Hicks v. American Resources Ins. Co., Inc.

• Decision Date: 28 April 1989
• Citation: 544 So.2d 952
• Parties: Emery L. HICKS, et al. v. AMERICAN RESOURCES INSURANCE COMPANY, INC. 87-1548.
• Court: Alabama Supreme Court

Page 952

544 So.2d 952

Emery L. HICKS, et al. v. AMERICAN RESOURCES INSURANCE COMPANY, INC.

87-1548.

Supreme Court of Alabama.

April 28, 1989.

Robert B. Roden, Birmingham, for appellants.

Robert S. Lamar, Jr. and Jack G. Criswell of Brown, Hudgens, Richardson, P.C., Birmingham, for appellee.

ADAMS, Justice.

This is an appeal from a declaratory judgment in favor of American Resources Insurance Company, Inc. The appellants, Emery and Elizabeth Hicks, charge that the trial court erred in its interpretation of a general insurance policy issued to Berry Mountain Mining Company by holding that an exclusionary clause in the policy operated against the Hickses.

The insurance policy in question was issued by American Resources to Berry Mountain Mining Company on June 1, 1985, and was to be in effect through April 22, 1986. The applicability of the following exclusionary clause is at issue:

"This insurance does not apply:

"....

"(f) to bodily injury or property damage arising out of the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any water course or body of water; but this exclusion does not apply if such discharge, dispersal, release or escape is sudden and accidental;

"....

"(k) to property damage to

"(1) Property owned or occupied by or rented to the insured;

"(2) Property used by the insured, or

"(3) Property in the care of, custody or control of the insured or as to which the insured is for any purpose exercising physical control...."

The record indicates that the Hickses entered into a lease with Berry Mountain Mining Company that permitted Berry Mountain to conduct strip mining operations on their property. Upon cessation of these operations, a pit that had been dug 300 to 400 feet above the Hickses' water supply and that had been continuously pumped dry, was allowed to fill with water. This standing water, the Hickses argue, became contaminated and thereafter contaminated their water supply because of the runoff and seepage, etc., of acids, alkalis, and toxic chemicals, etc.

In granting American Resource's requested relief, the trial judge stated:

"The undisputed evidence before this court is that if the action of Berry Mountain caused the damage to the Hickses' wells, it was due to the release or escape of acids, alkalis, toxic chemicals, liquids, waste material, or pollutants into the water course or body of water. Thus, though the court is aware of the holdings in Molton, Allen & Williams, Inc. v. St. Paul Fire & Marine Ins. Co., 347 So.2d 95 (Ala.1977), and United States Fidelity & Guaranty Co. v. Armstrong, 479 So.2d 1164 (Ala.1985), it finds that the acts alleged in this cause are specifically excluded from the insurance coverage and that no ambiguity exists."

The Hickses contend that the trial judge erred in failing to consider the means through which the discharge occurred, i.e., seepage and runoff as opposed to other more "industrial" means. They argue that the exclusionary clause was intended to exclude only industrial contamination resulting directly from mechanical instruments or machines.

American Resources, on the other hand, contends that the exclusionary clause applies and that it should not be required to indemnify Berry Mountain in the event that the Hickses obtain a judgment against Berry Mountain. We agree. In the case sub judice, the pollutants causing the damage were undisputedly acids, alkalis, toxic chemicals,...