American National Property & Casualty Co vs. Wyatt:
When Joyce Bentley brought her granddaughter and friend to her house for the night, she forgot to turn her car off in the garage. All got sick from the fumes, and Bentley and the granddaughter died. The estate and her insurer, American National Property & Casualty, (ANPAC) were sued. The trial court granted summary judgment to ANPAC on its claim that the pollution exclusion applied to preclude coverage. The appellate court reversed, finding that the pollution exclusion was ambiguous, and that the reasonable expectations of an insured would be that such claims would be covered.
The exclusionary language relied upon by ANPAC in denying coverage states: Coverage E – Personal Liability and Coverage F – Medical Payments to Others do not apply to bodily injury or property damage: * * * n. arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release, or escape of pollutants . . . Elsewhere, the policy defines "pollutants" as "any solid, liquid, gaseous, or thermal irritant or contaminant, including but not limited to smoke, vapors, soot, fumes, acids, alkalis, toxic chemical, and waste. Waste includes materials to be recycled, reconditioned, or reclaimed." "Combining these various provisions, the Policy excludes coverage for any bodily injury resulting from the 'discharge, dispersal, seepage, migration, release or escape' of 'any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, [toxic] chemicals and waste." Apana v. TIG Ins. Co., 574 F.3d 679, 681 (9th Cir. 2009).
This is standard language used by the insurance industry and is frequently referred to as the "total pollution exclusion." Id. at 680.
The court discusses the history of the pollution exclusion clause: "Since the adoption of the absolute pollution exclusion, however, insurers have repeatedly sought to exclude coverage under this exclusion for injuries that have occurred outside the realm of what would be considered traditional environmental pollution." The court rejected the claim that the dictionary definition should apply: "Rather, a court properly refusing to make 'a fortress out of the dictionary' must attempt to put itself in the position of a layperson and understand how he or she might reasonably interpret the exclusionary language." "Without some limiting principle, the pollution exclusion clause would extend far beyond its intended scope, and lead to some absurd results."
In short, an interpretation that ignores the familiar connotations of the word "pollutant" and that would lead to absurd results is not the interpretation that an ordinary person of average understanding would adopt.
The court cited cases holding that carbon monoxide would not be excluded under a pollution exclusion clause and reasoned that carbon dioxide should be similarly treated. The exclusion was ambiguous and the reasonable expectations of the policy holders required that the claim be covered. Summary judgment to the insurance company was reversed, and summary judgment for the policy holder was entered.