*1 REGENTS OF the BOARD OF UNI- MINNESOTA, et
VERSITY OF Petitioners, Appellants,
al.,
ROYAL INSURANCE COMPANY OF
AMERICA, American Insurance Great
Company, River Insurance North Com- al., Respondents.
pany, et C1-93-24,
No. C8-93-36 C5-93-186.
Supreme Court Minnesota. 17, 1994.
June *2 Jones, Seiben, Harvey N. Mi-
Michael R. LaVerdiere, Storm, Seiben, Polk, R. chael Hawn, P.A., Hastings and & Edward Jones Westbrook, Riley, Annetta J. Anderson J. Loadholt, III, Ness, Berly Motley, Richard- Poole, P.A., Charleston, SC, appel- for son & lants. Mansfield,
Stephen Foley, Foley Min- J. & neapolis, Ins. for Great American Co. Horstman, Robins, Kaplan, Miller Andrew Ciresi, Minneapolis, for North River Ins. & Co., et al. Ditzler, Royal Minneapolis, D. for
Austin America. Ins. Co. of MeHeffey, North River Ins. Laurence M. Co., Morristown, NJ, North Ins. for River Co. Berens, PA, Berens, Kelley
Michael & Brunner, Minneapolis and Thomas W. Laura Barthel, Washington, Foggan, A. A. Carol DC, for amicus curiae Ins. Environmental Litigation Assoc.
OPINION SIMONETT, Justice. “pollution exclusion” in the defen-
Does the
cov-
carriers’ insurance
exclude
dant
conclude in
erage for asbestos claims? We
it
not for the
this case
does
for the excess
policies but
part.
part
and affirm in
We reverse
early
University
1972 the
From 1969 to
asbestos-containing fire-
installed
Minnesota
materials,
by Asbes-
proofing
manufactured
buildings.
tospray Corporation, in some of its
Regents of the Univer-
In
the Board of
(hereinafter
sity and
of Minnesota
the State
sued,
others,
among
Regents”)
called “the
interest, H
Asbestospray
and its successor
(formerly
Corporation
A&
Construction
damages for the cost of re-
Spraycraft), for
buildings.
from the
moving the asbestos
Asbestospray
insurers
When
coverage,
A
denied
and H & Construction
agreement
insureds entered into an
the two
Shugart,
316 N.W.2d
pursuant
to Miller
(Minn.1982), confessing judgment
in fa-
million,
Regents
ing
vor of the
and as-
broad
for all sums
$1.6
the insured
against
signing
legally obligated
their claims
their
pay
damages
insurers
Regents.
personal injury
“caused
by an occurrence.”3
then commenced this action
*3
against
Royal
Compa-
defendants
Insurance
primary policies
The
contain the standard
ny,
Company,
North River Insurance
U.S.
exclusion,
1973 Form
which ex-
Company,
Fire Insurance
and Great Ameri-
cludes
Company.
can Insurance
trial
The
court
bodily injury
property damage arising
or
granted
Regents’
summary
motion for
discharge, dispersal,
out of the
reléase or
judgment, finding Miller-Shugart
settle-
smoke,
soot, fumes, acids,
escape
vapors,
of
policies,
ment reasonable and the insurers’
alkalis,
chemicals, liquids,
gases,
toxic
excess,
provide
both
and
cover-
irritants,
waste materials or other
contami-
age.1 Royal, North River and
Fire
U.S.
land,
pollutants
upon
nants or
into or
(hereinafter “respondent
compa-
atmosphere,
any
body
water course or
nies”) appealed
appeals
to the court of
on
water;
apply
this exclusion does not
multiple
appeals
issues.2 The court of
af-
discharge, dispersal,
if such
release or es-
except
pivotal
firmed the trial court
on the
cape is sudden and accidental.
coverage, finding
issue of insurance
that cov-
erage
“pollution
was excluded
exclu-
glance,
provision
At first
seems clear
Regents
sion” in the
Board
v.
enough.
appear
would
that if an insured
America,
Royal Ins. Co.
