Aetna Casualty & Surety Co. v. Commonwealth

Opinion of the Court by

Justice SCOTT.

This appeal is from the judgment of the Court of Appeals, affirming the decision of the Jefferson Circuit Court, except on the jury instruction issue of fortuity. The Court of Appeals reversed on the issue of fortuity and remanded the matter for a new trial consistent with their opinion.

Six separate issues were raised on appeal and cross-appeal by the various parties. These include: (1) whether the Court of Appeals erred in setting aside the jury verdict; (2) whether ANI should be required to reimburse the insureds for the costs of participating in the CERCLA action; (3) whether the costs of site measures are paid “as damages because of property damages” within the meaning of the ANI policies; (4) whether exclusion (f) applies and therefore precludes coverage; (5) whether ANI’s policies cover the defense costs incurred in this action; and (6) whether the ANI policies were triggered for the full amount of the limits in effect at any time the property damage at issue was caused without pro-rating the liability.

We shall address all six issues argued, but first set forth the following summary of facts, taken largely from the list of sixty-eight stipulations compiled by the parties and the Court of Appeals Opinion:

Maxey Flats is a chemical and nuclear waste disposal facility located in eastern Fleming County which accepted waste from 1963 to 1977. Over this time period, approximately 4.75 million cubic feet of low-level radioactive waste was received and buried at the Maxey Flats facility. The waste originated from power plants, hospitals, universities, various industries, and government installations. Most of the waste transported to the Maxey Flats fa*834cility consisted of solid materials that were deposited in containers constructed of various materials including cardboard, wood and steel. Liquid wastes, including tritium, were also accepted at Maxey Plats from 1963 to 1972. Both solid and liquid radioactive waste was buried in trenches at Maxey Flats.

The use of trenches to bury waste was a permissible practice for disposing of low-level radioactive waste during the time period the Maxey Flats facility was open for the receipt of commercial waste.

Unfortunately, rain water penetrated the large, unlined trenches, mixed with the radioactive waste, and leached out underneath the trenches and beyond the facility.

In December, 1977, the Commonwealth of Kentucky (“Commonwealth”), as the primary regulatory authority with respect to the use and disposal of radioactive material in Kentucky, became alarmed at the level of radioactive contaminants migrating off-site. Accordingly, it issued an order suspending the facility’s license to accept additional waste. Thus, no commercial waste was received at the Maxey Flats facility after December 1977.

Atcor, Inc., Chem-Nuclear Systems, Inc. (“Chem-Nuclear”) and Hittman Nuclear & Development Corporation (“Hitt-man”) were in the business of transporting and/or arranging for the transportation of low level radioactive waste to licensed waste disposal sites throughout the United States. Hittman was acquired by Westinghouse Electric Corporation in 1982. In 1984, the name of the corporation was changed to Westinghouse Hittman Nuclear Incorporated.

Atcor and Chem-Nuclear never owned or operated the Maxey Flats facility. Neither Hittman, Westinghouse Electric Corporation nor Westinghouse Hittman Nuclear Incorporated (collectively “Hittman”) owned or operated the Maxey Flats facility while it was open and accepting commercial waste.

Aetna Casualty and Surety Company, and the other involved insurance companies (36 companies altogether) are members of the American Nuclear Insurers, or “ANI.” ANI is an unincorporated underwriting association, formed by conventional insurance carriers, which issues nuclear liability insurance policies.

ANI issued Policy NF-48 (FACILITY FORM) to U.S. Ecology (successor to NECO, original licensee of the Maxey Flats facility), the Commonwealth1 and Hittman corporation. These insureds purchased the ANI Facility Form to insure against nuclear energy hazard liability arising out of the ownership or operation of the Maxey Flats facility. The policy defines “Insured” broadly to include not only the named insured, but “any other person with respect to his legal liability for damages because of ... property damage caused by the nuclear energy hazard.”

