852 N.W.2d 918
Neb.2014Background
- State Farm sought a declaratory judgment that its rental dwelling policy excludes coverage for a lead-paint injury claim against Dantzler.
- Lead-based paint on Dantzler’s rental property was alleged to have caused lead poisoning to Geit, a tenant; exposure theory was disputed.
- Policy excludes bodily injury arising from discharge, dispersal, spill, release or escape of pollutants at or from the insured premises; paint lead is defined as a pollutant.
- District Court granted State Farm summary judgment; pollution exclusion barred coverage per Cincinnati Ins. Co. v. Becker Warehouse, Inc.; Court of Appeals reversed, finding material fact about exposure.
- Nebraska Supreme Court granted review to determine whether the manner of exposure to lead-based paint is a material fact and whether the pollution exclusion is unambiguous.
- Conclusion: pollution exclusion is unambiguous and applies to lead-based-paint exposure; district court’s summary judgment was proper and the Court of Appeals’ reversal was incorrect.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the pollution exclusion bars coverage for lead-based paint exposure. | Dantzler: exclusion requires a discharge/dispersal/escape; exposure without separation may be outside the exclusion. | State Farm: lead exposure entails separation/dispersal of paint; any exposure involves discharge or dispersion of paint. | Yes; exclusion applies to lead-based paint exposure. |
| Whether the manner of exposure to lead-based paint creates a genuine issue of material fact. | Dantzler: factual dispute about how exposure occurred precludes summary judgment. | State Farm: manner of exposure is not material to applying the exclusion. | No; manner of exposure is not a material fact for applying the exclusion. |
| Whether Nebraska follows a broad or environmental-limited reading of the pollution exclusion in lead-poisoning cases. | Dantzler urged Danbury-style environmental reading limiting exclusion. | State Farm urged broad, plain-meaning interpretation of exclusion. | Nebraska adopts a broad, plain-meaning interpretation; Danbury-like narrowing rejected. |
| Does lead-based paint constitute a pollutant under the policy’s exclusion? | Dantzler: rely on environmental-narrowing readings; paint may not be a pollutant. | State Farm: lead paint qualifies as a pollutant under the exclusion. | Yes; lead-based paint is a pollutant under the exclusion. |
Key Cases Cited
- Cincinnati Ins. Co. v. Becker Warehouse, Inc., 262 Neb. 746, 635 N.W.2d 112 (Neb. 2001) (pollution exclusion interpreted as unambiguous and broad)
- Ferrell v. State Farm Ins. Co., No. A-01-637, 2003 WL 21058165 (Neb. App. 2003) (recognizes application of Cincinnati framework to pollution exclusions)
- Danbury Ins. Co. v. Novella, 45 Conn. Supp. 551, 727 A.2d 279 (Conn. Super. 1998) (environmental reading of pollution exclusion criticized in Nebraska context)
- Peace v. Northwestern Nat. Ins. Co., 228 Wis.2d 106, 596 N.W.2d 429 (Wis. 1999) (lead-paint exposure movement analyzed; supports broad exclusion reading)
- Sphere Drake Ins. Co. P.L.C. v. Y.L. Realty Co., 990 F. Supp. 240 (S.D.N.Y. 1997) (discussed movement of pollutants; influences environmental readings)