Owens-Corning Fiberglas Corp. v. Allstate Ins. Co., OWENS-CORNING

• Decision Date: 24 February 1993
• Docket Number: No. CI90-2521,OWENS-CORNING,CI90-2521
• Citation: 74 Ohio Misc.2d 144,660 N.E.2d 746
• Parties: FIBERGLAS CORPORATION v. ALLSTATE INSURANCE COMPANY et al. *
• Court: Ohio Court of Common Pleas

Page 144

74 Ohio Misc.2d 144

660 N.E.2d 746

OWENS-CORNING FIBERGLAS CORPORATION v. ALLSTATE INSURANCE COMPANY et al. ^*

No. CI90-2521.

Court of Common Pleas of Ohio Lucas County.

Decided Feb. 24, 1993.

Connelly, Soutar & Jackson, William M. Connelly and Steven Smith, Toledo, Covington & Burling, Mitchell F. Dolin, Jackson Sharman and Eric Lasker, Washington, DC, Davis & Young Co., L.P.A., and Martin J. Murphy, Cleveland, for Owens-Corning Fiberglas Corporation.

Weston, Hurd, Fallon, Paisley & Howley, and Warren Rosman, Cleveland, Harrington, Foxy, Dubrow & Canter, Mark Flory and Melissa Harnett, Los Angeles, CA, for Associated International Insurance Company.

Spengler, Nathanson, McCarthy & Durfee, and Renisa Dorner, Toledo, for Columbia Casualty Company.

Haskell & Perrin, Marsha K. Ross and Audry S. Hanrahan, Chicago, IL, for Columbia Casualty Company.

RICHARD W. KNEPPER, Judge.

This matter is before the court on a motion for summary judgment jointly filed by Columbia Casualty Company ("Columbia") and Associated International Insurance Company ("Associated"). ¹ Upon review of the parties' memoranda, the relevant evidence, the transcript of the November 19, 1992 oral argument, and the applicable law, the court denies the motion.

I. PERTINENT BACKGROUND

This case is a declaratory judgment action filed by plaintiff, Owens-Corning Fiberglas Corporation ("OCF"), against several of its excess insurers ² with regard to asbestos-related products liability claims filed against OCF. OCF seeks a court declaration that each of the defendant-insurers is jointly and severally liable to indemnify OCF for asbestos liability it incurs during the relevant coverage period.

In this motion, Columbia and Associated ("the insurers") contend that asbestos fibers (the alleged cause of the underlying bodily injuries) are "pollutants" within the meaning of the insurance policies at issue and that they are relieved from any obligation to indemnify OCF by means of the "pollution exclusion" contained in both policies. These clauses exclude coverage for damages:

"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 watercourse or body of water; but this exclusion does not apply if such discharge, dispersal, release or escape is sudden and accidental."

OCF counters that pollution exclusion clauses pertain to dangers caused by the release of by-products during the manufacturing process rather than exposure to the product itself. Alternatively, OCF contends that even if asbestos fibers were within the purview of the pollution exclusion, the second portion of the exclusion, known as the "sudden and accidental" clause, precludes the application of the pollution exclusion.

II. STANDARD OF REVIEW

Summary judgment will be granted only when there is no dispute of material fact, the movant is entitled to judgment as a matter of law, and

construing the evidence most strongly against the movant, reasonable minds can come only to a conclusion adverse to the nonmovant. Harless v. Willis Day Warehousing Co. (1978), 54 Ohio St.2d 64, 66, 8 O.O.3d 73, 375 N.E.2d 46; Civ.R. 56(C). The burden of showing that no genuine issue exists as to any material fact falls upon the moving party. Id. Where, as in the instant case, the nonmovant bears the burden of producing evidence on an issue at trial, the nonmovant may not rely on the allegations of its pleadings in response to a summary judgment motion but must affirmatively demonstrate the existence of some triable issue of fact. Wing v. Anchor Media, Ltd. of Texas (1991), 59 Ohio St.3d 108, 570 N.E.2d 1095, paragraph three of the syllabus. Mere conjecture or speculation presented by the nonmovant, however, is insufficient, as the nonmovant must do more than merely present some "metaphysical doubt" as to the material facts. Matsushita Elec. Indus. Co. v. Zenith Radio Corp. (1986), 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538.

III. DISCUSSION

The exclusionary clause at issue contains two parts: (1) the exclusion itself and (2) the "sudden and accidental" exception to the exclusion. The court will address these two parts sequentially.

A. The Pollution Exclusion

Columbia and Associated advance a three-part argument to support the proposition that the "plain language" of the exclusionary clause bars coverage for the underlying bodily injury claims. First, they contend that the clause is unambiguous and that no interpretation is necessary. Second, they assert that asbestos constitutes an "irritant," "contaminant," or "pollutant" within the meaning of the clause. Third, Columbia and Associated maintain that the asbestos fibers, the alleged cause of the underlying bodily injuries, were released into the "atmosphere" within the meaning of the clause. For its part, OCF essentially contends that pollution exclusions are "aimed at intentional pollution of the environment" and do not apply to the sales and distribution of finished asbestos products.

