Lead Opinion
Autо-Owners Insurance Company filed this declaratory judgment action contending that Lessie Reed’s claim of carbon monoxide poisoning against her landlord, C. Melvin Waldrop, is excluded from coverage under Waldrop’s commercial general liability (“CGL”) policy. The trial court denied Auto-Owners’ motion for summary judgment
Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56 (c). Wе apply a de novo standard of review and view the evidence in the light most favorable to the nonmovant. Matjoulis v. Integon Gen. Ins. Corp.,
So viewed, the record shows that Auto-Owners issued a CGL policy to Waldrop with an applicable policy period of January 12,2002 through January 12, 2003. Reed filed a complaint alleging that on December 27, 2002, she suffered carbon monoxide poisoning inside the home she rented from Waldrop as a result of his failure to keep the premises in repair and free from defects. After Waldrop provided notice of the claim to Auto-Owners, the insurer begаn defending Waldrop under a reservation of rights.
Waldrop’s policy provided in pertinent part:
We will pay those sums that the insured becomes legally obligated to pay as damages because of “bodily injury” or “property damage” to which this insurance applies. . . .
2. Exclusions.
This insurance does not apply to: . . .
(1) “Bodily injury” or “property damage” arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants:
(a) At or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to, any insured. . . .
Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.
Auto-Owners contends that the damages Reed seeks are excluded under the unambiguous terms of Waldrop’s policy because Reed’s claim satisfies all of the following conditions: (1) she alleges that her damages arose from the discharge, dispersal, or release of carbon monoxide; (2) she alleges that the discharge, dispersal, or
Reed and Waldrop conceded that the first two conditions were satisfied. They argued below and now on appeal that the breadth of the definition of “pollutants” renders the pollution exclusion ambiguous.
The trial court, without explanation, denied Auto-Owners’ motion for summary judgment. This appeal followed.
The words used in policies of insurance, as in all other contracts, bear their usual and common significance, and policies of insurance are, as in all other contracts, to be construed in their ordinary meaning. An unambiguous policy, as here, requires no construction, and its plain terms must be given full effect even though they are beneficial to an insurer and detrimental to the insured. The natural, obvious meaning of a policy provision is to be preferred over any curious, hidden meaning which nothing but the exigency of a hard case and the ingenuity of a trained and acute mind would discover.
(Citations and punctuation omitted.) Truitt Oil & Gas Co. v. Ranger Ins. Co.,
The policy in this case excludes coverage for damages resulting from the “disсharge, dispersal, seepage, migration, release or escape of pollutants” defined as “any solid, liquid, gaseous or thermal irritant or contaminant,” including “fumes.” Reed’s claim is that she has been injured by the discharge of carbon monoxide at the insured property. There is no dispute that carbon monoxide is a fume and a gaseous irritant or contaminant. Therefore, it falls clearly within the policy exclusion.
Although, as the dissent discusses, there are some states that have found to the contrary, this issue has already been decided in Georgia and therefore other state’s case law is not persuasive. In American States Ins. Co. v. Zippro Constr. Co.,
The asbestos in the American States case was not an environmental pollutant; it was completely contained inside the house and is indistinguishable from the carbon monoxide in this case. Accordingly,
Because there is Georgia law on point, we need not look to other state’s case law; however, as the dissent points out, there are numerous jurisdictions which agree with the holding in American States. See, e.g., Matcon Diamond, Inc. v. Penn. Nat. Ins. Co.,
Accordingly, for the reasons discussed above, we conclude that American States controls in this case. The trial court erred in denying Auto-Owners’ motion for summary judgment.
Judgment reversed.
Notes
Reed, relies on Kerr-McGee Corp. v. Ga. Cas. & Surety Co.,
Dissenting Opinion
dissenting.
I would affirm the trial court’s order denying Auto-Owners’ motion for summary judgment, and, therefore, I respectfully dissent.
The majority ignores the basic precept that a contract is ambiguous if it is susceptible of more than one reasonable construction.
