Aetna Insurance v. Aaron

HOLLANDER, Judge. In this case, we are called upon to decide whether the liability portion of a homeowner’s policy applies to the costs of preventative measures undertaken on the insured’s property in order to prevent damage to the property of a third party. Albert G. Aaron, appellee, instituted a declaratory judgment action against Aetna Insurance Company (“Aetna”), appellant, to determine whether Aetna is obligated to defend and indemnify him with regard to a suit instituted against Aaron by his condominium association. The Circuit Court for Baltimore City (Ward, J.) granted summary judgment in favor of Aaron.

On appeal, Aetna challenges that decision, asking us to consider the following questions: ⁴⁷⁶ 1. Did the trial court err in entering summary judgment in favor of Albert Aaron on the issue of the duty of Aetna to defend the claims brought against Albert Aaron by the Council of Unit Owners of the Warrington Condominium? 2. Did the trial court err in entering summary judgment in favor of Albert Aaron on the issue of the duty of Aetna to indemnify Mr. Aaron for any judgment entered against Mr. Aaron by the Council of Unit Owners of the Warrington Condominium? 3. Did the trial court err in ordering that Aetna was obligated to reimburse Mr. Aaron for all costs and expenses, including reasonable attorney’s fees, incurred by Mr. Aaron in bringing the declaratory judgment action and in defending the underlying lawsuit?

We conclude that the trial court properly determined that Aetna had a duty to defend Aaron. We also agree that, under certain circumstances, an insurer may be obligated to indemnify its insured for remediation expenses incurred in connection with the insured’s property. Accordingly, we shall affirm. Factual Summary In 1984, Aaron purchased Unit 1300 in The Warrington Condominium (the ‘Warrington”), located in Baltimore.

His unit, which included a large glass enclosure (the “Glass Enclosure”) installed around the balcony area, is located directly above Unit 1200. From approximately June 8, 1984 through at least June 8, 1989, Aetna issued a series of homeowner’s insurance policies to Aaron (hereinafter collectively referred to as the “Policy”), which provided first-party property coverage and liability insurance with respect to Aaron’s condominium unit. In particular, the Policy insured appellee against damage to his unit due to certain specified perils, and it provided coverage for certain claims asserted by third parties. The Policy stated, in pertinent part: If a claim is made or a suit is brought against any insured for damages because of bodily injury or property damage to which this coverage applies, we will: ⁴⁷⁷ a. pay up to our limit of liability for the damages for which the insured is legally liable; and b. provide a defense at our expense by counsel of our choice.

(Bold face in original.) The Policy defined “property damage” as “physical injury to or destruction of tangible property, including loss of use of this property.” The Policy also included the following “exclusion” as to coverage: 2. Coverage E — Personal Liability, does not apply to: $ $ ^ ^ ^ b. property damage to property owned by the insured; (Bold face in original). In 1985, Rita St. Clair, the owner of Unit 1200, first began to experience water leaks in her condominium. The common areas of the building were also plagued by intermittent water problems.

Between 1985 and 1993, various contractors attempted to resolve the leaks. Eventually, in 1993, it was determined that Aaron’s Glass Enclosure was the source of the problems. Consequently, the Council of Unit Owners of The Warrington (the “Council”) repaired appellee’s Glass Enclosure in order to prevent further leaks into St. Clair’s unit and the common areas. Thereafter, the Council filed suit against Aaron to recover the sum of $97,370.73, which represented the amount it expended to repair the Glass Enclosure.

The suit alleged that Aaron was contractually obligated to repair any part of his unit that caused damage to the property of others. Based on a theory of quantum meruit, the Council also contended that Aaron was responsible for the cost of the repairs. Aaron submitted the Council’s claim to Aetna, which declined coverage. In view of Aetna’s position, Aaron filed a declaratory judgment action against Aetna, seeking a determination of his rights under the Policy.

