on whether the ePA may choose to proceed
with its administrative remedies or go directly to litiga
tion. A fundamental goal of CeRCLA [Comprehensive
environmental Response, Compensation, and Liability Act
of 1980] is to encourage and facilitate voluntary settle
ments. Interim Guidance on Notice Letters, Negotiations,
and 	Information 	Exchange, 	ePA 	Memorandum, 	53
Fed.Reg. 5298 (1988). It is in the nation’s best interests
to have hazardous waste cleaned up effectively and effi
ciently. But the insured is not required to submit to, and
may in fact wish to oppose the threat. In either event, the
insurer’s duty to defend may well be triggered.
The federal court stated that a PRP notice differs from a
“garden variety demand letter” in that it carries “immediate and
severe implications,” rather than simply exposing a party to a
potential threat of future litigation. Aetna Cas. and Sur. Co.,
Inc. v. Pintlar Corp., 948 F.2d at 1516. “[T]he PRP’s substan
tive rights and ultimate liability are affected from the start of
the administrative process.” Id.
The court further noted that it may be “more prudent for
the PRP to undertake the environmental studies and cleanup
measures itself than to await the ePA’s subsequent suit in a
cost recovery action.” Id. at 1517. “Lack of cooperation may
expose the insured, and potentially its insurers, to much greater
liability, including the ePA’s litigation costs.” Id. As a result,
“an ‘ordinary person’ would believe that the receipt of a PRP
notice is the effective commencement of a ‘suit’ necessitating
a legal defense.” Id. “If the threat is clear then coverage should
be provided. The filing of an administrative claim is a clear
signal that legal action is at hand.” Id. at 1518.
In Anderson Development Co. v. Travelers Indem. Co., 49
F.3d at 1132, the federal court applied a recent Michigan case
in which the state court determined that a PRP letter “consti
tuted the initiation of a suit triggering [the insurer’s] duty to
dUTTONLAINSON CO. v. CONTINeNTAL INS. CO. 	383
Cite as 279 Neb. 365

defend.” The federal court agreed with the state court’s conclu
sion that a PRP letter issued by the ePA can be considered the
“functional equivalent of a ‘suit’ brought in a court of law.” Id.
at 1131.
Courts have reached differing conclusions as to what is
necessary to trigger a duty to defend. Some courts have held
that the receipt of a PRP letter invokes an insurer’s duty to
defend. In these cases, the courts have found the word “suit” to
be ambiguous and defined it broadly, taking into consideration
the perceived coercive impact of a PRP letter and the abil
ity of the ePA to enforce strict liability in actions under the
Comprehensive environmental Response, Compensation, and
Liability Act of 1980. See, e.g., Aetna Cas. and Sur. Co., Inc.
v. Pintlar Corp., 948 F.2d 1507 (9th Cir. 1991) (applying Idaho
law); A.Y. McDonald Industries v. INA, 475 N.W.2d 607 (Iowa
1991); Coakley v. Maine Bonding & Cas. Co., 136 N.H. 402,
618 A.2d 777 (1992).
Other courts have determined that the word “suit” should
be liberally interpreted in favor of the insured. These courts
looked at whether the ePA letters were coercive to determine
if a PRP letter or a notification letter from a state agency trig
gered the insurer’s duty to defend. See, e.g., Ryan v. Royal
Ins. Co. of America, 916 F.2d 731 (1st Cir. 1990); Professional
Rental v. Shelby Ins., 75 Ohio App. 3d 365, 599 N.e.2d
423 (1991).
Still other courts have determined that the word “suit” was
unambiguous and applied the plain meaning of the word.
As a result, they concluded that the commencement of some
action in a court of law was required before an insurer’s duty
to defend is triggered and that the issuance of a PRP letter
does not invoke the duty to defend. See, Ray Industries, Inc.
v. Liberty Mut. Ins. Co., 974 F.2d 754 (6th Cir. 1992) (rejected
by Anderson Development Co. v. Travelers Indem. Co., 49 F.3d
1128 (6th Cir. 1995)); Patrons Oxford Mut. Ins. Co. v. Marois,
573 A.2d 16 (Me. 1990); City of Edgerton v. General Cas. Co.,
184 Wis. 2d 750, 517 N.W.2d 463 (1994), overruled, Johnson
Controls v. Employers Ins., 264 Wis. 2d 60, 665 N.W.2d
257 (2003).
384 	279 NeBRASKA RePORTS