Initially, if the terms of a contract are definite and certain, construction is unnecessary, and the court must apply the plain meaning of the contract:

"Where the terms in an existing contract are clear and unambiguous, this court cannot in effect create a new contract by finding an intent not expressed by the clear language employed by the parties." Alexander v. Buckeye Pipe Line Co. (1978), 53 Ohio St.2d 241, 246, 7 O.O.3d 403, 406, 374 N.E.2d 146, 150; see, also, E.S. Preston Assoc., Inc. v. Preston (1986), 24 Ohio St.3d 7, 10, 24 OBR 5, 8-9, 492 N.E.2d 441, 445.

These principles have been specifically applied to insurance contracts:

"When the language of an insurance policy has a plain and ordinary meaning, it is unnecessary and impermissible for this court to resort to construction of the language." Karabin v. State Auto. Ins. Co. (1984), 10 Ohio St.3d 163, 166-167, 10 OBR 497, 499, 462 N.E.2d 403, 406 (citing Travelers Indemn. Co. v. Reddick [1974], 37 Ohio St.2d 119, 121, 66 O.O.2d 259, 260-261, 308 N.E.2d 454, 455-456).

If, however, the terms of the contract are vague, construction becomes necessary, and the object of such construction is to give effect to the intent of the parties:

"A court will resort to extrinsic evidence in its effort to give clear effect to the parties' intentions only where the language is unclear or ambiguous * * *." Kelly v. Med. Life Ins. Co. (1987), 31 Ohio St.3d 130, 132, 31 OBR 289, 291, 509 N.E.2d 411, 413.

When interpreting contract language, moreover, courts theoretically are to employ a basic, commonsense approach:

"[C]ommon words appearing in a written instrument are to be given their plain and ordinary meaning unless manifest absurdity results or unless some other meaning is clearly intended from the face or overall contents of the instrument." (Emphasis added.) Alexander v. Buckeye Pipe Line Co. (1978), 53 Ohio St.2d 241, 245-246, 7 O.O.3d 403, 406, 374 N.E.2d 146, 150.

Additionally, exclusions are to be construed strictly against the insurer:

"Where exceptions, qualifications or exemptions are introduced into an insurance contract, a general presumption arises to the effect that that which is not clearly excluded from the operation of such contract is included in the operation thereof." (Emphasis added.) Home Indemn. Co. v. Plymouth (1945), 146 Ohio St. 96, 32 O.O. 30, 64 N.E.2d 248, paragraph two of the syllabus.

In this case, the term "asbestos" is not clearly listed in the exclusion. It, furthermore, is far from certain whether asbestos constitutes an "irritant," "contaminant," or "pollutant" within the meaning of the exclusion. Moreover, it is anything but certain that asbestos released from building materials inside or surrounding buildings constitutes an emission into the "atmosphere" within the context of the exclusion. Accordingly, the court finds the clause ambiguous, at least with regard to these issues. Construction of the exclusion is thus required, keeping in mind, of course, that such construction must be strictly against Columbia and Associated:

"[A] contract of insurance prepared by an insurer and in language selected by the insurer must be construed liberally in favor of the insured and strictly against the insurer if the language used is doubtful, uncertain or ambiguous." Am. Fin.

                Corp. v. Fireman's Fund Ins. Co.  (1968), 15 Ohio St.2d 171, 173, 44 O.O.2d 147, 148, 239 N.E.2d 33, 35.   See, also, King v. Nationwide Ins. Co.  (1988), 35 Ohio St.3d 208, 519 N.E.2d 1380 (applying the principle to exclusionary clauses.) 3
                

In construing the exclusion, the court will address (1) the clause's historical background; (2) whether asbestos constitutes an "irritant," "contaminant," or "pollutant" within the meaning of the exclusion; (3) whether the manner of the release of asbestos fibers has any bearing on the application of the exclusion; (4) whether the underlying bodily injuries in this case resulted from a release into the "atmosphere" within the meaning of the exclusion; and (5) particular facts in this case.

1. Historical Background

It is evident that the standard pollution exclusion was developed over twenty years ago in response to insurers' concerns over environmentally related losses and liabilities. See, generally, Note, the Pollution Exclusion Clause Through the Looking Glass (1986), 74 Geo.L.J. 1237; Protective Natl. Ins. Co. of Omaha v. Woodhaven (1991), 438 Mich. 154, 168-170, 476 N.W.2d 374, 380 (Cavanagh, J., dissenting); Westchester Fire Ins. Co. v. City of Pittsburg, Kansas (D.Kan.1991), 768 F.Supp. 1463, 1468-1469, fn. 8 and fn. 9 (citing several cases); Technicon Electronics Corp. v. Am. Home Assur. Co. (1989), 74 N.Y.2d 66, 74, 544 N.Y.S.2d 531, 533, 542 N.E.2d 1048, 1050; Ballard & Manus, Clearing Muddy Waters: Anatomy of the Comprehensive General Liability Pollution...