Nationwide Mutual Ins. Co. v. Richardson

• Citation: 348 U.S. App. D.C. 124,270 F.3d 948
• Decision Date: 02 November 2001
• Docket Number: No. 00-7203,00-7203
• Parties: (D.C. Cir. 2001) Nationwide Mutual Insurance Company, Appellee v. Antoinette Richardson, Appellant
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

Page 948

270 F.3d 948 (D.C. Cir. 2001)

Nationwide Mutual Insurance Company, Appellee v. Antoinette Richardson, Appellant

No. 00-7203

United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 10, 2001

Filed November 2, 2001

[Copyrighted Material Omitted] Appeal from the United States District Court for the District of Columbia (No. 99cv01322)

David P. Sutton argued the cause for appellant. With him on the brief was Robert J. Pleshaw.

Catherine M. Colinvaux argued the cause for appellee. With her on the brief was David P. Durbin.

Before: Ginsburg, Chief Judge, Edwards and Sentelle, Circuit Judges.

Opinion for the Court filed by Circuit Judge Edwards.

CERTIFICATION OF QUESTION OF LAW by the United States Court of Appeals for the District of Columbia Circuit to the District of Columbia Court of Appeals pursuant to D.C. Code § 11-723 (2001)

Harry T. Edwards, Circuit Judge:

The disposition of this appeal depends upon the proper application of District of Columbia law to resolve a dispute over the scope of a pollution exclusion clause in a liability insurance policy. The contested provision, which is common in commercial comprehensive general liability insurance policies, excludes liability coverage for injuries or damage arising out of events involving the release or escape of "pollutants." Courts around the country have divided in construing the scope of the pollution exclusion clause. Some courts read the clause expansively and thereby give broad reach to the exclusion, and others find the clause ambiguous and construe it narrowly in favor of insured parties seeking coverage.

The District of Columbia Court of Appeals has yet to consider the scope of the pollution exclusion clause under District of Columbia law. We are mindful that a "federal court ... should normally decline to speculate on ... a question of local doctrine." East v. Graphic Arts Indus. Joint Pension Trust, 107 F.3d 911, 911 (D.C. Cir. 1997) (quoting Delahanty v. Hinckley, 845 F.2d 1069, 1070 (D.C. Cir. 1988)). In deciding whether to certify such a question to the District of Columbia Court of Appeals, we ask whether District of Columbia law is "genuinely uncertain" with respect to the dispositive question, Dial A Car, Inc. v. Transp., Inc., 132 F.3d 743, 746 (D.C. Cir. 1998) (citing Tidler v. Eli Lilly & Co., 851 F.2d 418, 426 (D.C. Cir. 1988)), and whether the case "is one of extreme public importance," id. (citing Joy v. Bell Helicopter Textron, Inc., 999 F.2d 549, 563-64 (D.C. Cir. 1993)). Where there is a "discernable path for the court to follow," we do not avoid deciding the question. Id. District of Columbia law presents no such path in this case, and, while the scope of the pollution exclusion clause has been the subject of extensive litigation in other jurisdictions, we can find no common ground of opinion among the courts that have construed the clause. Finally, the question is one of significant import to the public. Because the pollution exclusion clause appears in the standard commercial comprehensive general liability policy, it potentially affects the insurance coverage of most businesses in the District of Columbia. See, e.g., Doerr v. Mobil Oil Corp., 774 So.2d 119, 123 n.1 (La. 2000) ("Some form of this pollution exclusion is part of the standard [commercial general liability] policy purchased by almost all large and small businesses since the mid-1980s.") (citation omitted).

Given the extreme public importance of the question, the likelihood of its recurrence in future cases, and the absence of a discernable answer within local law, we certify the following question of law to the District of Columbia Court of Appeals pursuant to D.C. Code § 11-723:

In light of the facts set forth below, does the pollution exclusion clause apply to injuries arising from alleged carbon monoxide poisoning?

I. Background

A. Procedural and Factual Background

The parties to this litigation have included Antoinette Richardson, an intervenor before the District Court and now the appellant; REO Management, Inc. ("REO"), the defendant before the District Court; and Nationwide Mutual Insurance Co. ("Nationwide"), the plaintiff before the District Court and now the appellee.