The interpretation of an insurance policy is a question of
law. In reviewing questions of law, an appellate court resolves
the question independently of the lower court’s conclusion.
Rickerl v. Farmers Ins. Exch., 277 Neb. 446, 763 N.W.2d 86
(2009). We agree with the rationale in Aetna Cas. and Sur. Co.,
Inc. v. Pintlar Corp., supra, and Anderson Development Co.
v. Travelers Indem. Co., supra. Whether an insurer is required
to provide coverage on a policy should not be dependent on
whether the ePA proceeds with administrative remedies or
files litigation. A PRP letter is the functional equivalent of a
“suit” as described in the insurance policies, and therefore,
the insurers had a duty to defend dutton. The PRP letter from
the ePA carried with it the ePA’s coercive powers. dutton
conducted an investigation to determine whether it was a
PRP and determined that it was. dutton proceeded to plan for
remediation and developed new methods in an attempt to save
further expense.
[9] The term “suit” can be readily understood to apply to
actions that are the functional equivalent of a suit filed in a
court of law. The PRP letter advised dutton that it was imme
diately at risk. If dutton declined the necessary response, its
substantive rights and ultimate liability were affected from
the receipt of the PRP letter. As noted in Aetna Cas. and Sur.
Co., Inc. v. Pintlar Corp., 948 F.2d 1507 (9th Cir. 1991), an
ordinary person would believe that the receipt of a PRP letter
was in effect the commencement of a suit. The language of an
insurance policy should be considered in accordance with what
a reasonable person in the position of the insured would have
understood it to mean. Dutton I. The threats of the letter were
clear and carried immediate implications. The trial court was
correct in finding there was a “suit.” Continental’s cross appeal
on this issue has no merit.
notiCe to C ontinentAL
Continental asserts that the trial court erred in finding
that dutton gave proper notice to Continental for two of the
subsites. The court found that dutton sent Continental a let
ter on November 1, 1985, informing the insurer about the
PRP letter from the ePA. On december 2, 1991, dutton sent
dUTTONLAINSON CO. v. CONTINeNTAL INS. CO. 	385
Cite as 279 Neb. 365

Continental a six page letter notifying it that the insurer had a
duty to defend. Continental responded by letter dated February
14, 1992, stating that it did not intend to take any action.
Continental’s denial of liability under the policy eliminated any
further requirement of notice. The trial court determined that
these contacts were sufficient to show that dutton provided
proper notice to Continental.
This finding by the trial court was a factual one. A trial
court’s findings of fact will be upheld on appeal unless clearly
wrong. See Albert v. Heritage Admin. Servs., 277 Neb. 404,
763 N.W.2d 373 (2009). The court’s finding was not clearly
wrong, and the record shows that Continental received suffi
cient notice.
ALLoCAtion of dAmAges
Continental also argues that the trial court erred in relieving
dutton of its burden to prove that property damage occurred
within the periods covered by the Continental policies and
in adopting dutton’s categorization of damages. This argu
ment relates to the court’s use of the pro rata, time on the risk
method to allocate damages.
[10] The amount of damages to be awarded is a determina
tion solely for the fact finder, and the fact finder’s decision will
not be disturbed on appeal if it is supported by the evidence
and bears a reasonable relationship to the elements of the dam
ages proved. Aon Consulting v. Midlands Fin. Benefits, 275
Neb. 642, 748 N.W.2d 626 (2008). We have previously deter
mined that the method of allocation of damages used by the
trial court was appropriate.
Continental also claims the trial court erred in failing to
allocate damages from 1948, when the contamination alleg
edly began, to 2017, when the remediation is expected to be
complete. We have previously discussed dutton’s request for
declaratory relief, which was in effect a request for future dam
ages, and we found no basis for such relief.
The trial court determined that Continental had provided
coverage for 60 months of the 480 month period over which
damages occurred. The court fixed Continental’s percentage at
12.5 percent. In its brief, Continental calls this court’s attention
386 	279 NeBRASKA RePORTS

