Auto-Owners Ins. Co. v. Hanson

Decision Date16 February 1999
Docket NumberAUTO-OWNERS,No. C6-98-1480,C6-98-1480
Citation1999 WL 68556,588 N.W.2d 777
PartiesINSURANCE COMPANY, Respondent, v. Samantha HANSON, a minor, through her Guardian ad Litem, Christine DeMoss, Appellant, Kelley O'Neill, d/b/a Spruce Shadow Farm, n/k/a Sheep Improvement Company, et al., Defendants.
CourtMinnesota Court of Appeals

Syllabus by the Court

Because we are not to employ a technical understanding of environmental terms in construing a pollution exclusion, a child's bodily injury from ingestion of lead in paint chips must be found within the scope of an exclusion of injuries resulting from dispersal of pollutants.

Timothy P. Tobin, Elliot L. Olsen, Gislason, Dosland, Hunter & Malecki, P.L.L.P., Minnetonka, MN (for respondent).

William D. Harper, Paul D. Peterson, Law Office of William D. Harper, Chrtd., Woodbury, MN (for appellant).

Considered and decided by TOUSSAINT, Chief Judge, CRIPPEN, Judge, and MULALLY, * Judge.



Appellant disputes the trial court's declaratory judgment that coverage for her bodily injury claim is precluded by a so-called "absolute pollution exclusion" for injuries arising out of dispersal of pollutants. We affirm.


Appellant, Samantha Hanson, was an infant during the time from November 1993 through July 1994 when her family lived at rental property owned by the O'Neill Trust (defendant Cynthia Kelley O'Neill Trust 1954 Trust No. 1). She alleged in her complaint in the underlying action that she suffered severe health problems as a result of ingestion and absorption of lead in paint at the property. Specifically, sill and frame window pieces containing lead paint dislodged when the windows were opened and closed, and it was alleged that she ate some of these pieces. Defendants tendered defense of the action to respondent Auto-Owners Insurance Company. Respondent denied coverage on the basis of the "absolute pollution exclusions." 1

The commercial umbrella policy for defendant O'Neill Trust for the period April 1, 1994, through April 1, 1995, contained an exclusion for injuries and damage resulting from "discharge, release, escape, seepage, migration or dispersal of pollutants" "at or from any premises" owned by an insured. The policy defined pollutant as "any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, liquids, gases and waste." 2

The trial court found that the exclusion applied, stating that "[b]ecause of its irritant effects on the human body, lead is an 'irritant or contaminant, including * * * chemicals * * * and waste.' " The court added: "Ms. Hanson alleges that the paint was chipping or flaking. This could also constitute a discharge, release or migration."


Does the so-called "absolute pollution exclusion" clause in the polices preclude appellant's bodily injury claim?


The interpretation of an insurance contract is a question of law as applied to the facts presented. Iowa Kemper Ins. Co. v. Stone, 269 N.W.2d 885, 887 (Minn.1978). We review questions of law de novo. Garrick v. Northland Ins. Co., 469 N.W.2d 709, 711 (Minn.1991).


Initially we must determine whether lead in paint in a home is a pollutant within the meaning of the policy's pollution exclusion. Our analysis is governed by Board of Regents v. Royal Ins. Co., 517 N.W.2d 888 (Minn.1994). In Royal, the supreme court applied a non-technical, plain-meaning approach to interpreting a pollution exclusion, and found that asbestos fibers qualified as an "irritant" where the policy precluded from coverage damages caused by the "discharge, dispersal, release or escape of * * * irritants." 517 N.W.2d at 890-92. The court stated that it would be "a disservice to the English language if we were to say that asbestos fibers, which are a health hazard because of their irritant effects on the human body, were not an irritant," and thereby concluded its analysis of whether asbestos fibers fell within the policy's list of pollutants. Id. at 892.

Following Royal and applying a non-technical approach to the exclusion at issue, we find that lead in paint falls within the policy's definition of pollutant. See United States Liab. Ins. Co. v. Bourbeau, 49 F.3d 786, 788-89 (1st Cir.1995) (a reasonable insured could not "possibly believe that 'smoke, vapor, soot, [and] fumes' would be considered pollutants while lead paint would not"); St. Leger v. American Fire & Cas. Ins. Co., 870 F.Supp. 641, 643 (E.D.Pa.1994) (it is widely understood that lead is a chemical that irritates and contaminates); Oates by Oates v. State, 157 Misc.2d 618, 597 N.Y.S.2d 550, 554 (N.Y.Ct.Cl.1993) (lead paint is a chemical and a contaminant that can irritate or poison).