After some discovery was conducted, Aaron moved for summary judgment in the declaratory judgment action. In his motion, he contended that the undisputed facts established ⁴⁷⁸ that Aetna had an obligation to defend and indemnify him under the terms of the Policy and was thus also liable for his attorneys’ fees, costs, and expenses in connection with the declaratory judgment action. He relied on the Policy language, which provides protection for “a suit for damages” (i.e., the Council’s suit), instituted “because of ... property damage .... ” (i.e., the damage to Unit 1200 and the common areas). To support his assertion, he submitted a report dated September 30,1993 from an engineering firm retained by the Council, which concluded that water was leaking internally from the Glass Enclosure and “finding its way” to St. Clair’s unit and the common elements of the building.

Aaron further argued that the Council’s claim was not within the Policy’s exclusion for property that he owned (hereinafter, the “owned property exclusion”), because the repairs to the Glass Enclosure were necessary to prevent imminent damage to third-party property. Aaron asserted that the repairs were undertaken to alleviate a condition with respect to his property that did not present any problem to him, but was damaging St. Clair’s unit and the common areas. Alternatively, he argued that, if the factfinder in the Warring-ton suit determined that he did not even own the Glass Enclosure, then the owned property exclusion would not apply- In its opposition, Aetna asserted that material facts were in dispute, making summary judgment inappropriate. 1 Further, it contended that the Council’s claim was barred by the Policy’s owned property exclusion, and that the claim was not “for” property damage, as defined in the Policy. On August 9, 1995, the court issued an order granting ⁴⁷⁹ summary judgment in favor of Aaron. 2 The order stated, in part: [I]t is hereby determined that Aetna is liable to satisfy any judgment entered against Aaron in connection with the [Warrington suit] to the extent that the judgment is for (1) damages suffered by any third-party; (2) damages for the cost of investigating the source of the water leak into the condominium unit located below Aaron’s condominium unit; or (3) damages for the cost of making repairs or doing other work to stop the water leak or to prevent further damage to either the common elements of the condominium or the condominium unit located below Aaron’s unit;.... }J? ifc * * [I]t is hereby determined that Aetna shall not be liable to satisfy any judgment entered against Aaron in connection with the [Warrington suit] to the extent that the judgment is solely for property damage to property owned by Aaron, provided, however, that Aetna shall be liable for repairs to Aaron’s property that were made to stop the water leak or to prevent further damage to either the common elements of the condominium or the condominium unit located below Aaron’s unit;....

The court also concluded that Aetna was obligated to defend Aaron in the Warrington suit and to reimburse him for the costs and attorneys’ fees he incurred in connection with the declaratory judgment action. On appeal, Aetna contends that the trial court improperly “extended” the scope of the Policy’s coverage. It maintains that the Council did not assert a claim to recover “for” property damage sustained by a third party, and that the repairs to the Glass Enclosure do not constitute “property damage”, as defined in the Policy. Central to Aetna’s argument is its claim that the owned property exclusion bars ⁴⁸⁰ coverage under the Policy.

Aaron essentially renews the arguments he asserted below. Discussion I. Summary judgment is not a procedural shortcut to avoid a trial. Rather, it is an appropriate method of resolving cases, prior to trial, when the facts are undisputed. Seaboard Surety Company v. Richard F. Kline, Inc., 91 Md.App. 236 , 603 A.2d 1357 (1992).

To grant summary judgment, a trial court must determine that there are no material facts in dispute, and that one party is entitled to judgment as a matter of law. Md. Rule 2 — 501; see Beatty v. Trailmaster Products, Inc., 330 Md. 726, 737-38 , 625 A.2d 1005 (1993); Bagwell v. Peninsula Regional Med. Ctr., 106 Md.App. 470, 488 , 665 A.2d 297 (1995), cert. denied, 341 Md. 172 , 669 A.2d 1360 (1996); Bits “N” Bytes Computer Supplies, Inc. v. Chesapeake & Potomac Tel. Co., 97 Md.App. 557, 576-77 , 631 A.2d 485 (1993), cert. denied, 333 Md. 385 , 635 A.2d 425 (1994).