The facts in this case are largely undisputed. Ms. Richardson worked in the District of Columbia as a security guard in an apartment complex managed by REO Management. REO is organized under the laws of the District of Columbia, where it has its principal place of business. At the time of the events in question, REO held a comprehensive general liability insurance policy (Policy No. 52PR-147-539-0001M) ("the policy"), which it had purchased from Nationwide, an Ohio corporation. The policy provided liability protection for the apartment complex where Ms. Richardson worked.

In February, 1995, a gas furnace or furnaces in the apartment complex where Ms. Richardson worked allegedly began to leak carbon monoxide. Ms. Richardson and another person in the apartment complex claimed to have been overcome and disabled by carbon monoxide fumes. Ms. Richardson sued REO and two other defendants in District of Columbia Superior Court, alleging negligent maintenance of the furnaces and failure to supervise and train properly the people who worked on them. In her complaint, she stated that she was at all relevant times a resident of Maryland.

In May, 1999, Nationwide filed an action for a declaratory judgment in the United States District Court for the District of Columbia seeking a declaration that it was not obligated to defend or indemnify REO in Ms. Richardson's underlying Superior Court lawsuit. Nationwide asserted that the pollution exclusion clause in REO's insurance policy barred coverage for damages arising out of Ms. Richardson's claims. The policy provides, in relevant part:

This insurance does not apply to: ... f. Pollution (1) "Bodily injury" or "property damage" arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants.... Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.

Nationwide moved for summary judgment based, in part, on the pollution exclusion clause. In December 1999, Ms. Richardson filed a motion to intervene in the declaratory judgment action in the District Court. She alleged, inter alia, that the defendant REO was a "shell corporation," lacking any assets except the insurance policy. She further alleged that her interests could not adequately be represented by REO, because her negligence suit in Superior Court against REO gave rise to a conflict of interest.

The District Court issued an Order and Memorandum Opinion denying Ms. Richardson's motion to intervene as of right pursuant to Federal Rule of Civil Procedure 24(a) on the grounds that she lacked a sufficient interest relating to the subject of the action, because she had yet to receive an enforceable judgment in her underlying Superior Court suit. Instead, the District Court allowed her to intervene permissively pursuant to Rule 24(b), on the condition that she advance only those arguments that the defendant REO had failed to make. At the same time, the District Court granted Nationwide's motion for summary judgment, holding that the pollution exclusion clause "clearly and unambiguously" barred coverage for Ms. Richardson's alleged injuries. The District Court determined that District of Columbia law governed the case and that no court in the District of Columbia had interpreted the relevant language. While it acknowledged that courts in other jurisdictions have taken different approaches to interpreting pollution exclusion clauses, the District Court held that to find the clause ambiguous in this case "would be to seek out ambiguities in the contract where none exist." Ms. Richardson appealed.

B. History of the Pollution Exclusion Clause.

The pollution exclusion clause that appears in REO's insurance policy is part of a standard form commercial comprehensive general liability policy. The clause's history is wellknown. Before 1966, the standard comprehensive general liability form provided coverage for property damage and bodily injury caused by "accident." Jeffrey W. Stempel, Interpretation of Insurance Contracts § T1.1, at 826 (1994). Courts often interpreted the standard policy to cover injuries related to environmental pollution. Am. States Ins. Co. v. Koloms, 687 N.E.2d 72, 79 (Ill. 1997) (detailing the history of the pollution exclusion clause). The insurance industry responded by changing the policy to cover "occurrences" and attempting to define occurrences to exclude long-term environmental pollution. See id. at 79-80. Courts nonetheless continued to interpret the policy to cover damages resulting from such pollution. Id. at 80 (citing New Castle County v. Hartford Accident & Indem. Co., 933 F.2d 1162, 1197 (3d Cir. 1991)).

Beginning in 1970, insurers began adding an endorsement to the standard-form policy excluding coverage for 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." Stempel, supra, § T1.1, at 826-27 (citation omitted). The clause contained an exception for discharges that were "sudden and accidental." Id. at 826. The clause was incorporated into the standard comprehensive general liability policy itself in 1973. Koloms, 687 N.E.2d at 80. Much litigation ensued over the meaning of the "sudden and accidental" exception. See generally Stempel, supra, § T1.2 (describing the litigation).

Insurance companies responded to the litigation by adopting a new version of the exclusion in the mid-1980s, known as the "absolute" or "total" pollution exclusion...