Applying an ordinary meaning approach to the pollution exclusion also coincides with Minnesota's general rule for insurance policy interpretation. See Farmers Home Mut. Ins. Co. v. Lill, 332 N.W.2d 635, 637 (Minn.1983) (insurance policy interpreted according to its plain, ordinary meaning and what a reasonable person would have thought it meant). This contradicts a line of cases in other states that find either (1) the exclusion unambiguously does not exclude lead paint in a home, or (2) the language is ambiguous and therefore the exclusion does not apply. These cases are premised on a technical rather than an ordinary reading of the exclusion, ascribing to the reader a knowledge of "terms of art" in environmental law and thus are inconsistent with Royal 3 and inapplicable to Minnesota cases. 4 See Atlantic Mut. Ins. Co. v. McFadden, 413 Mass. 90, 595 N.E.2d 762, 764 (Mass.1992) (lead paint definitively excluded from the definition of pollutant because the exclusion uses the words "discharge," "dispersal," "release," and "escape," terms of art in environmental law that generally refer to injury caused by hazardous waste, not lead contained in paint applied in a residence); Bourbeau, 49 F.3d at 789 (lead paint in house not a pollutant under exclusion corroborated by use of "terms of art" in environmental law that generally apply to injury caused by hazardous waste, not lead paint); Sullins v. Allstate Ins. Co., 340 Md. 503, 667 A.2d 617, 620-22 (Md.1995) (exclusion ambiguous because use of "terms of art" provided basis for reasonable alternative interpretation that it only applied to pollution of the natural environment, rather than lead paint in a home); Weaver v. Royal Ins. Co., 140 N.H. 780, 674 A.2d 975, 977 (N.H.1996) (same); Generali-U.S. Branch v. Caribe Realty, 160 Misc.2d 1056, 612 N.Y.S.2d 296, 298-99 (N.Y.Sup.Ct.1994) (same).

Jurisdictions that follow the ordinary-meaning approach reach the conclusion that lead in paint is a pollutant under the policy's definition. See Shalimar Contractors v. American States Ins. Co., 975 F.Supp. 1450, 1457 (M.D.Ala.1997) ("a laborious reading of the terms 'discharge, dispersal, release and escape' " as to confine the exclusion to pollution of the natural environment was inconsistent with Alabama law, whereby terms of an exclusion must be given the meaning that a person of ordinary intelligence would reasonably attribute to them); see also St. Leger, 870 F.Supp. at 643; Kaytes v. Imperial Cas. & Indem. Co., No. 93-1573, 1994 WL 780901, at (E.D.Pa. Jan.6, 1994).

We also observe that the additional holding in Royal, that the definition of pollutant is determined with careful reference to the policy's description of the object polluted, mandates our determination that lead in paint in a home qualifies as a pollutant under the exclusion at issue. Royal involved the interpretation of two policies. In one, the exclusion precluded coverage for damage arising out of contamination into or upon land, "the atmosphere," or any water course or body of water. 517 N.W.2d at 890. The other excluded from coverage damages caused by pollution of land, water, "air," or real or personal property. Id. at 893. The court concluded that with the change of the object polluted from "atmosphere" to "air," the excess policy enlarged the scope of the exclusion and encompassed pollution of the air within a building by asbestos fibers. Id. at 893-94. 5

The "absolute pollution exclusion" clause at issue eliminates all language limiting coverage by describing the objects to be affected by the pollutants. The policy only states that the "dispersal," etc. must occur "at or from" the insured premises. Because the scope of what qualifies as a pollutant has been controlled to a considerable extent by the policy language describing the objects polluted, when there is no such language, the scope of the exclusion is in its broadest form, and in this case it encompasses lead paint in a house.

The observation that the omission of the "into or upon the land, atmosphere, or any water course or body of water" clause significantly broadens the scope of the exclusion is corroborated by courts in other jurisdictions that have addressed the issue. See Shalimar, 975 F.Supp. at 1457 (finding the deletion of the clause made the exclusion "far broader" than the previous exclusion); Oates, 597 N.Y.S.2d at 553 ("we cannot imagine a more unambiguous statement of intent [by insurers to not restrict the exclusion to industrial pollution] than, after being told by the courts that 'land, atmosphere, and water course' imply industrial pollution, to replace such language with 'premises you own, rent, or occupy' "). Other courts have found that the change did not effect coverage. See Sphere Drake Ins. Co. v. Y.L. Realty Co., 990 F.Supp. 240, 244 (S.D.N.Y.1997) (change did not broaden the exclusion to cover contaminants such as lead paint, in part because the "terms of art"--"discharge, dispersal, release, or escape" remained); Sullins, 667 A.2d at 622-23 (no change in meaning with the deletion of the phrase "into or upon land, the atmosphere or any watercourse or body of water" as the phrase was "merely redundant" in light of the continued use of the environmental "terms of...

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