In the absence of disputed material facts, an appellate court will review the trial court’s grant of summary judgment to insure that the trial court reached the correct legal result. Beatty, 330 Md. at 737 , 625 A.2d 1005 ; Heat & Power Corp. v. Air Prods. & Chems., Inc., 320 Md. 584 , 578 A.2d 1202 (1990). To defeat a motion for summary judgment, the party opposing the motion must produce evidence demonstrating that there is a dispute as to material facts. Scroggins v. Dahne, 335 Md. 688 , 645 A.2d 1160 (1994).

A fact is material if the outcome of the case depends on how the factfinder resolves the disputed fact. King v. Bankerd, 303 Md. 98, 111 , 492 A.2d 608 (1985); Keesling v. State, 288 Md. 579, 583 , 420 A.2d 261 (1980); Miller v. Fairchild, 97 Md.App. 324, 340 , 629 A.2d 1293 , cert. denied, 333 Md. 172 , 634 A.2d 46 (1993). Moreover, the trial court must view all facts, and the possible inferences from the facts, in the light most favorable to the party opposing the motion. Bagwell, 106 Md.App. at 488 , 665 A.2d 297 . ⁴⁸¹ Applying summary judgment principles, we must resolve whether the trial court properly concluded that Aetna has a duty to defend and indemnify Aaron.

This task requires us to construe the scope of Aetna’s liability coverage, in order to determine if the Policy extends to expenses incurred by an insured to remediate a hazardous condition on the insured’s property, for the purpose of preventing imminent and further harm to third-party property. We think that it does. We conclude that, if Aaron’s property caused actual damage to property of another, and there was imminent risk of additional harm if preventative measures were not implemented, and the insured had a duty to remediate, then the Policy protects the insured for the fair and reasonable costs of necessary remedial measures, but only to the extent that the repairs were not merely to benefit the insured’s property. In reaching our conclusion, we focus first on the general principles that govern construction of insurance contracts.

The “duty to defend is broader than and different from the duty to pay.” Luppino v. Vigilant Ins. Co., 110 Md.App. 372, 381 , 677 A.2d 617 (1996). An insurer has a duty to defend its insured if the claim asserted against the insured is covered, or even potentially covered, by the applicable insurance policy. Chantel Assoc. v. Mt.

Vernon Fire Ins. Co., 338 Md. 131 , 656 A.2d 779 (1995); Aetna Casualty & Surety Co. v. Cochran, 337 Md. at 98, 651 A.2d 859 , (1995); St. Paul Fire & Marine Ins. v. Pryseski, 292 Md. 187 , 438 A.2d 282 (1981); Brohawn v. Transamerica Ins. Co., 276 Md. 396 , 347 A.2d 842 (1975); Reames v. State Farm Fire & Cas. Ins., 111 Md.App. 546, 560 , 683 A.2d 179 (1996).

We recently said that “the analysis concerning an insurer’s duty to defend a lawsuit filed against its insured ... is governed solely by evaluating the causes of action actually alleged by the plaintiff in that lawsuit, along with the relevant extrinsic evidence.” Reames, 111 Md.App. at 560 , 683 A.2d 179 ; see also Chantel, 338 Md. at 142 , 656 A.2d 779 (“[A]n insurer’s duty to defend is triggered when an examination of the policy, the complaint and appropriate extrinsic evidence discloses a potentiality of coverage under the insurance coverage.”); Cochran , 337 Md. at ⁴⁸² 107-12, 651 A.2d 859 . Thus, the duty to defend arises as long as the complaint against the insured alleges “action that is potentially covered by the policy, no matter how attenuated, frivolous, or illogical that allegation may be.” Sheets v. Brethren Mut. Ins. Co., 342 Md. 634, 643 , 679 A.2d 540 (1996) (italics in original).

