Langone v. American Family Mut. Ins. Co.

• Decision Date: 14 March 2007
• Docket Number: No. 2006AP1332.,2006AP1332.
• Citation: 731 N.W.2d 334,2007 WI App 121
• Parties: Christopher L. LANGONE, James Langone, and Priscilla Langone, Plaintiffs-Respondents, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Defendant-Appellant,<SMALL><SUP>†</SUP></SMALL> David Boyer, Dean Health Plan, Inc., United Dominion Industries, The Travelers Company, Stritzel Heating, Inc., The Marley Company, Inc., d/b/a Weil-McLain, DEF Insurance Company, and Wisconsin Electric Power Company, Defendants. American Family Mutual Insurance Company, Plaintiff-Appellant,<SMALL><SUP>†</SUP></SMALL> v. David M. Boyer, Estate of Michael Langone, Bernard J. Powell, Stritzel Heating, Inc., Weil-McLain Boiler Company, United Dominion Industries, City of Whitewater, The Travelers Companies, DEF Insurance Company, GHI Insurance Company, and JKL Insurance Company, Defendants, Christopher Langone, James Langone, individually and as the Special Administrator of the Estate of Michael A. Langone, and Priscilla Langone, Defendants-Respondents.
• Court: Wisconsin Court of Appeals

731 N.W.2d 334

2007 WI App 121

Christopher L. LANGONE, James Langone, and Priscilla Langone, Plaintiffs-Respondents, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Defendant-Appellant,^† David Boyer, Dean Health Plan, Inc., United Dominion Industries, The Travelers Company, Stritzel Heating, Inc., The Marley Company, Inc., d/b/a Weil-McLain, DEF Insurance Company, and Wisconsin Electric Power Company, Defendants.

American Family Mutual Insurance Company, Plaintiff-Appellant,^† v. David M. Boyer, Estate of Michael Langone, Bernard J. Powell, Stritzel Heating, Inc., Weil-McLain Boiler Company, United Dominion Industries, City of Whitewater, The Travelers Companies, DEF Insurance Company, GHI Insurance Company, and JKL Insurance Company, Defendants, Christopher Langone, James Langone, individually and as the Special Administrator of the Estate of Michael A. Langone, and Priscilla Langone, Defendants-Respondents.

No. 2006AP1332.

Court of Appeals of Wisconsin.

Submitted on Briefs January 11, 2007.

Opinion Filed March 14, 2007.

On behalf of the appellant, the cause was submitted on the briefs of David J. Pliner of Corneille Law Group, L.L.C., Madison.

On behalf of the respondents, the cause was submitted on the brief of Larry B. Brueggeman of Previant, Goldberg, Uelmen, Gratz, Miller & Breggeman, S.C., Milwaukee.

Before SNYDER, P.J., BROWN and NETTESHEIM, JJ.

¶ 1 SNYDER, P.J

American Family Mutual Insurance Company appeals from a judgment awarding $100,000 to Christopher L., James and Priscilla Langone. American Family argues that the circuit court erred when it determined that its policy afforded coverage and a defense to David M. Boyer, whose actions negligently damaged the Langones. American Family asserts that the absolute pollution exclusion contained in its insurance contract with Boyer excludes coverage under the facts of this case. Because we conclude that the policy's pollution exclusion does not apply, we affirm the judgment of the circuit court.

FACTS AND PROCEDURAL BACKGROUND

¶ 2 This case arises from injuries sustained by Christopher and the death of his brother, Michael Langone, as a result of carbon monoxide poisoning. Boyer, the brothers' landlord, owned a two-family rental dwelling, which had one upper and one lower apartment. The lower level had a fireplace and, in September 1994, Boyer installed a boiler to heat the unit. On January 20, 2001, Christopher suffered personal injuries and Michael died as a result of carbon monoxide build-up in their apartment.

¶ 3 The Langones sued Boyer and American Family, his insurer, alleging negligence and breach of implied warranty. In their complaint, the Langones asserted:

The aforesaid boiler was equipped with a heating mechanism consisting of a gas fired burner and a system by which fire would be started on the burner when needed to heat the aforesaid lower rental apartment. When a fire was burning in the fireplace at the same time that a fire was burning on the boiler burner, a flue reversal would occur as a result of which the fire burning on the boiler burner would cause carbon monoxide to be emitted into said lower rental apartment.

¶ 4 American Family moved for summary judgment arguing that it had no duty to defend or indemnify Boyer. American Family argued that the "Absolute Pollution Exclusion" in Boyer's policy absolved it of any duty to defend or to provide coverage. Boyer's insurance policy included the following language:

2. Exclusions. This insurance does not apply to:

....

g. POLLUTION.

(1) We will not pay for bodily injury or property damage arising out of actual, alleged, or threatened discharge, dispersal, seepage, migration, release, or escape of pollutants:

(a) at or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to, any insured;

....

Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.

¶ 5 The circuit court denied American Family's motion for summary judgment. Specifically, the court concluded that the term "pollutant" was ambiguous and presented a genuine issue of material fact. American Family moved for clarification and the court rephrased its ruling, holding that because the policy language was ambiguous, there was "coverage under American Family's policy as a matter of law."