ANI also issued separate “Supplier & Transporters Form” insurance policies (“S & T” Forms) to Chem-Nuclear, Atcor and Hittman Nuclear and Development Corporation. These policies provide coverage for nuclear energy hazard liability arising out of their waste transportation activities.

In 1986, the Environmental Protection Agency (“EPA”) placed the Maxey Flats facility on the National Priorities List. Pursuant to the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C § 9601 et seq., the EPA instituted administrative proceedings against the insureds for' the cleanup of the contaminated site and the abatement of the effects of the contamination. The initial step in such proceedings took place November 26, 1986 when the EPA sent notices by certified mail to approximately 832 Potentially Responsible *835Parties .(“PRPs”) who had owned or operated the Maxey Flats facility, or who had transported or arranged for the transportation of waste to the facility. These entities included Atcor, Chem-Nuclear, U.S. Ecology, the Kentucky Natural Resources and Environmental Protection .Cabinet and Westinghouse Electric Corporation on behalf of Hittman.

When the insureds notified ANI of the EPA’s PRP notices, ANI refused to defend or indemnify them in the CERCLA action. Therefore, the insureds were forced to deal with the EPA on their own. Subsequently, in 1987 the PRPs agreed to a consent order with the EPA obligating them to perform a “Remedial Investigation and Feasibility Study” (“Feasibility Study”) to determine the nature and extent of the property damage, and to evaluate alternative remediation programs for its correction or containment. The study was completed at a cost of over $5,000,000. Following submission of the Feasibility Study, the EPA issued a Record of Decision which incorporated parts of this Feasibility Study in a clean-up remedy for the insureds to implement at Maxey Flats. The remedial plan had an estimated cost of implementation in excess of $57,000,000. The insureds ultimately settled the EPA’s claims and the settlement is contained in a consent decree filed with the United States District Court for the Eastern District of Kentucky in July 1995.

Meanwhile, in April 1987, ANI, having refused to defend, filed a declaratory judgment action in the Jefferson Circuit Court seeking to establish no coverage liability. Counterclaims were made by the insureds for coverage under the policies and money damages for ANI’s breach of contractual duties to defend and indemnify them.

Following discovery, all parties filed cross-motions for summary judgment. On January 4, 1995, the Jefferson Circuit Court entered a partial summary judgment in favor of. the insureds, holding (1) the response costs required to remediate the site were “damages” within the meaning of the policy and (2) the contamination of off-site property constituted “property damage” as defined by the policies. Thereafter, the Court summarily ruled that ANI’s duty to defend the appellees had been triggered by the EPA’s notice of CERCLA proceedings (the PRP notice letters).

ANI’s defense to coverage, applicable to the Commonwealth and U.S. Ecology, the “fortuity defense,” proceeded to trial in June 1997. “Fortuity” is the principle that an insured cannot have coverage for those things that are “expected or intended” from the covered conduct. See, e.g., James Graham Brown Foundation v. St. Paul Fire & Marine Ins. Co., 814 S.W.2d 278 (Ky.1991). The jury found these ap-pellees were precluded from recovery under the “Facility Form” since their share of the remediation costs were “expected, intended, anticipated or foreseen” in the ordinary course of operating the facility under regulatory compliance.

The Court of Appeals affirmed the circuit court’s summary judgment ruling, but held the Commonwealth was entitled to a new trial on the issue of “fortuity” due to erroneous jury instructions. This Court granted discretionary review,

a. Whether the Court of Appeals erred in setting aside the jury verdict

By order dated March 8, 1997, the Jefferson Circuit Court allowed the “fortuity” defense to proceed to jury trial. Originally, this defense potentially applied to the comprehensive general liability policies held by several of the insureds. However, prior to trial ANI had reached a settlement with all but the Commonwealth and U.S. Ecology.

