State Farm Fire & Cas. Co. v. Dantzler, A–12–1042
| Decision Date | 17 December 2013 |
| Docket Number | No. A–12–1042,A–12–1042 |
| Citation | 21 Neb.App. 564,842 N.W.2d 117 |
| Parties | State Farm Fire & Casualty Company, appellee, v. Jerry Dantzler, appellant, and David Chuol, individually and as father and next friend to Chuol Geit, and Chuol Geit, appellees. |
| Court | Nebraska Court of Appeals |
OPINION TEXT STARTS HERE
Appeal from the District Court for Douglas County: Kimberly Miller Pankonin, Judge. Reversed and remanded for further proceedings.
Michael A. Nelsen, of Marks, Clare & Richards, L.L.C., for appellant.
David J. Stubstad and Patrick S. Cooper, of Fraser Stryker, P.C., L.L.O., for appellee State Farm Fire & Casualty Company.
Moore,Pirtle, andBishop, Judges.
1. Summary Judgment: Appeal and Error. An appellate court will affirm a lower court's grant of summary judgment if the pleadings and admitted evidence show that there is no genuine issue as to any material facts or as to the ultimate inferences that may be drawn from the facts and that the moving party is entitled to judgment as a matter of law.
2. Summary Judgment: Appeal and Error. In reviewing a summary judgment, an appellate court views the evidence in the light most favorable to the party against whom the judgment was granted, and gives that party the benefit of all reasonable inferences deducible from the evidence.
3. Contracts: Appeal and Error. The construction of a contract is a matter of law, and an appellate court has an obligation to reach an independent, correct conclusion irrespective of the determinations made by the court below.
4. Insurance: Contracts. A pollution exclusion is unambiguous when it bars coverage for injuries caused by all pollutants, not just traditional environmental pollution.
State Farm Fire & Casualty Company (State Farm) brought a declaratory judgment action to determine whether a rental dwelling insurance policy issued to Jerry Dantzler covered lead-based-paint claims made against him by his tenants David Chuol and Chuol Geit. The district court for Douglas County found that the policy excluded coverage of the claims against Dantzler based on a “pollution exclusion,” and granted summary judgment in favor of State Farm. We conclude that there is a genuine issue of material fact as to whether there was a “discharge, dispersal, spill, release or escape” of the lead, as required for the policy's pollution exclusion to apply. Therefore, we reverse the judgment of the district court and remand the cause for further proceedings.
Dantzler owns a rental property in Omaha, Nebraska. In September 2006, Chuol and his minor child, Geit, moved into the property. In March 2011, Chuol filed a lawsuit against Dantzler in his own behalf and on behalf of his son, alleging that Geit was “exposed to high levels of lead poisoning” in the rental property due to high levels of lead paint contamination on the walls and elsewhere in the rental property, causing him serious and permanent injury. In the lawsuit, Chuol asserted claims for negligence, breach of implied warranty of habitability, nuisance, intentional infliction of emotional distress, negligent infliction of emotional distress, and a violation of 42 U.S.C. § 4852(d) (2006). At the time the lawsuit was filed against Dantzler, he had a “Rental Dwelling Policy” of insurance with State Farm for the rental property. Dantzler tendered defense of the claims against him to State Farm pursuant to his policy.
State Farm filed the instant declaratory judgment action seeking a declaration that the insurance policy does not provide coverage for claims made against Dantzler arising out of exposure to lead-based paint. Dantzler filed an answer and counterclaim seeking an order declaring that the policy at issue provides coverage for the claims against him which State Farm had wrongfully denied.
The rental dwelling policy of insurance issued to Dantzler by State Farm contains a “pollution exclusion,” which excludes from coverage, in pertinent part: “bodily injury or property damage arising out of the actual, alleged or threatened discharge, dispersal, spill, release or escape of pollutants ... at or from premises owned, rented or occupied by the named insured.” As used in the exclusion, the term “pollutants” is defined as “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.”
Both Dantzler and State Farm filed motions for summary judgment. Dantzler alleged that there were no genuine issues of material fact in regard to whether the insurance policy provided coverage for the claims made against Dantzler because lead-based paint is not a “pollutant” under the policy. State Farm alleged that there were no genuine issues of material fact because the pollution exclusion precluded coverage of the claims asserted in the lawsuit against Dantzler.
The trial court found that the pollution exclusion was unambiguous and that lead is a pollutant within the meaning of the exclusion. It further found that Geit could have been exposed to the lead only if it was “ ‘discharged, dispersed, released, or escaped’ ” from its location. Therefore, the trial court found that the pollution exclusion precluded coverage of the claims against Dantzler. The court granted summary judgment in favor of State Farm and denied Dantzler's motion for summary judgment.