¶ 6 Litigation continued until the parties reached a settlement agreement in early 2006. Under the "Stipulation and Order for Judgment," American Family paid the Langones an agreed upon sum in exchange for a full release and dismissal with prejudice regarding all claims against Boyer. American Family reserved the right to appeal the circuit court's finding of coverage as a matter of law. The circuit court entered judgment accordingly, and American Family appeals.

DISCUSSION

¶ 7 American Family contends that carbon monoxide qualifies as a "pollutant" under the pollution exclusion clause in Boyer's policy. It makes three primary assertions concerning the exclusion clause: (1) the clause applies to damages caused by carbon monoxide when the court considers the plain meaning of the clause and the dictionary definition of carbon monoxide; (2) the nature of carbon monoxide as a substance qualifies it as a "pollutant"; and (3) a reasonable insured would expect the definition of "pollution" to encompass carbon monoxide.

Standard of Review

¶ 8 Interpretation of a written insurance policy is a question of law that the appellate court reviews de novo. American Family Mut. Ins. Co. v. American Girl, Inc., 2004 WI 2, ¶ 23, 268 Wis.2d 16, 673 N.W.2d 65. The language of an insurance policy is interpreted in the same way as other contracts. Smith v. Atlantic Mut. Ins. Co., 155 Wis.2d 808, 810, 456 N.W.2d 597 (1990). Courts consider the language's plain and ordinary meaning as understood by a reasonable insured. Kremers-Urban Co. v. American Employers Ins. Co., 119 Wis.2d 722, 735, 351 N.W.2d 156 (1984). Ambiguities in policy language will be construed against the insurer. Smith, 155 Wis.2d at 811, 456 N.W.2d 597. However, we will not eviscerate a policy exclusion that is clear from the face of the policy. Peace v. Northwestern Nat'l Ins. Co., 228 Wis.2d 106, 121, 596 N.W.2d 429 (1999).

Analytical Approach

¶ 9 In Nationwide Mutual Insurance Co. v. National REO Management, Inc., 205 F.R.D. 1, 9-10 (D.D.C.2000), the court observed the development of three approaches to interpreting pollution exclusion clauses. Some courts have held that the pollution exclusion clause "clearly and unambiguously" bars coverage for all liability arising from carbon monoxide emissions. Id. Courts adopting a second approach have held that the clause is unclear when applied to residential carbon monoxide leaks because the clause might be read to apply only to industrial or environmental pollution. Id. at 10. Finally, the third approach, recognized as a "minority" approach, is based on a "belief that the reasonable expectations of the insured should control over the actual contract language, even if it is unambiguous." Id.

¶ 10 Though Wisconsin courts have not previously addressed carbon monoxide in the context of a pollution exclusion clause, our supreme court has held that we do not look to the expectations of the insured in the face of a clear and unambiguous exclusion. See Peace, 228 Wis.2d at 121, 596 N.W.2d 429. Here, American Family asserts that the meaning of "pollutant" unambiguously includes carbon monoxide. The Langones counter that because carbon monoxide, like carbon dioxide, does not have the harmful effect of an irritant or contaminant unless or until it accumulates to certain levels, it is contextually ambiguous.

¶ 11 Our first task, therefore, is to determine whether American Family's policy language is susceptible to more than one reasonable interpretation.

The Plain Language of the Exclusion

¶ 12 American Family argues that the pollution exclusion clause unambiguously applies to damage caused by carbon monoxide when the plain meaning and dictionary definitions of policy terms and carbon monoxide are considered. American Family first cites to the broad policy definition of "pollutant," which includes "any ... gaseous or thermal irritant or contaminant, including ... vapor [and] fumes." Our supreme court has acknowledged that a pollution exclusion such as the one at issue here is intended to have "broad application." See Peace, 228 Wis.2d at 137, 596 N.W.2d 429.¹

¶ 13 We have also looked to dictionary definitions of terms not defined in the policy, for example: "irritant" means "the source of irritation, especially physical irritation"; "contaminant" means "one that contaminates"; and "contaminate" means "to make impure or unclean by contact or mixture." See id. at 122, 596 N.W.2d 429 (citing the AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE 406, 954 (3d ed.1992)). We also observe the definition for carbon monoxide: "a colorless odorless very toxic gas CO that burns to carbon dioxide with a blue flame, that is formed as a product of the incomplete combustion of carbon." WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY 336 (1993). Taken together, American Family argues, a pollutant includes any gas, fume or vapor that creates impurity by contact or mixture, or causes physical irritation; thus, carbon monoxide is a pollutant.

¶ 14 In Peace, the supreme court considered dictionary definitions of terms in a pollution exclusion clause with regard to lead in paint. Peace, 228 Wis.2d at 120, 122-23, 596 N.W.2d 429. It "[looked] at the text of the pollution exclusion clause in relation to the facts of [the] case" and concluded that the term "pollution" as specifically defined in the policy, was "not fairly susceptible to more than one construction." Id. at 136, 596 N.W.2d 429. Nonetheless, policy and dictionary definitions alone will not necessarily render the policy language unambiguous. See id. at 137, ...