*836Appellants, ANI, argue the Court of Appeals erred in setting aside the jury verdict on the issue of fortuity. They cite what they contend are multiple errors by the Court, including (1) the Court of Appeals ignoring the fact that the trial court correctly instructed the jury at the close of trial on the issue that had been tried to the jury by agreement of the parties, (2) the Court of Appeal’s finding that the Commonwealth had preserved the objection to the instructions as required by CR 51(3), and (3) the Court of Appeal’s holding that the trial court’s instructions were erroneous in light of this Court’s decision in

Brown Foundation, supra.

To address these arguments, we state first that we agree with ANI and the Court of Appeals that the requirement that loss be fortuitous, i.e. not intended, is a concept inherent in all liability policies. Fortuity “must be judged using a subjective standard, because requiring this knowledge element best serves the overall principle of insurance law.” Aetna Cas. & Sur. Co. v. Dow Chemical Co., 10 F.Supp.2d 771, 789 (E.D.Mich.1998) (internal quotes and citations omitted). “The crucial issue is whether [the insured] was aware... of an immediate threat of the [injury] for which it was ultimately held responsible and for which it now seeks coverage, not the [insured’s] awareness of its legal liability for that [injury].” Id. at 790.

Second, we dispel ANI’s argument that the Commonwealth waived any error with respect to the jury instructions by its submission of a proposed instruction substantially similar in form to that actually tendered to the jury. The Commonwealth offered two alternate instructions regarding fortuity before the close of the trial. And as the process for developing jury instructions continued throughout the trial, the Commonwealth’s late offering of its preferred fortuity instruction does not hinder its ability to argue on appeal that such an instruction was proper.

We find the Commonwealth properly preserved its objection to the given jury instruction, which improperly focused on the “fortuity of the response costs (damages), instead of the fortuity of the harm (property damage),” by its offer of an alternative instruction incorporating its position, which was substantively opposite from, that the court chose to give. CR 51(3) allows an offered instruction as one method to preserve a party’s objection to an offering or failure to offer an instruction.

We also find the Commonwealth’s proffered instruction to more accurately state the law as spoken to in Brown Foundation, supra. In Brown Foundation, this Court addressed the issue of fortuity regarding a claim for insurance coverage. The case mirrors the case at hand in that it involved insureds seeking coverage to pay for an environmental cleanup ordered by the EPA pursuant to CERCLA. We held the Foundation was entitled to coverage under its policies unless it had specific and subjective intent to cause the pollution giving rise to the CERCLA claims. Equating the reasoning of Brown to the case at hand, the Commonwealth is entitled to insurance coverage unless it specifically and subjectively intended to cause the migration of radioactive contamination.

Therefore, we affirm the Court of Appeal’s finding of reversible error due to the giving of an erroneous jury instruction, which we believe misled the jury on the issue of fortuity.

b. Whether ANI should be required to reimburse the insureds for the costs of participating in the EPA Administrative Process

Appellants, ANI, argue they should not be required to reimburse appellees for *837the costs of participating in the CERCLA proceedings because (1) the policy language provides that ANI will defend a “suit,” not an administrative notice, and (2) neither public policy considerations, nor the insureds’ reasonable expectations, require ANI to provide a defense to the CERCLA proceedings.

Appellees, Westinghouse Hittman Nuclear Incorporated and Hittman Nuclear <& Development Corporation (collectively referred to as “Hittman”) and Atcor, Inc. and Chem-Nuclear Systems, Inc. (collectively referred to as “Chem-Nuclear”), (position also adopted by Commonwealth Ecology) argue the CERCLA proceedings constitute a “suit” requiring ANI to defend.

Both the “Facility” and “S & T” policies issued by ANI provide the insurers will “defend any suit against the insured alleging ... bodily injury or property damage and seeking damages which are payable under the terms of the policy; but the companies may make such investigation, negotiation or settlement of any claim or suit as they deem expedient.” The policies do not define the term “suit” or “claim.”