Contrary to the majority’s opinion, this issue had not already been decided in Georgia. In fact, this is the first time we have been presented with the exact question of whether the pollution exclusion at issue is ambiguous because it defines “pollutants” in terms that can reasonably be interpreted in more than one way—either as including virtually any substance or chemical in existence or as including only environmental pollution. As a result, the cases cited by the majority, in which this Court stated generally that the absolute pollution exclusion is not ambiguous,
The “any irritant” definition of pоllutants should be read in the context of the full text of the exclusion and in the context of the purpose of the provision and the historical evolution of the text of the standard exclusion. The only defensible conclusion is that the exclusion at issue was intended to apply only to injury or damage caused by what is commonly considered environmental pollution.
In addition, under Georgia law, insurance contracts are to be read in accordance with the reasonable expectations of the insured where possible.
a. Full text of the exclusion. The pollution exclusion in Waldrop’s policy provided as follows:
This insurance does not apply to: . . .
f. (1) “Bodily injury” or “property damage” arising out of the actual, alleged or thrеatened discharge, dispersal, seepage, migration, release or escape of pollutants:
(a) At or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to, any insured;
(b) At or from any premises, site or location which is or was at any time used by or for any insured or others for the handling, storage, disposal, processing or treatment of waste;
(c) Which are or were at any time transported, handled, stored, treated, disposed of, or processed as waste by or for any insured or any person or organization for whom you may be legally responsible; or
*610 (d) At or from any premises, site or location on which any insured or any contractors or subcontractors working directly or indirectly on any insured’s behalf are performing operations:
(i) if the pollutants are brought on or to the premises, site or location in connection with such operations by such insured, contractor or subcontractor; or
(ii) if the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of pollutants.
Subparagraphs (a) and (d) (i) do not apply to “bodily injury” or “property damage” arising out of heat, smoke or fumes from a hostile fire.
As used in this exclusion, a hostile fire means one which becomes uncontrollable or breaks out from where it was intended to be.
(2) Any loss, cost or expense arising out of any:
(a) Request, demand or order that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of pollutants; or
(b) Claim or suit by or on behalf of a governmental authority for damages because of testing from, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of pollutants.
Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.
b. The exclusion is susceptible of more than one reasonable construction. By reading the key terms of the absolute pollution exclusion in isolation, as the majority doеs, the exclusion can be
admit of no natural or ordinary interpretation, . . . because it is unclear whether they refer to substances which ordinarily irritate or contaminate, substances which have in fact irritated or contaminated under these particular circumstances, regardless of their tendency to irritate or contaminate under most circumstances, or both.... [AJny substance could conceivably be an “irritant or contaminant” under the right circumstances.
(Citations and punctuation omitted; emphasis supplied.) Regent Ins. Co. v. Holmes, 835 FSupp. 579, 582 (II) (D. Kan. 1993) (applying Kansas law).
If, on the other hand, the word “pollutants” is given its usual connotation, and if the terms “irritant” and “contaminant” are read in the context of how they are used in the policy, that is, describing “pollutants,” the absolute pollution exclusion can be interpreted to apply only to injury or damage caused by what is commonly considered environmental pollution. Regional Bank of Colorado v. St. Paul Fire and Marine Ins. Co.,
c. Cases relied upon by the majority. The oldest case relied upon by the majority for the proposition that, under controlling Georgia law, coverage is excluded for injury or damage from any contaminant regardless of whether it is an environmental pollutant is Perkins Hardwood Lumber Co. v. Bituminous Cas. Corp.,
The primary case relied upon by the majority is American States Ins. Co. v. Zippro Constr. Co.,
The most recent case cited by the majority is Truitt Oil & Gas Co. v. Ranger Ins. Co. In that case, the insured argued that the definition of “pollutants” was ambiguous because the policy referred in various provisions to gasoline in several different ways, e.g., “your product,” “liquid products,” and “gas.” (Punctuation omitted.) Truitt Oil,
was drafted during the early 1980s and was incorporated into the standard form CGL policies in 1986. The purpose of the new exclusion was to replace the 1973 “sudden and accidental” exclusion because insurers were distressed by judicial decisions holding that the 1973 exclusion did not preclude coverage for gradual but unintentional pollution. Further, the absolute exclusion was designed to bar coverage for gradual environmental degradation of any type and to preclude coverage responsibility for government-mandated cleanups.
