State Farm Fire & Cas. Co. v. Dantzler

Decision Date12 September 2014
Docket NumberNo. S-12-1042,S-12-1042
Citation289 Neb. 1,852 N.W.2d 918
CourtNebraska Supreme Court
PartiesState 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.

OPINION TEXT STARTS HERE

Petition for further review from the Court of Appeals, Moore, Pirtle, and Bishop, Judges, on appeal thereto from the District Court for Douglas County, Kimberly Miller Pankonin, Judge. Judgment of Court of Appeals Reversed, and cause remanded with direction.

Michael A. Nelsen, of Marks, Clare & Richards, L.L.C., for appellant.

Patrick S. Cooper and David J. Stubstad, of Fraser Stryker, P.C., L.L.O., for appellee State Farm Fire & Casualty Company.

Heavican, C.J., Wright, Connolly, Stephan, McCormack, Miller-Lerman, and Cassel, JJ.
Syllabus by the Court

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. Contracts: Judgments: Appeal and Error. The meaning of a contract is a question of law, in connection with which an appellate court has an obligation to reach its conclusions independently of the determinations made by the court below.

3. Summary Judgment. If a genuine issue of fact exists, summary judgment may not properly be entered.

4. Summary Judgment. Not all issues of fact preclude summary judgment, but only those that are material.

5. Summary Judgment. In the summary judgment context, a fact is material only if it would affect the outcome of the case.

Wright, J.

NATURE OF CASE

State Farm Fire & Casualty Company (State Farm) brought an action for declaratory judgment, claiming its rental dwelling policy issued to Jerry Dantzler excluded coverage for personal injuries allegedly sustained by Dantzler's tenant as a result of exposure to lead-based paint. In cross-motions for summary judgment, State Farm and Dantzler requested a determination whether a policy exclusion precluded coverage for the tenant's personal injury claim. The district court sustained State Farm's motion for summary judgment and concluded as a matter of law that the pollution exclusion barred coverage under State Farm's policy.

In State Farm Fire & Cas. Co. v. Dantzler,1 the Nebraska Court of Appeals reversed the entry of summary judgment, concluding that in the absence of proof how the tenant was allegedly exposed to lead-based paint, it could not determine as a matter of law whether the pollution exclusion barred coverage. It reasoned that whether the alleged exposure to lead-based paint occurred through a “discharge, dispersal, spill, release or escape,” as specified in the exclusion, was a factual determination that depended upon the manner of exposure.2 We granted State Farm's petition for further review.

SCOPE OF REVIEW

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.3

The meaning of a contract is a question of law, in connection with which an appellate court has an obligation to reach its conclusions independently of the determinations made by the court below.4

FACTS

Dantzler owned a rental property in Omaha, Nebraska. He maintained insurance on the rental property with a rental dwelling policy issued by State Farm. The relevant provisions of the policy stated:

COVERAGE L—BUSINESS LIABILITY

If a claim is made or a suit is brought against any insured for damages because of bodily injury, personal injury, or property damage to which this coverage applies, caused by an occurrence, and which arises from the ownership, maintenance, or use of the insured premises, we will:

1. pay up to our limit of liability for the damages for which the insured is legally liable; and

2. provide a defense at our expense by counsel of our choice....

....

SECTION II—EXCLUSIONS

1. Coverage L—Business Liability [does] not apply to:....

i. bodily injury or property damage arising out of the actual, alleged or threatened discharge, dispersal, spill, release or escape of pollutants:

(1) at or from premises owned, rented or occupied by the named insured;

....

As used in this exclusion:

....

[P]ollutants” means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.(Emphasis in original.) Hereinafter, we refer to the exclusion relating to pollutants as the “pollution exclusion.”

David Chuol (David) and his minor child, Chuol Geit (Geit), were tenants of Dantzler's rental property. In March 2011, David and Geit sued Dantzler in the Douglas County District Court, alleging that Geit was exposed to high levels of lead poisoning due to lead paint contamination within the rental property. Dantzler tendered the claim to State Farm. It retained counsel to represent Dantzler but reserved its right to deny coverage.

State Farm filed an action for declaratory judgment against Dantzler, David, and Geit. It asked the district court to determine whether its policy excluded coverage for the lead-based-paint claim being brought against Dantzler. State Farm and Dantzler filed cross-motions for summary judgment.

State Farm's affidavit from a chemical toxicologist set forth common manners of exposure to lead-based paint. The toxicologist did not opine specifically how Geit was allegedly exposed to lead. Dantzler adduced evidence that he had not applied the lead-based paint found in the rental property. He asserted there was no genuine issue of material fact regarding the insurance coverage, because lead-based paint was not a “pollutant” under the terms of the policy and State Farm could not prove that Geit's alleged injuries were the result of a “discharge, dispersal, spill, release or escape of pollutants,” as described in the pollution exclusion.

The district court sustained State Farm's motion for summary judgment and overruled Dantzler's motion for summary judgment. Relying on our decision in Cincinnati Ins. Co. v. Becker Warehouse, Inc.,5 the court determined that lead was a pollutant as defined in the pollution exclusion and that such exclusion was not ambiguous. It concluded that Geit could have been exposed to lead only if it was discharged, dispersed, or released or had escaped from its location. The court found that the pollution exclusion barred coverage for Geit's personal injury claim and that State Farm had no duty to indemnify Dantzler.