A.2d authority spectable holds that “sudden” has Moving the text of connotation, something temporal and means itself, argue exclusion first See, chemicals, abruptly. e.g., smoke, happens Lumber toxic and the other Indus., waste materials described in the Casualty v. Belleville mens Mut. Co. by-product exclusion are the of industrial (1990). 675, 568, 407 Mass. 555 N.E.2d fibers, out, pollution. they point Asbestos also, note, panels that two of our court of mineral, naturally occurring are a not a Compare on the issue. appeals have differed material, waste and hence are not contem Grinnell, (construing 432 N.W.2d plated But the exclusion. “unexpected” to mean or “unin “sudden” irritants, goes on to include “other tended”) Sylvester Bros. Dev. Co. contaminants, pollutants.” We would be 368, Great Cent. Ins. 480 N.W.2d 375-76 doing English language if disservice to the (“sudden” “abrupt”), (Minn.App.) pet. means fibers, say we were to that asbestos 1992). (Minn., Mar. rev. denied are a health hazard because of their irritant body, effects on the human were not an a word has than one Because more irritant. *5 meaning ambiguous. it is does not mean The depends being sense of a word on how it is land, upon atmosphere, 4. “Into or or used; only meaning applies if more than one any body watercourse or water.” of ambiguity within that context does arise. argue The further that as Here “sudden and accidental” modifies “dis bestos fibers are not released into the “atmo charge, place It refers not to the [etc.].” sphere” but into the air inside the build particular place in a but ment of waste to the ings, pollution and therefore the exclusion discharge escape of or the waste from that apply. does not The court of disa place. The word “sudden” is used in tandem greed, stating distinguish that to air between “accidental,” and building arbitrary the word “accidental” inside and outside a is an distinction. parlance in means unex unintended, pected Casualty or Bituminous (in “Atmosphere” ordinarily its understood Bartlett, 72, 76-77, Corp. v. Minn. 307 240 sense) physical “air,” is another name for 310, (1976), part 312-13 overruled in N.W.2d important but —and is this what is is air —it grounds, Rupp thought being particular place. on other Prahm v. Constr. of as in a We 389, (Minn.1979); say atmosphere would not a room 277 391 N.W.2d thus stuffy, stuffy. is but rather that the air is “unexpected” to mean construe “sudden” atmosphere think of We as the air surround- redundancy. is to a incon create seems ing planet, spoke our as when Hamlet of too, gruous, leakage seepage to think of a or (Act canopy, “this most excellent the air.” many years happening that occurs over ii.) II, it speak scene So is that of we suddenly. releasing atmosphere a balloon into the but difficulty concluding, We have no in the letting the air problem out of a tire. Our used, “atmosphere” context here that the term “sudden” is here how the term should be pollution understood when used in a exclu- opposite gradual. used to indicate the of sion. Consequently, we hold that the “sudden and exception pollution accidental” to the exclu- pollution This much is clear. The exclu- apply sion asbestos fibers re- initially sion is directed —at least it was —at gradually
leased over time from the insured’s involving pollution claims of the natural product. environment.6 Thus the exclusion is worded 6. hap- Concerns about the of natural wastes that had been allowed to accumulate prominent hazardly, period many years. environment became in the 1960s often over a See Rosenkranz, Note, happening spills. major with the oil This led E. Joshua Ex- Pollution Glass, growing Through Looking to a awareness that our natural re- clusion Clause (1986), being endangered by good sources were for a hazardous Geo.L.J. 1237 account of the (Ill.1991), concluded that when the the natural resources broadly encompass namely, setting, “atmosphere” part read as of the planet in natural this their word (ie., land, land, upon of water. atmosphere, bodies clause “into or whole clear, however, body the exclu- atmosphere, any less whether or water course or It is of water”), meant include contamination readily apparent pollu “it is sion setting. their damage resources outside natural applies property these tion exclusion arising discharge from the into Significantly, environment, part or onto the external some generic rather term “water” but not use thereof, rather than the release asbestos “any body or of wa- phrase watercourse building.” a fibers within ter,” description indicative of water streams, ponds or lakes. use “land,” “property,” instead of whether term II. personal, appears or likewise directed
