Zurich American Insurance Company v. Whittier Properties Inc. D.B.A. Zipmart, and Ribelin Lowell & Company Insurance Brokers, Inc.

Whittier Properties, Inc. (“Whittier”) appeals the district court’s grant of Zurich American Insurance Company’s (“Zurich’s”) motion for summary judgment. The district court held as a matter of law that Whittier made a material misrepresentation on its insurance application for a policy provided by Zurich and that Zurich could therefore rescind the policy and deny coverage to Whittier. We reverse the district court’s determination that Zurich could rescind the policy and remand for further proceedings.

I. FACTUAL AND PROCEDURAL BACKGROUND

Beginning in 1990, Whittier owned and operated a ZipMart gas station and convenience store near Sterling, Alaska. The gas station initially utilized two 10,000-gallon underground storage tanks (“USTs”) in its operations. In September 1993, Whittier replaced the pipes servicing its UST system. During excavation for this procedure, the contractor encountered evidence of minimal contamination at tank fill pipes and beneath dispenser locations.

In August 1995, Whittier replaced its entire UST system, installing a new, 20,-000-gallon UST (“the new tank”) in place of the two smaller USTs. Again, the contractor encountered petroleum contamination,…