Dantzler assigns that the trial court erred in finding that the lead-based-paint claims made against him were excluded from coverage under State Farm's insurance policy.
An appellate court will affirm a lower court's grant of summary judgment if the pleadings and admitted evidence show that there is no genuine issue as to any material facts or as to the ultimate inferences that may be drawn from the facts and that the moving party is entitled to judgment as a matter of law. Sutton v. Killham, 285 Neb. 1, 825 N.W.2d 188 (2013). In reviewing a summary judgment, an appellate court views the evidence in the light most favorable to the party against whom the judgment was granted, and gives that party the benefit of all reasonable inferences deducible from the evidence. Id.
The construction of a contract is a matter of law, and an appellate court has an obligation to reach an independent, correct conclusion irrespective of the determinations made by the court below. Model Interiors v. 2566 Leavenworth, LLC, 19 Neb.App. 56, 809 N.W.2d 775 (2011).
The issue in this case is whether it can be decided as a matter of law that the pollution exclusion in State Farm's insurance policy excludes the lead-based-paint claims made against Dantzler from coverage. In determining this issue, we must first decide whether lead is a “pollutant” as defined in the policy. In making this determination, we are guided by the Nebraska Supreme Court's decision in Cincinnati Ins. Co. v. Becker Warehouse, Inc., 262 Neb. 746, 635 N.W.2d 112 (2001), a case involving a pollution exclusion similar to the one at issue.
In Cincinnati Ins. Co., Becker Warehouse, Inc., owned a building where food products owned by various entities were stored. While constructing an addition to the warehouse, the construction company hired by Becker Warehouse applied a sealant to the concrete floor. The owners of the food products filed lawsuits against Becker Warehouse, alleging that xylene fumes from the sealant contaminated their food products. Becker Warehouse sought indemnity and defense from its insurer, the Cincinnati Insurance Company (Cincinnati). Cincinnati filed a petition for declaratory judgment seeking a declaration that Becker Warehouse's insurance policy did not provide coverage for the alleged contamination because of a pollution exclusion clause and that Cincinnati was not obligated to defend Becker Warehouse. Both parties filed motions for summary judgment, and the trial court sustained Cincinnati's motion and overruled Becker Warehouse's motion. The insurance policy issued to Becker Warehouse by Cincinnati contained a pollution exclusion nearly identical to the one at issue in the present case. The definition of “pollutants” in the Cincinnati policy included the same language as that found in the State Farm policy at issue, followed by an additional sentence which stated, “ ‘Pollutants include but are not limited to substances which are generally recognized in industry or government to be harmful or toxic to persons, property or the environment.’ ” Id. at 749, 635 N.W.2d at 116.
On appeal, Becker Warehouse alleged that the pollution exclusion in the policy was ambiguous, arguing in part that the exclusion applied only to traditional environmental claims. The Nebraska Supreme Court recognized that state and federal courts are split on whether an insurance policy's absolute pollution exclusion bars coverage for all injuries caused by pollutants or whether it applies only to injuries caused by traditional environmental pollution. It noted, however, that a majority of state and federal jurisdictions have held that absolute pollution exclusions are unambiguous as a matter of law and, thus, exclude coverage for all claims alleging damage caused by pollutants. Cincinnati Ins. Co. v. Becker Warehouse, Inc., supra, citing Nat'l Elect. Mfrs. v.Gulf Underwriters Ins., 162 F.3d 821 (4th Cir.1998) (applying District of Columbia law); Technical Coating v. U.S. Fidelity & Guaranty, 157 F.3d 843 (11th Cir.1998) (applying Florida law); Certain Underwriters at Lloyd's v. C.A. Turner Const., 112 F.3d 184 (5th Cir.1997) (applying Texas law); American States Ins. Co. v. Nethery, 79 F.3d 473 (5th Cir.1996) (applying Mississippi law); Brown v. American Motorists Ins. Co., 930 F.Supp. 207 (E.D.Pa.1996); City of Salina, Kan. v. Maryland Cas. Co., 856 F.Supp. 1467 (D.Kan.1994); Madison Const. v. Harleysville Mut. Ins., 557 Pa. 595, 735 A.2d 100 (1999); Deni Associates v. State Farm Ins., 711 So.2d 1135 (Fla.1998); Truitt Oil & Gas Co. v. Ranger...
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