real turn now excess Re- We to the And, land as natural resource. within U.S. contain spondent Fire’s think, context, “atmosphere,” we following exclusion: air. refers to ambient * * * This shall not to lia- saying are not here air inside bility or contamination outside, building differs from the air or land, water, personal proper- air or real intermingle. air do not the inside outside injuries damages resulting ty any Rather, within the context by an occurrence. therefrom caused air is not in the distinction happens the air to be. itself where Respondent policy has North River’s excess be- supply the air within When similarly exclusion.7 worded contaminated, is harmful to the comes *6 coverage Here is excluded for the building; of that controlled environment water, “land, or of air pollution contamination in of the air is the contamination personal property.” language or real or This surrounding harmful to the natural envi- not primary policies’ in the differs from used ronment, escapes until it into least not attempt No is made in the excess exclusion. personal to that environment so as cause identify particular pollu policies’ exclusion to injury not or claim —a or contaminants. No reference is made tants conclude, therefore, here. We that the made dispersal of to the or release a substance “atmosphere” pollution in the exclusion term But, impor place. most from contained primary under does not exclude the being polluted, the tantly, defining in what is pollution the or of policies for contamination language descriptive does not use exclusion building. air within only. natural environment Not of the level, may At one the make distinction we pollution personal land but the of real and are to draw a fine line. But words seem property is mentioned. Instead of “water deliberately policies in to chosen water,” body simply there course or is distinctions, we think construc make and the to And instead of atmo reference water. given “atmosphere” have the word tion we generic sphere, the uses the exclusion functionally contextually sound and here is “air.” arrived pertinent. Some other courts have conclude, therefore, the Thus Illinois unlike at the same conclusion. the We Fidelity policies, policy in the Supreme Court in States & the United policies 144 ex- Guaranty Co. v. Insulation excess includes —and therefore Wilkin 280, 287, policy coverage N.E.2d from contamina- Ill.2d Ill.Dec. cludes —the agreed policy apply litigation polluters sought shall to not ensued land, clean-up pollution the costs of and reme- transfer massive or contamination insurers, insurers, water, the dial action their and personal any property or or air real or through exclusionary provisions, sought to define injuries damages resulting or therefrom caused exposures. policy their and limit by an occurrence. reads: 7. North River's exclusion by Regents pollution
tion or asbestos fibers of air claim the installation of the building. fireproofing within a material not or “continuous
repeated” single place because it took on a remains, however, occasion, There one further and as to the release of the asbes- that, argue any event, fibers, issue. The tos the release was accidental. We claim the exclusion does to their think this is a tortuous miseharacterization fibers from happened. because the release asbestos dealing what We are not with the material “occur fireproofing the is not an dumping storing or of hazardous wastes at rence,” term is used in the as that disposal subsequent site and or discharge argument, exclusion. To understand this we escape surrounding into wastes interplay need to between what consider Here area. we have the manufacture policy excess covers and what it excludes. fireproofing containing asbestos, material product installation the manufactured ain policies provide coverage for losses building, subsequent and the release of the “caused an An “occurrence” occurrence.” view, asbestos fibers. The common sense we happening is defined as an accident “either think, causing is that the “occurrence” during policy period or a continuous pollution damage is the re- continuous or repeated exposure conditions which unex- peated exposure building’s interior to unintentionally injury pectedly and causes gradual release of the asbestos fibers. persons property during poli- tangible Indeed, Regents’ complaint alleges the cy period.”8 fireproofing “continuously material admitted building” asbestos fibers into the [sic] by an phrase, The same “caused occur- damage “property that the has rence,” been and is appears exclusion. Complaint, continuous.” Plaintiffs