In St. Paul Fire & Marine Ins. v. Pryseski, 292 Md. 187 , 438 A.2d 282 , the Court applied a two part test to determine if an underlying suit raises a potential for coverage under an insurance policy. The Court said: In determining whether a liability insurer has a duty to provide its insured with a defense in a tort suit, two types of questions ordinarily must be answered: (1) what is the coverage and what are the defenses under the terms and requirements of the insurance policy? (2) do the allegations in the tort action potentially bring the tort claim within the policy’s coverage? The first question focuses upon the language and requirements of the policy, and the second question focuses upon the allegations of the tort suit.

Pryseski, 292 Md. at 193 , 438 A.2d 282 . Applying the Pryseski test, we must determine the extent of coverage that the Policy affords to Aaron, and whether the allegations in the Council’s suit are potentially covered by the Policy. 3 Cochran, 337 Md. at 103-04 , 651 A.2d 859 . “Under Maryland law, when deciding the issue of coverage under an insurance policy, the primary principle of construction is to apply the terms of the insurance contract itself.” Bausch & Lomb, Inc. v. Utica Mut. Ins. Co., 330 Md. 758, 779 , 625 A.2d 1021 (1993).

We begin by examining the Policy itself. The law is well settled in Maryland that an insurance policy is interpreted just like any other contract. Collier v. MD-Individual Practice Ass’n, 327 Md. 1 , 607 A.2d 537 (1992); National Grange Mut. Ins.

Co. v. Pinkney, 284 Md. ⁴⁸³ 694, 399 A.2d 877 (1979); Bentz v. Mutual Fire, Marine & Inland Ins. Co., 83 Md.App. 524 , 575 A.2d 795 (1990). Therefore, courts in Maryland do not follow the rule that an insurance policy must be strictly construed against the insurer. Bausch & Lomb, 330 Md. at 779, 625 A.2d 1021 ; Cheney v. Bell National Life, 315 Md. 761, 766 , 556 A.2d 1135 (1989).

See also Hartford Acc. and Indem. Co. v. Scarlett Harbor Assoc. Ltd. Partnership, 109 Md.App. 217, 290 , 674 A.2d 106 , cert. granted, 343 Md. 334 , 681 A.2d 70 (1996). As with other contracts, a court must ascertain and effectuate the parties’ intentions by analyzing the terms of the agreement.

Bausch & Lomb, 330 Md. at 779, 625 A.2d 1021 ; Cochran, 337 Md. at 98 , 651 A.2d 859 ; Scarlett, 109 Md.App. at 290 , 674 A.2d 106 . The language of the contract is thus the “primary source” to determine the parties’ intentions. Scarlett, 109 Md.App. at 291 , 674 A.2d 106 . In construing the language in an insurance policy, courts accord the words their usual, ordinary, and accepted meaning, unless the parties intended to use the words in a technical sense.

Bausch & Lomb, 330 Md. at 779, 625 A.2d 1021 ; Cochran, 337 Md. at 104 , 651 A.2d 859 . A word’s usual, ordinary, and accepted meaning is determined by the meaning that a reasonably prudent layperson “would attach to the term.” Bausch & Lomb, 330 Md. at 781, 625 A.2d 1021 ; see also Pacific Indem. Co. v. Interstate Fire & Cas. Co., 302 Md. 383 , 488 A.2d 486 (1985).

Further, the court considers the policy as a whole in determining the intention of the parties. Nolt v. USF & G, 329 Md. 52 , 617 A.2d 578 (1993); Finci v. American Cas. Co. of Reading Pennsylvania, 323 Md. 358 , 593 A.2d 1069 (1991); Aetna Cas. and Sur. Co. v. Hartford Acc. & Indem.

