Doerr v. Mobil Oil Corp., 00-CC-0947.

CourtSupreme Court of Louisiana
Writing for the CourtCALOGERO, Chief Justice.
Citation774 So.2d 119
PartiesPhyllis Kay Roby DOERR, et al. v. MOBIL OIL CORPORATION, et al.
Docket NumberNo. 00-CC-0947.,00-CC-0947.
Decision Date19 December 2000

774 So.2d 119

Phyllis Kay Roby DOERR, et al.

No. 00-CC-0947.

Supreme Court of Louisiana.

December 19, 2000.

774 So.2d 121
Alfonse Savino Monteferrante, Esq., John Wayne Mumphrey, Esq., Claude Salvador Mumphrey, II, Esq., Wayne Brown Mumphrey, Esq., Chalmette, Counsel for Applicant

Alvin Bordelon, Jr., Esq., Manuel A. Fernandez, Esq., Gilbert Victor Andry, IV, Esq., Irving Jay Warshauer, Esq., Sidney D. Torres, III, Esq., John Gordon Gomila, Jr., Esq., Godfrey Bruce Parkerson, Esq., Kenan Slade Rand, Jr., Esq., New Orleans, Counsel for Respondent.

Celeste D. Elliott, Esq., Ralph Shelton Hubbard, III, Esq., New Orleans, John C. Yang, Esq., Laralee C. Morell, Esq., Laura A. Foggan, Esq., Washington, DC, Counsel for Alliance of American Insurers, and National Association of Independent Ins., (Amicus Curiae).

Richard Nelson Dicharry, Esq., George Bartlett Hall, Jr., Esq., Harry Alston Johnson, III, Esq., Leah Elizabeth Nunn, Esq., New Orleans, Counsel for Lloyd's

774 So.2d 122
London Certain Underwriters, and London Market Insurance Companies, (Amicus Curiae)

CALOGERO, Chief Justice.

This class action lawsuit arises out of a discharge of hydrocarbons from a Mobil Oil refinery in Chalmette, Louisiana into the Mississippi River in January of 1998. Following the discharge, the hydrocarbons were allegedly drawn into the St. Bernard Parish water system and then distributed to users throughout the parish. The plaintiffs seek compensation from St. Bernard Parish and its insurer, Genesis Insurance Company, among others, for personal injuries allegedly suffered following the consumption and/or use of the allegedly contaminated water. The trial court denied a motion for summary judgment filed by Genesis based upon a total pollution exclusion endorsement in the policy. The Fourth Circuit Court of Appeal thereafter reversed and dismissed the claim against Genesis based on the interpretation of that exclusion by this court in its decision in Ducote v. Koch Pipeline Co., 98-0942 (La.1/20/99), 730 So.2d 432. We granted the writ application of St. Bernard Parish to reexamine our holding in Ducote and to consider its contention that the insurance policy issued by Genesis Insurance covers its potential liability exposure in this case.


The plaintiffs allege that from January 7, 1998 to January 11, 1998, the Mobil Oil Chalmette refinery, which was owned and operated by Mobil Oil Corporation and Chalmette Refining, L.L.C., "experienced discharge(s), spill(s), upset(s) and/or emission(s) of various substances, hazardous and nonhazardous, as a result of overflow or runoff of the contents of its waste water facility" into the Mississippi River. These "substances," it is alleged, were drawn into the St. Bernard Parish water system and, in turn, distributed to at least 6,000 persons within the homes and businesses of St. Bernard Parish.

Although the parties dispute the date that Genesis first began insuring the St. Bernard Parish government, the policy at issue was a commercial general liability insurance policy ("CGL policy") issued by Genesis Insurance Company to St. Bernard Parish that was effective from February 1, 1996 to February 1, 1999. Under the terms of the policy, St. Bernard Parish was self-insured against claims of up to $250,000 and Genesis provided coverage for the next $1,000,000 of liability, per occurrence, for bodily injury or property damage caused by St. Bernard Parish. Additionally, the policy contained an endorsement entitled "Total Pollution Exclusion Endorsement," which provided in its entirety:

This insurance does not apply to:

(1) "Bodily injury", "property damage", "personal injury" or "advertising injury" which would not have occurred in whole or part but for the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants at any time.
(2) Any loss, cost or expense arising out of any:
(a) Request, demand or order that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of pollutants; or
(b) Claim or suit by or on behalf of a governmental authority or others for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of pollutants.
Pollutants means solid liquid, gaseous, or thermal irritant or contaminant including smoke, vapor, soot, fumes, acid, alkalis, chemicals and waste.
Waste includes material to be recycled, reconditioned or reclaimed.
774 So.2d 123
This exclusion does not apply to "bodily injury", "property damage", "personal injury" or "advertising injury" caused by heat, smoke or fumes from a hostile fire. As used in the exclusion, a hostile fire means one which becomes uncontrollable or breaks out from where it was intended to be.