Dantzler timely appealed. He assigned that the district court erred in concluding that the pollution exclusion barred coverage of his liability arising from the lead-based-paint claim.

The Court of Appeals concluded that lead found in paint was a pollutant within the meaning of the pollution exclusion but that there was a genuine issue of material fact whether there was a “discharge, dispersal, spill, release or escape,” which therefore prevented the entry of summary judgment in favor of State Farm.6 It reversed the district court's entry of summary judgment and remanded the cause for further proceedings.7 We granted further review.

ASSIGNMENTS OF ERROR

On further review, State Farm assigns, restated, that the Court of Appeals erred in (1) deciding that the pollution exclusion was ambiguous; (2) concluding that there was more than one reasonable interpretation of the pollution exclusion; (3) relying upon Danbury Ins. Co. v. Novella,8 instead of Cincinnati Ins. Co.9; and (4) concluding that there was a question of fact whether Geit was exposed to lead-based paint through a “discharge, dispersal, spill, release or escape,” which prevented the entry of summary judgment in favor of State Farm.

ANALYSIS

We are presented with the question whether the manner in which Geit was allegedly exposed to lead-based paint is an issue of material fact that prevents summary judgment in favor of State Farm. If a genuine issue of fact exists, summary judgment may not properly be entered.10 [N]ot all issues of fact preclude summary judgment, but only those that are material.” 11 In the summary judgment context, a fact is material only if it would affect the outcome of the case.12

The outcome of this case depends upon whether Geit's alleged injuries were caused by a “discharge, dispersal, spill, release or escape” of lead-based paint such that the pollution exclusion bars coverage. Dantzler's policy excluded coverage for 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 [Dantzler].” (Emphasis in original.) The parties do not dispute the Court of Appeals' determination that “lead found in paint” 13 is a pollutant as defined in the pollution exclusion. And there is no dispute that Geit's exposure to lead-based paint was alleged to have occurred on Dantzler's rental property. The application of the pollution exclusion to Geit's lead-based-paint claim thus depends upon whether his alleged injuries were caused by a “discharge, dispersal, spill, release or escape” of lead-based paint.

The Court of Appeals concluded that there was a genuine issue of material fact whether there was a “discharge, dispersal, spill, release or escape,” which prevented summary judgment.14 It adopted the reasoning in Danbury Ins. Co.15 that an individual could be exposed to lead-based paint without lead being discharged, dispersed, or released.16 Under that rationale, whether the pollution exclusion barred coverage of a particular claim of lead paint poisoning would hinge on the manner of exposure. Thus, because David and Geit had...

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8 cases
  • Mellin v. N. Sec. Ins. Co.
    • United States
    • New Hampshire Supreme Court
    • April 24, 2015
    ...to bar "coverage for only those injuries allegedly caused by traditional environmental pollution." State Farm Fire & Casualty Co. v. Dantzler, 289 Neb. 1, 852 N.W.2d 918, 923 & n.23 (2014) (citing cases). "Other courts interpret pollution exclusions as excluding coverage for all injuries al......
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    ...the result of a "discharge, dispersal, spill, release, or escape" (or something similar). See, e.g. , State Farm Fire & Cas. Co. v. Dantzler , 289 Neb. 1, 14-17, 852 N.W.2d 918 (Neb. 2014) (any manner of exposure to lead-based paint involves a "discharge, dispersal, spill, release or escape......
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    ...the plain and ordinary meaning of the policy language unambiguously excluded coverage. See, e.g., State Farm Fire & Cas. Co. v. Dantzler , 289 Neb. 1, 852 N.W.2d 918, 923-29 (2014) (listing itself among those courts that "interpret pollution exclusions as excluding coverage for all injuries......
  • Through Her Legal Guardians, Jacynda G. v. Mosaic
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    • Nebraska Court of Appeals
    • July 26, 2016
    ...that may be drawn from the facts and that the moving party is entitled to judgment as a matter of law. State Farm Fire & Cas. Co. v. Dantzler, 289 Neb. 1, 852 N.W.2d 918 (2014). See, also, Gonzalez v. Union Pacific RR. Co., 292 Neb. 281, 872 N.W.2d 579 (2015) (on motion for summary judgment......
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2 books & journal articles
  • CHAPTER 8 Comprehensive General Liability Insurance—The Pollution Exclusions
    • United States
    • Full Court Press Insurance for Real Estate-Related Entities
    • Invalid date
    ...Casualty Indemnity Exchange v. City of Sparta, 997 S.W.2d 545 (Mo. App. 1999). Nebraska: State Farm Fire and Casualty Co. v. Dantzler, 852 N.W.2d 918 (Neb. 2014); Cincinnati Insurance Co. v. Becker Warehouse, Inc., 635 N.W.2d 112 (Neb. 2001); Ferrell v. State Farm Insurance Co., 2003 Neb. A......
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    • Full Court Press Business Insurance
    • Invalid date
    ...Casualty Indemnity Exchange v. City of Sparta, 997 S.W.2d 545 (Mo. App. 1999). Nebraska: State Farm Fire and Casualty Co. v. Dantzler, 852 N.W.2d 918 (Neb. 2014); Cincinnati Insurance Co. v. Becker Warehouse, Inc., 635 N.W.2d 112 (Neb. 2001); Ferrell v. State Farm Insurance Co., 2003 Neb. A......

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