Omega Protein, Inc. v. Evanston Ins. Co., 2020-CA-01097-SCT

• Court: United States State Supreme Court of Mississippi
• Citation: 336 So.3d 128
• Docket Number: 2020-CA-01097-SCT
• Parties: OMEGA PROTEIN, INC. v. EVANSTON INSURANCE COMPANY
• Decision Date: 31 March 2022

336 So.3d 128

OMEGA PROTEIN, INC.
v.
EVANSTON INSURANCE COMPANY

NO. 2020-CA-01097-SCT

Supreme Court of Mississippi.

March 31, 2022
MOTION FOR REHEARING FILED: February 3, 2022

ATTORNEYS FOR APPELLANT: FREDRICK B. FEENEY, II, SUSAN F. E. BRUHNKE, Gulfport

ATTORNEYS FOR APPELLEE: ROBERT DOUGLAS MORGAN, BENJAMIN COLLIER LEWIS, Jackson

BEFORE RANDOLPH, C.J., COLEMAN AND CHAMBERLIN, JJ.

ON MOTION FOR REHEARING

COLEMAN, JUSTICE, FOR THE COURT:

¶1. The motion for rehearing is denied. The original opinion is withdrawn, and this opinion is substituted.

¶2. On the morning of Monday, July 28, 2014, an explosion occurred at the facility of Omega Protein, Inc., in Moss Point, Mississippi. The explosion killed one man and seriously injured several others. Multiple lawsuits were filed against Omega in the United States District Court for the Southern District of Mississippi in Gulfport. Colony Insurance Company filed a declaratory judgment action in Jackson County Circuit Court seeking a declaration that it did not cover bodily injuries arising out of the Moss Point facility explosion. Evanston Insurance Company intervened also seeking a declaration of no coverage for the same injuries. Evanston provided a $5 million excess liability policy, which provided coverage after Colony's $1 million policy was exhausted. Because Colony settled one of the underlying personal injury cases for $1 million (the limits under its policy), Omega sought excess coverage from Evanston for the injuries that occurred at its plant. A special master was appointed, and the trial court granted Evanston's motion for summary judgment, finding that the pollution exclusion in the insurance contract barred coverage. Omega and Evanston appealed the grant of summary judgment.

FACTS AND PROCEDURAL HISTORY

¶3. Omega Protein, Inc., entered into a master service contract with Accu-fab and Construction, Inc., to perform welding and other fabrication work at their facility in Moss Point, Mississippi. According to the Master Service Contract, Accu-fab was required to have commercial general liability insurance that named Omega as additional insured. Accu-fab purchased a $1 million primary policy issued by Colony Insurance Company and a $5 million excess policy issued by Evanston Insurance Company.

¶4. Per the agreement between Omega and Accu-fab, Accu-fab was to perform welding and other fabrication work on a large metal storage tank used for the temporary

336 So.3d 130

storage of stickwater. Stickwater is a liquid composed of water, fish oil, and fish solids. On July 28, 2014, an explosion occurred at the Omega plant while certain Accu-fab workers were welding and grinding on a large metal tank that was used for the temporary storage of stickwater. As a result of the explosion, one of Accu-fab's workers, Jerry Lee Taylor, II, was killed, another was seriously injured, and others suffered less serious injuries.

¶5. Taylor's estate sued Omega alleging that the explosion was caused by the ignition of explosive gases inside the stickwater storage tank. Omega tendered defense and indemnity of Taylor's estate's lawsuit to Colony, as primary insurer, and Evanston, as following-form excess insurer. Colony filed the instant declaratory judgment action, seeking a declaration of no coverage for bodily injury based on the pollution exclusion in its policy. Evanston intervened and denied coverage based on, among other things, the substantially similar pollution exclusion in its own policy. Omega and Taylor's estate settled, and Colony contributed $1 million, an amount equal to the applicable policy limits.

¶6. In the declaratory judgment action, Omega filed motions for partial summary judgment, alleging that the pollution exclusion did not apply and that the primary non-contributory clause was ambiguous and thus inapplicable to Omega in connection with the explosion. Evanston also filed a motion for summary judgment, arguing that Omega was not an additional insured under the Colony policy and, therefore, likewise was not an additional insured under the excess policy issued by Evanston. Evanston further argued that Omega was not entitled to indemnity because there were no factual allegations of negligence against Accu-fab in the underlying cases and also because its own pollution exclusion barred Omega's claims.

¶7. Robert L. Gibbs was appointed as special master in the case to address the motions for summary judgment and recommended that the trial court find that coverage was barred under the pollution exclusion and that Omega qualified as additional insured under the policy in addition to Evanston's coverage's being triggered by the $1 million payment by Colony. The trial court granted Evanston's summary judgment motion. Omega appealed, and Evanston cross-appealed.

STANDARD OF REVIEW

¶8. The Court reviews de novo a grant or denial of summary judgment. Venture, Inc. v. Harris , 307 So. 3d 427, 431 (Miss. 2020) (quoting Double Quick, Inc. v. Moore , 73 So. 3d 1162, 1165 (Miss. 2011) ). "Summary judgment is appropriate when ‘the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue [as to] any material fact and that the moving party is entitled to a judgment as a matter of law.’ " Id. (quoting Miss. R. Civ. P. 56(c) ).

DISCUSSION

I. Whether the trial court erred by finding that the pollution exclusion contained in the insurance policy issued by Evanston applied.

¶9. Omega contends that the trial court erred by adopting the findings of Special Master Robert Gibbs. Gibbs found that the pollution exclusion contained in the insurance policy issued to Accu-fab by Evanston applied to bar coverage of the personal injury claims arising from the July 2014 explosion. The Evanston pollution exclusion at issue states in relevant part:

This policy shall not apply:

1. To "Ultimate Net Loss":

336 So.3d 131

a. arising out of or contributed to in any way by the actual, alleged or threatened discharge, dispersal, release, migration, escape, or seepage of pollutants.... As used in this exclusion, pollutants means any solid, liquid, gaseous, or thermal irritant or contaminant including smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste. Waste includes material, to be recycled, reconditioned, reclaimed or disposed of.

¶10. When reviewing an insurance policy, the Court's role is "to render a fair reading and interpretation of the policy." Corban v. United Servs. Auto. Ass'n , 20 So. 3d 601, 609 (Miss. 2009) (citing Noxubee Cnty. Sch. Dist. v. United Nat'l Ins. Co. , 883 So. 2d 1159, 1165 (Miss. 2004) ). More importantly, "[l]anguage in exclusionary clauses must be ‘clear and unmistakable,’ as those clauses are strictly interpreted." Id. at 615 (quoting U.S. Fid. & Guar. Co. of Miss. v. Martin , 998 So. 2d 956, 963 (Miss. 2008) ). Additionally, limitations or exclusions on coverage must be construed in favor of the insured and against the insurer. Lewis v. Allstate Ins. Co. , 730 So. 2d 65, 68 (Miss. 1998).

¶11. Further, "[i]f a contract contains ambiguous or unclear language, then ambiguities must...