This exclusion was not part of the original policy, but was adopted and placed in the policy on February 27, 1996.1

Following the alleged contamination of their water supply, plaintiffs filed this class action suit against Mobil Oil Corporation and Chalmette Refining, L.L.C. on January 14, 1998. On July 28, 1998, plaintiffs filed a First Supplemental and Amending Petition for Damages adding EPEC Oil Co., formerly known as Tenneco Oil Co., as a defendant because of its alleged ownership and custody of the refinery at issue.2 A Second Supplemental and Amended Petition for Damages was filed by the plaintiffs on November 5, 1998 adding St. Bernard Parish, through the Department of Public Works, Water Division, based on its distribution of the contaminated water throughout the parish. Finally, also on November 5, 1998, the plaintiffs filed a Third Supplemental and Amending Petition adding Genesis Insurance Company as a defendant based on the commercial general liability insurance policy that Genesis issued to the Parish.

In August of 1999, Genesis filed a motion for summary judgment arguing that there was "no genuine issue of material fact that the total pollution exclusion endorsement contained in the policy of insurance issued to St. Bernard Parish Government excludes coverage for plaintiffs' alleged damages." On November 5, 1999, the trial court denied Genesis's motion for summary judgment and Genesis subsequently applied for a writ from the court of appeal. On March 3, 2000, the Fourth Circuit granted the writ application, reversed the trial court, and dismissed the claim against Genesis Insurance Company. See Doerr v. Mobil Oil Corp., 99-3131, pp. 1-3 (La.App. 4 Cir. 3/3/00), 766 So.2d 562, 562-63. Specifically, the Fourth Circuit rejected the arguments that (1) Ducote's interpretation of pollution exclusions only applied prospectively, (2) this court did not have the benefit of documentation from the Office of Louisiana Commissioner of Insurance when it decided Ducote, and (3) the court should not follow Ducote because it was improperly decided. See id. 99-3131 at 1-2, 766 So.2d at 562-63. In doing so, the Fourth Circuit found that Ducote controlled and required it to find no coverage under the policy. See id. 99-3131 at 1, 766 So.2d at 562. St. Bernard Parish applied for a writ of certiorari to this court which we granted. See Doerr v. Mobil Oil Corp., 00-0947 (La.6/16/00), 763 So.2d 611.3

Interpretation of the Insurance Policy

The resolution of this matter turns on the interpretation of the Genesis insurance policy's total pollution exclusion. An insurance policy is an aleatory contract subject to the same basic interpretive rules as any other contract. See La. Civ.Code art. 1912, cmt. e; Magnon v. Collins, 98-2822, p. 6 (La.7/7/99), 739 So.2d 191, 196; Peterson v. Schimek, 98-1712, p. 4 (La.3/2/99), 729 So.2d 1024, 1028; Smith v. Matthews, 611 So.2d 1377, 1379 (La.1993).

774 So.2d 124
The interpretation of an insurance contract is nothing more than a determination of the common intent of the parties. See La. Civ.Code art. 2045; Magnon, 98-2822 at 6, 739 So.2d at 196; Ledbetter v. Concord Gen. Corp., 95-0809, p. 3 (La.1/6/96), 665 So.2d 1166, 1169. Obviously, the initial determination of the parties' intent is found in the insurance policy itself. See La. Civ.Code art. 2046. In analyzing a policy provision, the words, often being terms of art, must be given their technical meaning. See id. at art. 2047. When those technical words are unambiguous and the parties' intent is clear, the insurance contract will be enforced as written. See La. Civ.Code art. 2046; Magnon, 98-2822 at 7, 739 So.2d at 197. If, on the other hand, the contract cannot be construed simply, based on its language, because of an ambiguity, the court may look to extrinsic evidence to determine the parties' intent. See Peterson, 98-1712 at 5, 729 So.2d at 1029

When determining whether or not a policy affords coverage for an incident, it is the burden of the insured to prove the incident falls within the policy's terms. See Barber v. Best, 394 So.2d 779, 781 (La.App. 4th Cir.1981). On the other hand, the insurer bears the burden of proving the applicability of an exclusionary clause within a policy. See Dubois v. Parish Gov't Risk Mgmt. Agency-Group Health, 95-546, p. 5 (La.App. 3 Cir. 1/24/96), 670 So.2d 258, 260; Shaw v. Fidelity & Cas. Ins. Co., 582 So.2d 919, 925 (La.App. 2nd Cir.1991); Landry v. Louisiana Hosp. Serv., Inc., 449 So.2d 584, 586 (La.App. 1st Cir.1984); Barber, 394 So.2d at 781. Importantly, when making this determination, any ambiguities within the policy must be construed in favor of the insured to effect, not deny, coverage. See Yount v. Maisano, 627 So.2d 148, 151 (La. 1993); Garcia v. St. Bernard Parish Sch. Bd., 576 So.2d 975, 976 (La.1991); Breland v. Schilling, 550 So.2d 609, 610 (La.1989); Sherwood v. Stein, 261 La. 358, 362, 259 So.2d 876, 878 (1972).

In this case, the total pollution exclusion purportedly excludes coverage for any injury that "would not have...

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