                           ILLINOIS OFFICIAL REPORTS
                                        Appellate Court




            Grinnell Mutual Reinsurance Co. v. Hubbs, 2013 IL App (3d) 110861




Appellate Court            GRINNELL MUTUAL REINSURANCE COMPANY, Plaintiffs-
Caption                    Appellees, v. LARRY HUBBS, LEEANN HUBBS, and JOHN
                           MERCER, Defendants-Appellants.


District & No.             Third District
                           Docket No. 3-11-0861


Rule 23 Order filed        March 25, 2013
Motion to publish
allowed                    April 24, 2013
Opinion filed              April 24, 2013


Held                       In an action seeking a declaratory judgment that the farm insurance
(Note: This syllabus       policies plaintiff issued to defendants excluded coverage for a neighbor’s
constitutes no part of     claim that the holding pond defendants constructed on their property
the opinion of the court   altered the water flow and level and caused damage to the neighbor’s
but has been prepared      property, the entry of summary judgment for the insurer was affirmed,
by the Reporter of         since the policy’s exclusion of coverage for damages resulting from the
Decisions for the          divergence or obstruction of surface water or interference with natural
convenience of the         drainage was clear and unambiguous, under Illinois law “drainage”
reader.)
                           applies to surface and subsurface drainage, and 21 acres of the neighbor’s
                           cropland were flooded after the construction of defendant’s pond.


Decision Under             Appeal from the Circuit Court of Henry County, No. 11-MR-21; the Hon.
Review                     Charles H. Stengel, Judge, presiding.


Judgment                   Affirmed.
Counsel on                 Thomas J. Potter, of Ludens Potter & Melton, of Morrison, for appellants
Appeal                     Larry Hubbs and Leeann Hubbs.

                           Bruce L. Carmen, of Carmen Law, of Cambridge, for appellant John
                           Mercer.

                           John W. Robertson, of Simpson Law Office, of Galesburg, for appellee.


Panel                      JUSTICE HOLDRIDGE delivered the judgment of the court, with
                           opinion.
                           Presiding Justice Wright and Justice Lytton concurred in the judgment
                           and opinion.


                                            OPINION

¶1          The plaintiff, Grinnell Mutual Reinsurance Company (Grinnell), brought an action for
        declaratory judgment in the circuit court of Henry County against defendants, Larry Hubbs
        and Leeann Hubbs (the insured), and John Mercer. Mercer had brought an action against the
        insured alleging damage to his cropland allegedly caused by the insured’s alteration of the
        flow and level of surface and groundwater following the insured’s construction of a holding
        pond on the insured’s property. At all pertinent times, Grinnell had in force certain farm
        insurance policies issued to the insured. The insured tendered Mercer’s claim to Grinnell for
        defense. By letter dated November 8, 2010, Grinnell denied coverage based upon the
        following policy exclusion:
            “We do not cover property damage resulting from diversion or obstruction of streams or
            surface water, or from interference with the natural drainage to or from the land of
            others.”
¶2          On March 14, 2001, Grinnell filed its complaint for declaratory judgment. Following
        discovery, Grinnell filed a motion for summary judgment in which it maintained that there
        was no genuine issue of material fact that the damage to Mercer’s cropland was caused by
        the insured’s construction of a weir (dam) to create a holding pond on their property which
        had the effect of raising the water table on Mercer’s property. The court entered summary
        judgment in favor of Grinnell, finding that the policy language was clear and unambiguous
        in excluding Mercer’s claim from coverage. The insured appealed, contending that: (1) the
        policy language is ambiguous and, thus, should be construed against Grinnell; (2) the trial
        court should not have considered any evidence other than the insurance policy; and (3) the
        court should have required Grinnell to defend the Mercer lawsuit under a reservation of
        rights. For the following reasons, we affirm the judgment of the circuit court.



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¶3                                      BACKGROUND
¶4        The following facts are taken from the record. The instant matter arose when the insured
     dredged a water retention pond and constructed the weir to hold back the water in the pond.1
     Mercer alleged in his complaint that the weir was constructed in part by dredging land on the
     northern border between his property and the insured’s property. Mercer alleged that the
     dredging caused the retention of ground and surface water on the insured’s property which,
     in turn, caused a substantial elevation of the groundwater table on Mercer’s property. Mercer
     further alleged that the increased elevation of the groundwater table resulted in flooding of
     a 21-acre tract of farmland on the southern edge of his property immediately adjacent to the
     insured’s property.
¶5        During discovery, Grinnell deposed Mercer’s two experts, Fred W. Lawrence, a
     hydrologist, and Robert G. Meyers, a surveyor. Lawrence testified that, in his professional
     opinion, a direct cause and effect relationship existed between the recently constructed weir
     on the insured’s property and the elevated water levels on Mercer’s property. Lawrence
     described the groundwater flow on Mercer’s property as “subsurface drainage” and opined
     that the weir and retention pond constructed on the insured’s property impeded the natural
     subsurface drainage on Mercer’s property. Meyers also opined that the weir interfered with
     the natural drainage patterns on Mercer’s property.

