Midwest Family Mutual Insurance Co. v. Wolters
2013 Minn. LEXIS 304
| Minn. | 2013Background
- Bart z hired Wolters as general contractor to build a home in Minnesota; Wolters carried a Midwest general liability policy with an absolute pollution exclusion.
- Policy defines pollutants as any gaseous emission or irritant or contaminant and excludes on-premises discharges connected with work.
- During construction Wolters arranged materials for an in-floor radiant heating system and installed a Munchkin boiler designed for natural gas but connected to propane by Wolters.
- Boiler warning label stated natural gas only; contractor Larson installed boiler but Wolters connected to propane line.
- Carbon monoxide detectors were installed; detectors may have been improperly powered, and CO later caused poisoning in Brewster and Bartz.
- CO exposure was determined to have originated from the Munchkin boiler, leading to claims of negligence and related lawsuits; Midwest sought declaratory relief arguing pollution exclusion barred coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether indoor carbon monoxide from a negligently installed boiler falls within the pollution exclusion. | Wolters argues exclusion covers traditional environmental pollution, not indoor CO. | Midwest contends CO indoors is a pollutant within the exclusion's scope. | CO indoors qualifies as a pollutant under the exclusion. |
| Ambiguity of the term ‘pollutants’ under the Midwest policy. | Appellants contend ‘pollutants’ is ambiguous and should be construed against insurer. | Midwest argues plain meaning applies; no ambiguity. | Pollutants definition held not ambiguous under majority view; CO is pollutant. |
| Whether the policy’s ‘reasonable expectations’ doctrine applies. | A reasonable insured would not expect CO to be excluded. | Reasonable expectations do not apply where exclusion is clearly designated. | Reasonable expectations doctrine does not apply to plainly designated exclusion. |
| What is the appropriate interpretive approach for absolute pollution exclusions? | Majority view limits exclusion to traditional pollution; minority argues broader scope. | Majority adopts plain-meaning approach; minority cites historical purpose of exclusion. | Court adopts majority view that CO can be within exclusion under plain-meaning approach. |
Key Cases Cited
- Board of Regents v. Royal Ins. Co. of Am., 517 N.W.2d 888 (Minn.1994) (plain, non-technical approach to pollution exclusions; asbestos example; insured favored on ambiguity)
- Hanson (Auto-Owners Ins. Co. v. Hanson), 588 N.W.2d 777 (Minn.App.1999) (non-technical, plain-meaning approach to pollution exclusion)
- Thiele v. Stich, 425 N.W.2d 580 (Minn.1988) (issues should be presented to trial court; general rule on waiver; reasonable expectations analyzed)
- Farmers Home Mut. Ins. Co. v. Lill, 332 N.W.2d 635 (Minn.1983) (interpretation of insurance contracts; plain language and reasonable understanding)
- Canadian Universal Ins. Co. v. Fire Watch, Inc., 258 N.W.2d 570 (Minn.1977) (interpretation of policy terms; reasonable person standard)
- Koloms v. American States Ins. Co., 687 N.E.2d 72 (Ill.1997) (pollution exclusion limited to traditional environmental pollutants (state law context))
- Grinnell Mut. Reinsurance Co. v. Wasmuth, 432 N.W.2d 495 (Minn.App.1989) (reasonable expectations considerations related to exclusions)
- Reg’l Bank of Colo. v. St. Paul Fire & Marine Ins. Co., 35 F.3d 494 (10th Cir.1994) (majority view on pollution exclusion scope; reasonable expectations context)
- Wozniak Travel, Inc. v. Gen. Cas. Co. of Wis., 762 N.W.2d 572 (Minn.2009) (ambiguity resolved in insured’s favor; construction against insurer)