ANI relies on Foster-Gardner, Inc. v. National Union Fire Ins. Co., 18 Cal.4th 857, 77 Cal.Rptr.2d 107, 959 P.2d 265 (1998), and various other cases from other jurisdictions, for the proposition that an administrative order directing an insured to take remedial action to clean up pollution is not a “suit” triggering a duty to defend. The Court of Appeals expressly rejected this “bright line” approach, distinguishing suits from claims, because it believed this approach disregards the doctrine of reasonable expectations.

The rule of interpretation known as the “reasonable expectations doctrine” resolves an insurance policy ambiguity in favor of the insured’s reasonable expectations. True v. Raines, 99 S.W.3d 439, 443 (Ky.2003). As we agree with the Court of Appeals that the term “suit” is susceptible of more than one interpretation, an ambiguity exists as to what actions or processes the term “suit” describes. And thus, such ambiguity must be resolved in favor of the insured’s reasonable expectations.

We believe “an insurance company should not be allowed to collect premiums by stimulating a reasonable expectation of risk protection in the mind of the consumer, and then hide behind a technical definition to snatch away the protection which induced the premium payment.” Moore v. Commonwealth Life Ins. Co., 759 S.W.2d 598, 599 (Ky.App.1988)(internal citations omitted).

Therefore, we would not allow ANI to avoid their duty to defend the insureds in this instance by clinging to an archaic definition of “suit.” In this, we are persuaded by the reasoning in Johnson Controls, Inc. v. Employers Insurance of Wausau, 264 Wis.2d 60, 665 N.W.2d 257 (2003), wherein the Wisconsin Supreme Court held:

[an][i]nsured’s receipt of a potentially responsible party (PRP) letter from the Environmental Protection Agency (EPA) or an equivalent state agency seeking remediation or remediation costs is a “suit” which a comprehensive general liability (CGL) insurer has a duty to defend...; it is the functional equivalent of a suit and marks the beginning of adversarial administrative legal proceedings that seek to impose liability upon an insured, and a reasonable person in the position of the insured would expect the insurer to provide a defense.

Id. at 285.

The existence of a statutory system designed to forgo litigation, while achieving the same relief, minimizes the distinction between administrative claims and formal *838legal proceedings. See Aetna Cas. & Sur. Co. v. Pintlar Corp., 948 F.2d 1507, 1517 (9th Cir.1991). “Coverage should not depend on whether the EPA may choose to proceed with its administrative remedies or go directly to litigation.” Id. at 1517.

For the reasons outlined above, we affirm the Court of Appeal’s finding that ANI is required to reimburse the insureds for their costs in participating in the EPA administrative process,

c. Whether the costs of site measures are paid “as damages because of property damages” within the meaning of the ANI policies.

Appellants, ANI, argue the costs of site measures are not paid “as damages because of property damage.” They contend: (1) none of the insureds’ Maxey Flats response cost liability was spent to compensate third parties for a “compensa-ble loss;” (2) no third party has “sued” any of the insureds alleging bodily injury or property damage to its property because of the nuclear energy hazard at Maxey Flats; and (3) the CERCLA liability was imposed for purely “prophylactic” measures for which ANI’s policies do not provide coverage:

Appellees, Hittman and Chem-Nuclear (position also adopted by Commonwealth) argue the response costs at issue are damages for three reasons: (1) the plain and ordinary meaning of the term “damages” encompasses any monetary liability for property damage, without regard to the form of action in which the liability is imposed, (2) 15 of 17 state supreme courts that have addressed this issue have held that legally mandated environmental remediation costs are “damages,” and (3) the term “damages” is at least ambiguous and must be construed in favor of coverage.

In its policies, ANI promises “to pay on behalf of the insured... all sums which the insured shall become legally obligated to pay as damages because of ... property damage caused by the nuclear energy hazard.”

CERCLA expressly permits responsible parties to insure against the costs of relief under this legislation. See 42 U.S.C. § 9607(e). Therefore, our task is to decide whether ANI’s policies do provide coverage according to their terms despite “damages” being undefined within the policy language.