¶6                                          ANALYSIS
¶7       Summary judgment is proper if the pleadings, depositions and admissions on file,
     together with the affidavits, if any, show that there is no genuine issue as to any material fact
     and that the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c)
     (West 2008). The purpose of summary judgment is not to try a question of a fact, but simply
     to determine whether a genuine issue of triable fact exists. Watkins v. Schmitt, 172 Ill. 2d
     193, 203 (1996); Sameer v. Butt, 343 Ill. App. 3d 78, 85 (2003). In determining whether a
     genuine issue of material fact exists, a court must construe the pleadings, depositions,
     admissions, and affidavits strictly against the movant and liberally in favor of the opponent.
     Watkins, 172 Ill. 2d at 203; Sameer, 343 Ill. App. 3d at 85. We review summary judgment
     rulings de novo. Espinoza v. Elgin, Joliet & Eastern Ry. Co., 165 Ill. 2d 107, 113 (1995).
¶8       Illinois law has long recognized that insurance policies, including exclusionary
     provisions, will be applied as written unless they violate public policy. Founders Insurance
     Co. v. Munoz, 237 Ill. 2d 424, 433 (2010). The construction of an insurance policy is a
     question of law, which is also subject to de novo review. American States Insurance Co. v.
     Koloms, 177 Ill. 2d 473, 479 (1997).


             1
              The insured maintains that the retention pond had existed for several years and that work
     on the weir amounted to no more than repairs to an existing structure. Mercer’s complaint states that
     the construction of the weir and retention pond “within the last two years” gave rise to the
     underlying cause of action. We find nothing in the record to support the insured’s contention that
     the weir and retention pond were in existence prior to the actions which gave rise to Mercer’s
     complaint.

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¶9          The policy exclusion at issue in the instant matter is clear and unambiguous. The policy
       at issue excludes coverage for damages resulting from “divergence or obstruction of streams
       or surface water” or property damage resulting “from interference with the natural drainage
       to or from the land of others.” The insured maintains: (1) there is no proof in the record that
       the construction of the weir and retention pond “resulted” in damage to Mercer’s property;
       and (2) the term “drainage” in the exclusion is ambiguous since it could be read so as to
       apply only to “surface” drainage and not “subsurface” drainage. The insured further
       maintains that, if the construction of the weir and retention pond interfered with the drainage
       on Mercer’s property, it only impaired the “subsurface” drainage, and the policy can be read
       to provide coverage for Mercer’s alleged property damage.
¶ 10        This argument must fail as a matter of law. In Illinois, the term “drainage” applies to both
       surface and subsurface drainage patterns. Templeton v. Huss, 57 Ill. 2d 134, 141 (1974).
       Thus, as a matter of law, the term “drainage” in the instant policy exclusion must be read to
       include both surface and subsurface drainage. Even when viewing the pleadings and
       supporting attachments liberally in favor of the insured, we find that no genuine issue of
       material fact exists regarding whether the construction of the weir and retention pond caused
       a substantial elevation of the groundwater table on Mercer’s property which, in turn, impeded
       the subsurface flow of water and caused 21 acres of Mercer’s farmland to flood. The record
       established that 21 acres of Mercer’s farmland were flooded shortly after the construction of
       the weir and retaining pond on the insured’s property. The record also established that the
       flooded farmland was immediately adjacent to the insured’s property and near the weir and
       retaining pond. Moreover, there is nothing in the record to indicate that the land at issue was
       ever flooded prior to the construction of the weir and retaining pond. Finally, the record
       clearly established that construction of the weir and retention pond interfered with the natural
       drainage on Mercer’s land and resulted in damage to Mercer’s property. The insured’s
       response, that the term “drainage” does not include “subsurface drainage,” being contrary to
       law, does not hold water.
¶ 11        The insured also maintains that the trial court erred in considering the testimony of
       Lawrence and Meyers, arguing that a trial court may not consider any evidence beyond the
       four corners of the insurance policy when determining whether a duty to defend exists under
       the policy. Our supreme court has rejected that notion, holding that all evidence properly
       before the court may be considered when determining whether an insurance company has a
       duty to defend the insured under the policy. Pekin Insurance Co. v. Wilson, 237 Ill. 2d 446,
       460-61 (2010). Thus, it was appropriate to consider the testimony of these witnesses. We
       note, however, that Lawrence’s testimony arguably added little beyond the unrebutted facts
       alleged in the verified complaint, and the testimony of Meyers appears to be of little
       probative value. Nonetheless, we find no error in the trial court’s assigning some weight to
       this evidence.
¶ 12        The insured’s final argument is that Grinnell’s declaratory judgment should be denied
       since it can defend the claim under a reservation of rights. That argument lacks merit. It is
       well settled that an insurer may either seek a declaratory judgment or defend the suit against
       its insured under a reservation of rights. General Agents Insurance Co. of America, Inc. v.
       Midwest Sporting Goods Co., 215 Ill. 2d 146, 155 (2005). No authority has been offered to

                                                 -4-
       support the proposition that an insurer must defend a claim under a reservation of rights, nor
       has our research revealed any such authority.

¶ 13                                    CONCLUSION
¶ 14      For the foregoing reasons, we affirm the judgment of the circuit court of Henry County
       granting Grinnell’s motion for summary judgment.

¶ 15      Affirmed.




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