Headwaters Resources, Inc. v. Illinois Union Insurance, 913 F. Supp. 2d 1210

Seven commercial general liability policies issued to Headwaters, Inc. and affiliates by Illinois Union and ACE American from 2003–2009.
Headwaters Resources and related entities allege breach of contract and bad faith for denying coverage of two Virginia lawsuits without meaningful investigation.
The Virginia actions (Fentress and Sears) filed in 2009 allege pollution-related bodily injury and property damage from coal ash at the Fentress Site, with involvement by VFL Technology/Headwaters entities.
Insurers declined coverage on November 9, 2009, relying on pollution exclusions; underwriting files showed Headwaters’ fly ash business and industry practices.
The court applies Utah law: duty to defend hinges on policy language and underlying allegations; extrinsic evidence only if coverage is uncertain.
Court grants summary judgment for defendants on both breach of contract and bad faith claims.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Do pollution exclusions preclude coverage for Fentress and Sears under the 2003-2004 Policy?	Headwaters contends exclusions may not bar coverage given factual complexities.	Illinois Union and ACE American argue the complaints allege pollutants-caused injury, triggering exclusions.	Yes; pollution exclusion precludes coverage under the 2003-2004 Policy.
Do remaining policies' pollution exclusions preclude coverage for Fentress and Sears?	Headwaters argues exclusions do not clearly preclude coverage; favors narrow construction.	Insurers assert remaining policies' exclusions, narrowly construed, preclude coverage for traditional pollution claims.	Yes; remaining policies' pollution exclusions preclude coverage.

Alf v. State Farm Fire and Cas. Co., 850 P.2d 1272 (Utah 1993) (contract interpretation favors plain language; ambiguous terms construed against insurer)
Allen v. Prudential Prop, and Cas. Ins. Co., 839 P.2d 798 (Utah 1992) (contract interpretation and insurance-policy construction principles)
Fire Ins. Exch. v. Oltmanns, 285 P.3d 802 (Utah Ct. App. 2012) (influences standards for good faith and handling of insurance disputes)
Equine Assisted Growth and Learning Ass’n v. Carolina Cas. Ins. Co., 266 P.3d 733 (Utah 2011) (context for insurance coverage interpretations and exclusions)
Therkelsen v. Fire Ins. Exchange, 27 P.3d 555 (Utah 2001) (policy-exclusion interpretation and insurer duties)
Black v. Allstate Ins. Co., 100 P.3d 1163 (Utah 2004) (good faith and duty to investigate claims)