Co., 74 Md.App. 539 , 539 A.2d 239 (1988). If the contractual language is clear and unambiguous, we presume that the parties meant what they actually said, regardless of what they may have actually intended. Scarlett, 109 Md.App. at 291 , 674 A.2d 106 . “Where the language of a contract is clear and unambiguous, there is no room for construction and we ‘must presume that the parties meant ⁴⁸⁴ what they expressed.’ ” Shapiro v. Massengill, 105 Md.App. 743 , 661 A.2d 202 , cert. denied, 341 Md. 28 , 668 A.2d 36 (1995) (quoting General Motors Acceptance Corp. v. Daniels, 303 Md. 254, 261-62 , 492 A.2d 1306 (1985)). Courts may consider extrinsic evidence as to the meaning of a policy term only if it is ambiguous.

Bausch & Lomb, 330 Md. at 779, 625 A.2d 1021 . With these principles in mind, we turn to an examination of the Policy and the parties’ claims. Aetna essentially denies any obligation to indemnify or defend Aaron, because the remedial measures were performed exclusively on Aaron’s own property, the preventative measures do not constitute damages in Aetna’s view, and the injured third party is not the one who has lodged the claim for damages. Aetna urges us to adopt a construction of the term “damages” that is limited to actual loss sustained directly by third party property.

Moreover, Aetna asserts that the Council's claim for reimbursement for the cost of repairs to the Glass Enclosure is not embodied within the Policy term “for damages”. Based on the owned property exclusion, Aetna would also foreclose protection for preventative measures undertaken on the insured’s property to avoid prospective harm to third-party property. . Conversely, Aaron asserts that the plain meaning of the words in the Policy necessarily includes coverage for repairs to the Glass Enclosure, because the claim is “for damages because of ... property damage.” Aaron also argues that the owned property exclusion does not preclude coverage for repairs to the insured’s property, if the repairs are made to prevent imminent damage to third-party property that has already sustained harm due to a dangerous condition on the insured’s property. In the area of environmental pollution, the issue of whether “response” costs or remediation expenses constitute “damages” has been extensively litigated.

Anderson Dev. Co. v. Travelers Indem. Co., 49 F.3d 1128, 1132 (6th Cir.1995). See also Maryland Cas.

Co. v. Wausau Chem. Corp., 809 F.Supp. 680, 690-1 (W.D.Wis.1992) (compiling cases). Similarly, nu ⁴⁸⁵ merous jurisdictions have considered whether an owned property exclusion forecloses recovery for the costs of environmental response measures employed on an insured’s own property. Allstate Ins.

Co. v. Quinn Constr. Co., 713 F.Supp. 35, 39-41 (D.Mass.1989). The results are by no means uniform or consistent. Figgie Int’l, Inc. v. Bailey, 25 F.3d 1267, 1273-74 (5th Cir.1994).

See New Jersey v. Signo Trading Int’l, Inc., 130 N.J. 51 , 612 A.2d 932 (1992). Compare Continental Ins. Cos. v. Northeastern Pharm. & Chem. Co., 842 F.2d 977 , cert. denied, 488 U.S. 821 , 109 S.Ct. 66 , 102 L.Ed.2d 43 (1988) (denying recovery for clean-up costs under Missouri law) with Independent Petrochemical Corp. v. Aetna Cas. & Sur.

Co., 944 F.2d 940, 946-7 (D.C.Cir.1991), cert. denied, 503 U.S. 1011 , 112 S.Ct. 1777 , 118 L.Ed.2d 435 (1992) (concluding, under Missouri law, that insured is entitled to recover). See also Kenneth Abraham, Environmental Liability and the Limits of Insurance, 88 Colum. L.Rev. 942, 966-70 (1988). In our review of these cases, it appears that, with certain limitations, environmental response costs are considered damages within the meaning of a comprehensive general liability policy.