As such, our reasons for affirming the Court of Appeal’s decision that the cost of site measures are “damages because of property damage” mimic our considerations and reasoning regarding the prior issue of EPA proceedings being the functional equivalent of a suit.

As damages are not defined within ANI’s policies, and various authorities from dictionaries to court opinions define the term to encompass diverse aspects of monetary awards, we find the term ambiguous and subject to the reasonable expectations of the insureds.

We believe the policy language, “all sums which the insured shall become legally obligated to pay as damages because of property damage,” can reasonably be interpreted to cover any claim asserted against the insured arising out of property damage, which requires the expenditure of money, regardless of whether the claim can be characterized as legal or equitable in nature. This interpretation is supported by the dictionary definition of “damages” which makes no distinction between damages at law and actions in equity. See Webster’s Third New International Dictionary 571 (P. Gove ed.1961).

We agree with the majority of state appellate courts that hold the ordinary meaning of “damages” is broad enough to, *839and does include, government mandated response or cleanup costs under CERCLA and similar state environmental protection statutes: as long as the purpose is to rectify, correct, control, lessen or stop ongoing injury of the premises. This purpose is met in this action.

We are further persuaded by the reasoning of the Wisconsin Supreme Court in Johnson Controls, Inc. v. Employers Insurance of Wausau, 264 Wis.2d 60, 665 N.W.2d 257 (2003), wherein the Court explained:

the nature of relief in CERCLA response cost actions is not confined to future injuries; it includes legal recompense for injuries sustained.... Thus, there is both a prospective and remedial element to an insured’s response cost liability. Because CERCLA proceedings seek the costs of repairing damaged property, rather than the cost of conforming one’s future conduct, the nature of the relief is, at least in part compensatory.

Id. at 274.

The Sixth Circuit Court of Appeals has also explained its interpretation of the term “damages” in the case of Anderson Development Co. v. Travelers Indem. Co., 49 F.3d 1128 (6th Cir.1995), wherein the Court wrote:

The fact that the insured cooperates and assumes the obligation to conduct the 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. Accordingly, we... hold... government imposed environmental clean-up costs constitute “damages.”

Id. at 1133.

We would add, also, that if ANI intended a narrow technical definition of “damages,” it was their duty to define the term clearly within- their policies. See Minnesota Min. & Mfg. Co. v. Travelers Indem. Co., 457 N.W.2d 175, 181 (Minn.1990).

The second question we must answer before concluding ANI’s policies provide coverage for the cost of site measures incurred by the ináureds, i's whether these costs are “damages beeaúse of property damage” within the meaning of the policies.

Unlike standard form general liability policies, ANI’s policies expressly define “property damage” to include “radioactive contamination” and also contemplate within the definition, the “imminent danger of such contamination.” Because radioactive contamination of property has unquestionably occurred at, in, and around Maxey Flats, we find “property damage” has occurred as the term is defined within the policies.

We think the trial court explained its reasoning well when it wrote:

The EPA response costs were triggered by, and can be seen by the ordinary insured to have been imposed “because of’ the radionuclide levels which were discovered on the adjacent property. Since the radionuclide levels on the adjacent property triggered the liability, they were “property damage” from the standpoint of the insureds. The ambiguity of the provision allows nontechnical construction, and application in the insureds’ favor.

Thus, we affirm the Court of Appeal’s decision that the insureds’ costs of site measures are “damages because of property damage” as defined within ANI’s policies.

d. Whether, exclusion (f) applies and therefore precludes coverage

The ANI “Facility” and “S & T” policies contain what are referred to as *840“Facility Exclusions” that preclude coverage for property damage to Maxey Flats. ANI’s Facility Form Exclusion (ft provides that coverage does not apply “to property damage to any property at the location designated in [Maxey Flats], other than aircraft, watercraft or vehicles licensed for highway use, provided such aircraft, watercraft or vehicles are not used in connection with operation of the facility.”