to the fact that it actually provided coverage for 74 months,
which would in effect increase its potential liability. However,
it asks this court to find that the damages should be spread
over the entire period of 1948 to 2017, when remediation is
expected to be complete. Continental suggests its coverage
period of 74 months should be divided by the entire period to
find its percentage of liability to be 8.8 percent, which would
decrease its amount of liability.
We conclude that the trial court correctly limited the time
of the occurrence to the period during which the contami
nants were deposited, as opposed to the estimated time for the
cleanup. This allocates the time on the risk to the period of
the occurrence.
As to the fact that Continental may have had 74 months of
coverage instead of 60, we note that dutton did not assign this
as error on appeal.
NORTHeRN’S CROSS APPeAL
oCCurrenCe
Northern’s cross appeal asserts that the trial court erred in
finding there was an “occurrence” as defined by Northern’s
policies. Citing Farr v. Designer Phosphate & Premix Internat.,
253 Neb. 201, 570 N.W.2d 320 (1997), Northern argues that in
order to show there was an occurrence that was covered under
the insurance policies, dutton must have proved there was an
accident and property damage from the accident that was nei
ther expected nor intended. We conclude the court did not err
in finding an occurrence within Northern’s policies.
In City of Kimball v. St. Paul Fire & Marine Ins. Co., 190
Neb. 152, 206 N.W.2d 632 (1973), this court was asked to
determine whether damages from seepage of a sewage lagoon
system were covered as an accident. We noted that “‘[i]n the
absence of any express policy provision in such respect, the
inability to fix the exact time when and where an accident
occurred does not preclude recovery under the policy.’” Id. at
161, 206 N.W.2d at 637. We determined that an accident may
be a process. “When the accident is a process, how long then is
not significant. It is the nature of the process which is impor
tant.” Id.
dUTTONLAINSON CO. v. CONTINeNTAL INS. CO. 	387
Cite as 279 Neb. 365

[11] Courts have had difficulty in precisely defining the
word “accident.” In most jurisdictions, courts have held that
the word has no technical meaning in law, but should be inter
preted in its ordinary and popular sense. City of Kimball v. St.
Paul Fire & Marine Ins. Co., supra. The term “accident” has
many meanings, and when used in a contract of indemnity
insurance, unless otherwise stipulated, it should be given the
construction most favorable to the insured. Id.
Northern’s policies defined an “occurrence” as an accident,
which includes continuous or repeated exposure to conditions.
As the trial court concluded, the property damage occurred
as a result of exposure to the continuous deposit of sludge
or pollution in the landfills and on the manufacturing plant
floor. dutton did not expect or intend the resulting damage.
Construing the term “accident” most favorably to dutton, we
conclude that the trial court did not err in finding there was
an occurrence.
dAmAges
[12] Northern also argues that the trial court erred in sev
eral ways in determining damages. First, the court allegedly
did not scrutinize the evidence offered by dutton as to the
amount of damages it sustained. As noted earlier, it is for
the fact finder to determine the amount of damages and that
determination will not be disturbed on appeal if it is sup
ported by the evidence and bears a reasonable relationship
to the elements of the damages proved. See Aon Consulting
v. Midlands Fin. Benefits, 275 Neb. 642, 748 N.W.2d 626
(2008). Northern merely complains that the amount of dam
ages claimed by dutton was speculative because the amounts
were not consistent. Northern claims the testimony was in
conflict. As the trier of fact, the trial judge determines the
credibility of the witnesses and the weight to give their tes
timony. Risor v. Nebraska Boiler, 277 Neb. 679, 765 N.W.2d
170 (2009).
Second, Northern objects to the trial court’s failure to deter
mine which portions of dutton’s damages were defense costs
and which were indemnity costs. The court found that the total
indemnity costs were $919,983.03 and that the total defense
388 	279 NeBRASKA RePORTS

costs were $2,881,538.67. The court noted that defense costs
are those costs necessary to determine the source of the con
tamination and to defeat or minimize liability to clean up the
contamination. Indemnity costs are those costs incurred by
dutton to clean up the contamination.
Northern complains that the trial court merely accepted
dutton’s figures at face value and did not provide a detailed
analysis. However, the court excluded those damages (employee
costs) which were not supported by the evidence and allowed
those that were supported. Nebraska law only requires a plain
tiff to prove his or her damages to a reasonable certainty; it
does not require proof beyond all reasonable doubt. Eicher v.
Mid America Fin. Invest. Corp., 275 Neb. 462, 748 N.W.2d 1
(2008). Northern provides no legal support for its contention,
and we find no error in the trial court’s determination.
Third, Northern claims the trial court erred in receiving into
evidence dutton’s exhibit to support its claim for employee
costs. The court determined that the evidence of employee
costs related to the ePA matters was based upon guess and
conjecture, and it refused to award damages for these costs.
Thus, Northern was not prejudiced by this claim of error.
Fourth, Northern asserts that the trial court used the incor
rect end date of 1987 in its time on the risk allocation, rather
than 2017, the expected end date of remediation. We have
addressed this argument above, and there is no merit to
this claim.
Finally, Northern argues that the trial court erred in allowing
dutton to recover damages incurred prior to its first notice to
Northern. We have determined that Northern was not preju
diced by the timing of the notice it received from dutton, and
this claim also lacks merit.
CONCLUSION
The trial court did not err in its judgment, and it is
affirmed.
A ffirmed.
C onnoLLy and stephAn, JJ., not participating.
dUTTONLAINSON CO. v. CONTINeNTAL INS. CO. 	389
Cite as 279 Neb. 365