Moreover, in order to protect third-party property from imminent harm, the overwhelming weight of authority favors coverage under such liability policies for remediation expenses incurred in connection with an insured’s own property, notwithstanding an owned property exclusion, when the concern is primarily addressed to the premises of a third party. See, e.g., Intel Corp. v. Hartford Acc. & Indem. Co., 952 F.2d 1551 (9th Cir.1991); Gerrish Corp. v. Universal Underwriters Ins. Co., 947 F.2d 1023 (2nd Cir.1991); South Carolina Ins.

Co. v. Coody, 813 F.Supp. 1570 (M.D.Ga.1993); Maryland Cas. Co., 809 F.Supp. at 696 ; Chemical Leaman Tank Lines, Inc. v. Aetna Cas. & Sur. Co., 788 F.Supp. 846 (D.N.J.1992); Claussen v. Aetna Cas. & Sur. Co., 754 F.Supp. 1576 (S.D.Ga.1990); Boyce Thompson Inst. for Plant Research, Inc. v. Insurance Co. of North America, 751 F.Supp. 1137 (S.D.N.Y.1990); Allstate Ins.

Co. v. Quinn Constr. Co., 713 F.Supp. 35, 40-41 (D.Mass.1989); Bankers Trust Co. v. Hartford Acc. Indem. Co., 518 F.Supp. 371, 374 , vacated to ⁴⁸⁶ permit submission of additional evidence, 621 F.Supp. 685 (S.D.N.Y.1981); City of Edgerton v. General Cas.

Co. of Wisconsin, 172 Wis.2d 518 , 493 N.W.2d 768 (1992). See also 7A J. Appleman, Insurance Law & Practice § 4526 (Supp. 1995) (“If the contamination has already damaged land belonging to persons other than the insured, the [owned property] exclusion does not bar coverage of any cleanup on the insured’s land necessary to prevent further migration to another’s property.”).

II

We focus first on Aetna’s duty to defend based on Aaron’s potential liability for damages. The Council’s damages allegedly resulted from the need to alleviate a hazardous or defective condition on. Aaron’s property that caused earlier damage to third-party property. Aetna’s interpretation of the Policy clause “for damages because of ... property damage” essentially would preclude recovery for the Council’s damages, because they are consequential damages flowing from damages to St. Clair’s property, not embodied within the clause.

In our view, repairs to prevent imminent and further damage, whether undertaken by the insured or another, are potentially a component or consequence of third-party property damage. Based on the plain meaning of the Policy language, the Council’s claim to recover for the cost of such repairs is a claim “for damages because of ... property damage.” What the court said in Diamond Shamrock Chemicals Co. v. Aetna Cas. & Sur. Co., 231 N.J.Super. 1 , 554 A.2d 1342 (1989), is pertinent here: The ‘owned property* exclusion does not purport to exclude claims because they are for sums expended for work performed within the premises owned by the insured. It excludes claims for sums which the insured is obligated to pay for ‘property damage to ... property owned ... by ... the insured.’ Claims arising out of injury to property of others for which the insured is responsible are covered by the terms of the policies even if the insured’s damages are ⁴⁸⁷ measured in part by the cost of remedial work which has to be performed on the insured’s own property. ^ There is no novelty to the proposition that in a conventional tort action, once some present injury has been proved, the plaintiffs damages may include the cost of measures intended to prevent future injury.

Id. at 12 , 554 A.2d at 1348 (emphasis added). The case of AIU Ins. Co. v. F.M.C. Corp., 51 Cal.3d 807 , 799 P.2d 1253 , 274 Cal.Rptr. 820 (1990), is also instructive. There, the court construed the phrase “because of property damage,” and concluded that all costs arising from the environmental contamination in issue occurred “because of’ property damage, without regard to whether the clean-up occurred on property of the insured or on property of third parties.