The ANI S & T Forms NS-230 and NS-266, at Exclusion f, state that those policies do not apply “to property damage to any property at any nuclear facility or any property threat arising out of the possession, handling, use, storage or disposal of nuclear material at such nuclear facility....”

Kentucky law mandates that exclusions in insurance policies should be narrowly construed as to effectuate insurance coverage. See Eyler v. Nationwide Mut. Fire Ins. Co., 824 S.W.2d 855, 859 (Ky.1992). We find in accordance with the Court of Appeal’s opinion that the weight of authority favors coverage under liability policies for remediation expenses when the primary intent is to prevent additional harm to the property of others or to public waters. See, e.g., Intel Corporation v. Hartford Acc. & Indem. Co., 952 F.2d 1551 (9th Cir.1991); Gerrish Corp. v. Universal Underwriters Ins. Co., 947 F.2d 1023 (2d Cir.1991). We recognize also that common sense would mandate in this scenario the most effective method of preventing additional harm to the property of others or to public waters would be to target the site of the harm, though it may be on-site, to prevent further contamination via run off to off-site locations.

Plus, we find the parties stipulation that only 2.6% of the total response costs were designed to clean up damage confined to the insured facility determinative of our decision whether exclusion (f) applies to exclude ANI’s liability for the insureds’ response costs. Accordingly, we affirm the lower court’s finding that only 2.6% of the response costs are subject to exclusion (f), a ruling undisturbed by the Court of Appeal’s opinion.

e. Whether ANI’s policies cover the defense costs incurred in this action.

Cross-appellants, Hittman and Chem-Nuclear, (position also adopted by Commonwealth) argue the Court of Appeals erred in enforcing the provision contained in both the “Facility” and “S & T” policies which includes (or offsets) defense costs within the policies limits. The insureds also argue they are entitled to recover their attorney’s fees incurred in the declaration action brought by cross-appellees, ANI.

The “Facility” and “S & T” Forms of the Nuclear Energy Liability Policy both contain the following expense offset provision, titled: Limit of Liability: Termination of Policy Upon Exhaustion of Limit, which states, in part:

the limit of the companies’ liability stated in the declarations is the total liability of the companies for their obligations under this policy and the expenses incurred by the companies in connection with such obligations, including.. .payments for expenses incurred in ... defense of any claim or suit, including... attorneys’ fees and disbursements.... Each payment made by the companies in discharge of their obligations under this policy or for expenses incurred in connection with such obligations shall reduce by the amount of such payment the limit of the companies’ liability under this policy.

Regarding offset of the defense costs, the Court of Appeals reasoned absent a finding of bad faith on the part of an insurer, a breach of its obligation to defend *841the insureds does not provide for a rewriting of the policy contract to award the insured more coverage than it purchased. We disagree with the Court of Appeal’s reading of the contract.

It is the Opinion of this Court that all of the cross-appellants’ Maxey Flats defense costs are now “damages” to be paid by cross-appellees, ANI; Not payments made directly by ANI “in discharge of their obligations under this policy or for expenses incurred in connection with such obligations.... ” We are not disposed to expand the meaning of “payments made in discharge of their obligations under the policy,” or “expenses incurred in connection with such obligations” to include payment of damages under compulsion. Anyway one reads the contested policy language, it requires voluntary payments by the companies in furtherance of the contractual obligations under the policy; not “litigated” damages for failure to hon- or the policy terms.

If ANI had paid attorneys’ fees and expenses in defense of the insureds in the EPA CERCLA action, they would be entitled to offset such “payments for expenses incurred in defense of any claim or suit” as their policies directly provide. However, this policy language does not encompass “damages paid, or to be paid” for a breach of the contract.