(Citations and punctuation omitted.) Andersen v. Highland House Co.,
[ijnsurance companies adopted standard pollution clauses in response to Congress’ enactment of broad, sweeping legislation directed at cleaning up and protecting the limited resources of the United States.... The passage of these new laws imposed greater potential economic burdens on insurance underwriters of comprehensive general liability policies.
(Citations omitted.) Westchester Fire Ins. Co. v. City of Pittsburg, 768 FSupp. 1463, 1469, n. 8 (D. Kan. 1991).
was wrought, not to broaden the provision’s scope beyond its original purpose of excluding coverage for environmental pollution, but rather to remove the “sudden and accidental” exception to coverage which... resulted in a costly onslaught of litigation. [Courts] would be remiss, therefore, if [they]*615 were to simply look to the bare words of the exclusion, ignore its raison d’ étre, and apply it to situations which do not remotely resemble traditional environmental contamination. The pollution exclusion has been, and should continue to be, the appropriate means of avoiding the yawning extent of potential liability arising from the gradual or repeated discharge of hazardous substances into the environment.
(Citations and punctuation omitted; emphasis in original.) American States Ins. Co. v. Koloms,
In summary, on this record Auto-Owners is not entitled to judgment as a matter of law based on the premise that all damages claimed by Reed arise from the discharge, dispersal or release of a pollutant within the terms of the policy’s pollution exclusion. We should affirm the trial court’s ruling.
I am authorized to state that Presiding Judge Johnson joins in this dissent.
See Hurst v. Grange Mut. Cas. Co.,
See section (a), infra, for the full text of the exclusion.
Truitt Oil & Gas Co. v. Ranger Ins. Co.,
See Kerr-McGee Corp. v. Ga. Cas. & Surety Co.,
See OCGA § 13-2-2; Richards v. Hanover Ins. Co.,
Richards v. Hanover Ins. Co.,
See, e.g., Regional Bank of Colorado v. St. Paul Fire and Marine Ins. Co.,
(Citations and punctuation omitted; emphasis in original.) American States Ins. Co. v. Koloms,
See also Regional Bank of Colorado v. St. Paul Fire and Marine Ins. Co.,
See also Westchester Fire Ins. Co. v. City of Pittsburg, 768 FSupp. at 1469, n. 9 (“Pollution clauses appear to contemplate long-term environmental degradation or, at the very least, an environment-wide exposure to extremely hazardous or toxic substances.”).
See, e.g., The American Heritage Dictionary of the English Language (4th ed. 2006) (“pollutant” means “[s]omething that pollutes, especially a waste material that contaminates air, soil, or water”; “pollution” means “[t]he act or process of polluting or the state of being polluted, especially the contamination of soil, water, or the atmosphere by the discharge of harmful substances”); The American Heritage Science Dictionary (2002) (“pollution” means “[t]he contamination of air, water, or soil by substances that are harmful to living organisms”).
I note that some of the other jurisdictions that have ruled that carbon monoxide, even when confined within a residence or other building, is a pollutant within the terms of the exclusion have done so reluctantly and have expressed concern about the resulting breadth of the exclusion. See Bernhardt v. Hartford Fire Ins. Co.,
Thus, it is not determinative that carbon monoxide is defined as a pollutant in the context of federal and state regulation of motor vehicle emissions. 42 USC § 7408 (a) (1); 40 CFR Part 50; OCGA § 12-9-41 et seq.
See section, (a), supra.
See also Richardson v. Nationwide Mut. Ins. Co.,