While the court determined that an insurer is not obligated to pay for prophylactic “measures taken in advance of any release of hazardous waste,” id. at 843 , 274 Cal.Rptr. at 846 , 799 P.2d at 1279 , the court said: “The provisions at issue here do not specify that coverage hinges on the nature or location of property damage. We therefore construe them to encompass damages because of property damage in general, regardless of by whom it is suffered.” Id. at 843 , 274 Cal.Rptr. at 846 , 799 P.2d at 1279 (emphasis added). We are also guided by the court’s analysis in City of Edgerton, 172 Wis.2d 518 , 493 N.W.2d 768 , which concerned the federal Environmental Protection Agency’s investigation of hazardous substances at a landfill. The court adopted a “common sense approach” with respect to whether remediation costs constitute damages.

Id. at 542 , 493 N.W.2d at 778 . Quoting Upjohn Co. v. Aetna Cas. and Sur. Co., 768 F.Supp. 1186, 1199-1200 (W.D.Mich.1990), the court said: [O]nce property damage is found as a result of environmental contamination, cleanup costs should be recoverable as sums that the insured was liable to pay as the result of property damage---- [T]he insured ought to be able to rely on the common sense expectation that property damage ⁴⁸⁸ within the meaning of the policy includes a claim which results in causing him to pay sums of money because his acts or omissions affected adversely third parties. While such claims might be characterized as seeking ‘equitable relief the [cleanup] costs are essentially compensatory damages for injury to common property and for that reason the [insurer] has a duty to defend---- [T]he short answer is that from the standpoint of the insured damages are being sought for injury to property.

It is that contractual understanding rather than some artificial and highly technical meaning of damages which ought to control. Edgerton, 172 Wis.2d at 543 , 493 N.W.2d at 778 (citations omitted). Nor is it of any moment that the Council, rather than Ms. St. Clair, instituted suit against Aaron, or that the Council, rather than Aaron, actually made the repairs. In Anderson Dev.

Co., 49 F.3d 1128 , for example, the insured instituted a declaratory judgment action against its insurer to obtain coverage for defense costs and indemnification as a result of a government mandated clean-up. What the court said is apt here: It is merely fortuitous from the standpoint of either plaintiff or defendant that the state has chosen to have plaintiff remedy the contamination problem, rather than choosing to incur the cost of clean-up itself and then suing plaintiff to recover those costs. The fact that the insured cooperates and assumes the obligation to conduct a clean-up, rather than forcing the EPA to incur the expenses of a clean-up and then bring a coercive suit, does not change the bottom line that a legal obligation exists. Id. at 1143 .

Therefore, unless the claim is barred by some other Policy provision, the damages in issue here potentially fall within the scope of the Policy. Given that the duty to defend is broader than the duty to indemnify, we are satisfied that the duty to defend here was unequivocally triggered when Aaron was sued by the Council for damages flowing from an alleged ⁴⁸⁹ defect in Aaron’s property that caused property damage to another. See Edgerton, 172 Wis.2d 518 , 493 N.W.2d 768 (1992); see also Anderson Dev. Co., 49 F.3d 1128 (holding that letter from EPA to insured was sufficient to trigger duty to defend).

III

We turn next to the effect of the owned property exclusion, which ordinarily bars an insured’s recovery for any costs incurred to repair the insured’s own property. As we observed earlier, many courts have considered the applicability of such a provision in the context of environmental cases. In Intel Corp. v. Hartford Acc. & Indent. Co., 952 F.2d 1551 (9th Cir.1991), the Ninth Circuit applied California law to construe an owned property exclusion, and determined that costs incurred to comply with a consent decree or an injunction mandating environmental cleanup, or to reimburse a government agency for cleanup expenses, constituted damages under the applicable insurance policy.

Id. at 1563-65 . The court concluded that the policy applied to expenses incurred “to mitigate any future damage that might occur ... whether or not on [the insured’s] own property.” Id. at 1565 . As the location of the source of the hazard was not dispositive, the court emphasized that the exclusion did “not bar coverage