United Fire & Casualty Company v. Titan Contractors Service, Inc
2014 U.S. App. LEXIS 8879
| 8th Cir. | 2014Background
- Titan Contractors applied TIAH, an acrylic concrete sealant, in an office; three employees sued Titan for chemical-related injuries (acute chemically-induced asthma, vocal cord dysfunction).
- Titan was insured under United Fire & Casualty’s commercial general liability policy, which contains an "absolute pollution exclusion" excluding injury caused by the discharge, dispersal, seepage, migration, release, or escape of "pollutants." Pollutant is defined to include "irritant."
- United defended under a reservation of rights and filed this declaratory-judgment action seeking a declaration that the pollution exclusion bars coverage (duty to defend and indemnify) and recovery of defense costs; Titan counterclaimed that United owes a duty to defend and indemnify.
- The district court granted summary judgment for Titan, holding TIAH was not a "pollutant;" United appealed the grant and the denial of its own summary-judgment motion.
- The Eighth Circuit reviewed de novo and focused on whether an ordinary insurance purchaser would unambiguously view TIAH as a "pollutant" (term includes "irritant"); court found TIAH’s safety data sheets and manufacturer warnings show it produces irritation and therefore unambiguously fits the policy’s pollutant definition.
- The panel vacated the district court’s judgment and remanded, declining to enter judgment for United because Titan also argued the underlying complaint did not allege the enumerated means of dissemination (discharge, dispersal, seepage, migration, release, or escape), an unresolved factual/legal question for the district court.
Issues
| Issue | Plaintiff's Argument (United) | Defendant's Argument (Titan) | Held |
|---|---|---|---|
| Whether TIAH is a "pollutant" under the policy (term includes "irritant") | TIAH is an irritant per its MSDS and manufacturer warnings, so it unambiguously fits the policy definition and triggers the absolute pollution exclusion | TIAH is a product routinely used by Titan; an ordinary insured would not expect the exclusion to bar core business risks (analogizing to Hocker Oil) | Held: TIAH unambiguously is a pollutant under the policy; pollution exclusion may apply (vacated district court ruling) |
| Applicability of Hocker Oil (gasoline-as-not-pollutant precedent) | N/A (United relies on policy text) | Hocker Oil creates ambiguity where substance is central to insured’s business, so exclusion should be construed against insurer | Held: Hocker Oil inapplicable here — different facts and not persuasive as Missouri Supreme Court precedent; court rejects Titan’s reliance on it |
| Duty to defend/indemnify based on exclusion | If exclusion applies, United owes no duty to defend or indemnify | If exclusion ambiguous or inapplicable, United owes duties to defend/indemnify | Held: Because TIAH is a pollutant, the district court’s grant for Titan based solely on non-pollutant finding is vacated; duty questions remanded for further consideration of dissemination allegations |
| Whether the underlying complaint alleged the enumerated dissemination (discharge, dispersal, seepage, migration, release, escape) | United: underlying complaint may not allege those means; if true, exclusion does not apply | Titan: complaint’s allegations suffice to trigger exclusion’s factual predicate | Held: Not decided on appeal; panel remanded for district court to consider this complex factual/legal issue first |
Key Cases Cited
- Bethel v. Darwin Select Ins. Co., 735 F.3d 1035 (8th Cir. 2013) (standard of review for policy interpretation and summary judgment)
- McCormack Baron Mgmt. Servs., Inc. v. Am. Guar. & Liab. Ins. Co., 989 S.W.2d 168 (Mo. 1999) (duty to defend arises when complaint alleges a claim potentially within coverage)
- Rice v. Shelter Mut. Ins. Co., 301 S.W.3d 43 (Mo. 2009) (unambiguous policy language enforced as written)
- Hocker Oil Co. v. Barker-Phillips-Jackson, Inc., 997 S.W.2d 510 (Mo. Ct. App. 1999) (gasoline may be ambiguous as a "pollutant" when central to insured’s business)
- Sargent Constr. Co. v. State Auto. Ins. Co., 23 F.3d 1324 (8th Cir. 1994) (interpretive limits on pollution exclusion application)
- Doe Run Res. Corp. v. Lexington Ins. Co., 719 F.3d 868 (8th Cir. 2013) (criticizing Hocker Oil as minority position)