As argued by cross-appellants and supported by Kentucky law, an insurer has a duty to defend if there is any allegation which potentially, possibly or might come within the coverage terms of the insurance policy. James Graham Brown Foundation v. St. Paul Fire & Marine Insurance Co., 814 S.W.2d 273, 279 (Ky.1991)(internal citations omitted). If the insurer believes there is no coverage, it has several options. One is to defend the claim anyway, while preserving by a reservation of rights letter its right to challenge the coverage at a later date. Another is to elect not to defend. However, should -coverage be found, the insurer will be hable for “all damages naturally flowing from” the failure to provide a defense. See Eskridge v. Educator and Executive Insurers, Inc., 677 S.W.2d 887 (Ky.1984). This includes “damages” for reimbursement of defense costs and expenses if the insured hires his own lawyer, and in some instances, the amount of a default judgment, if he does not. cf., Grimes v. Nationwide Mutual Insurance Company, 705 S.W.2d 926 (Ky.App.1985).

In line with the reasoning of Eskridge and Grimes, we find the defense costs expended by cross-appellants in the CERCLA action, for which ANI owed a duty to defend, are damages to be paid them, and even though measured by the cost of such defense as owed, are not deductible, or to be offset, from ANI’s liability policy limits. We note also that should this Court have determined a lack of coverage existed regarding the EPA proceeding, ANI would still have owed a duty to defend the insureds in the EPA action, because we believe the EPA’s Potentially Responsible Parties notice letter contained allegations which “potentially, possibly or might” be considered to indicate “property damage” within ANI policies’ scope of coverage. Therefore, ANI owed a duty to defend, regardless of whether they were later adjudicated to owe a duty to pay.

We also agree with cross-appellants’ argument that if ANI were allowed to invoke the above quoted provision from their liability policy, they would not suffer any adverse consequences as a result of their breach of duty to defend. There would be no incentive to review the contractual language carefully, as there would be no consequences. Therefore, public policy is another incentive to find in favor *842of the Cross-Appellants on this issue. An insurer should not stand to gain from its denial to defend its insured.

The second sub-issue regarding attorneys’ fees involves the insureds’ claim that the Court of Appeals erred in refusing to allow them recovery of their attorneys’ fees incurred in the declaratory judgment action initiated by ANI. With this contention, we cannot agree.

The Court of Appeals correctly stated the general rule in Kentucky that, “with the exception of a specific contractual provision allowing for recovery of attorneys’ fees or a fee-shifting statute, ... each party assumes responsibility for his or her own attorneys’ fees,” citing Nucor Corp. v. General Electric Co., 812 S.W.2d 136 (Ky.1991).

We are still in agreement with the holding in Nucor, and therefore, affirm the Court of Appeal’s decision not to allow cross-appellants recovery of their attorneys’ fees in the declaratory judgment action.

f. Whether the ANI policies were triggered for the full amount of the limits in effect at any time the property damage at issue was caused without pro-rating the liability

In its cross-appeal, Westinghouse Hittman Nuclear Incorporated and Hitt-man Nuclear & Development Corporation (collectively referred to as “Hittman”), argue the Court of Appeals erred in affirming the trial court’s decision to pro-rate the amount of insurance available to cover its losses. Cross-appellees, ANI, argue the ANI policies were not triggered for the full amount of the limits. They believe the circuit court correctly allocated the damage over time periods and then correctly applied the policy limits in effect during that time period to the amounts so allocated.

The trial court held that the cause of the property damage on and off Maxey Flats was ongoing and continuous during the various policy periods. Therefore, the Trial Court pro-rated coverage since the damage was not divisible or allocable during and between the policy periods.

We adopt the reasoning of the Court of Appeal’s opinion regarding this issue of pro-ration as we agree that Hittman’s cited authorities do not carry their proclaimed weight when dealing with the instant case involving one insurer, a single liability policy (the “Facility” Form) and a single excess policy (the “S & T” policy). As such, we affirm the Court of Appeal’s decision on this issue.

LAMBERT, C.J., GRAVES, JOHNSTONE and WINTERSHEMINE R, JJ., concur. COOPER, J., dissents by separate opinion with ROACH, J., joining that opinion except for its reliance on Section 2 of the Constitution of Kentucky.