Count But “a here “occurrence” is defined as con- repeated XII. This exposure continuous or repeated exposure tinuous or to conditions precisely what the exclusion ex- unexpectedly unintentionally coverage. from cludes injury persons tangible property causes period.” during Significantly, hold, therefore, ex- word is omitted. “accident” The deletion precludes clusion of the policies excess cover- the word “accident” from the definition of age under the Re- “occurrence” in the exclusion makes gents’ claims. pollution damage clear that caused *7 in part Reversed part. and affirmed in “accident” is remain covered under the to coverage but occurrence-based PAGE, J., part took in no by damage repeated caused continuous or consideration decision of this case. exposure to be is not covered. GARDEBRING, (dissenting). Justice words, purposes pollu- In for other of the distinguished tion the insurer has are asked in this case to decide wheth- by between an and an occurrence accident er the in exclusions the carriers’ by exposure, gradual policies occurrence thus indicat- coverage exclude for ing the term restoration of “accident” to its based on claims release of asbestos inside meaning single, buildings. as a fortuitous event.9 We The majority concludes that the disagree do not understand to asbestos claims are excluded under the ex- Rather, that this policies distinction has been made. cess but included under the they argue inapplicable. is still the exclusion The critical distinction between the compare 8. by See to footnote 3 the definition of to "caused losses an occur coverage provision "occurrence” in purpose insuring rence.” The new of this clause primary policies. clarify towas that "an accident” could be either single event time fixed in or a continuous 1966, comprehensive general 9. Prior to lia- Abraham, happening. Kenneth S. Environmen bility policy covered losses "caused accident.” (1991); Liability tal Insurance Law 92-93 Rosen litigation phrase Because of over what this kranz, 6, supra note at 1241-42. meant, industry in 1966 the insurance switched ap- “hermetically sealed.” As the court of to be the use of said two doors, noted, primary policies, “[b]uildings as con- have win- “atmosphere” peals in the dows, poli- vents, in (par- to the “air” the excess and are not vacuum sealed trasted word majority ticularly university exclusions. with cies’ a state thousands Regents’ assertion as- in agrees university personnel going students into the “at- daily).” fibers were not released buildings bestos and out of the mosphere,” into the air inside the in nothing I can Because find the word buildings, and therefore concludes “atmosphere” meaning its limits primary policies air, respectfully outdoor I dissent. apply. majority’s rationale that while the TOMLJANOVICH, (dissenting). Justice is harm- pollution of the air inside of that ful to the controlled environment I concur with dissent Justice Gar- building, “the the air in a contamination of debring. surrounding building is not harmful environment, at least not until natural as to
escapes into that environment so cause injury
personal claim—a However, nothing
not made here.” case requires language
law or limited ah’ exclusion be building.
outside dictionary always
While definitions are determination, they
helpful making legal Shakespearean may useful be least as as In re Access to Law Enforcement Records ease, look, might In quotations. one Relating Daniel Arrest Peter example, to Third New Interna- Webster’s QUINN 10, 1992. on November (1971), Dictionary one tional where defi- C5-92-2526, C0-92-2529, Nos. C4-93- given atmosphere is air of a nition of “the and C8-93-134. C6-93-133 locality esp. as affected place [sic] * * An example characteristic particular of Minnesota. Supreme Court atmosphere given is “the close of the school- that, room,” indicating plainly rather at least 17, 1994. June Webster, according may “atmosphere” indoor, air. Fur- mean as well outdoor
ther, meaning beyond within contained dictionary, nothing in the there is com- understanding
mon sense of the word atmo- *8 any sense it to
sphere which in limits outdoor
air. agree
I with the court of that to
distinguish the air and the air between inside building arbitrary
outside a distinction. majority “may admits distinction to draw fine line.” It is indeed fine
seem
line, passes freely. through one which air majority would have us believe air properties changes its as moves
somehow building air
into or out of a or that the within from completely separate building. This is not the ease.
air outside the contained,
Buildings completely are not