Once again we address the scope of the absolute pollution exclusion in an insurance policy under Texas law. Concluding that the exclusion unambiguously applies to exclude liability coverage for injuries caused to Kaia Alvarado by the pollutant carbon monoxide seeping, discharging, releasing and dispersing into an аpartment owned by Appellant and leased by Kaia’s mother, we AFFIRM the district court’s grant of summary judgment.
I. Background
Appellant Country Oaks Apartments Ltd. (Country Oaks) purchased a Commercial General Liability (CGL) policy from Appellee Nautilus Insurance Company (Nautilus). Some time during the policy period, some workers accidentally blocked the vеnt to the furnace in several Country Oaks apartments, including the one in which Kelly Schenks, who was pregnant with Kaia, lived. As a result, carbon monoxide that otherwise would have been dispersed into the outside atmosphere was dispersed into the apartment. Tragically, young Kaia was born with a number of difficulties that continue to this day, including almost daily seizures; her family attributes these conditions to her in útero exposure to the carbon monoxide. 1
Schenks sued Country Oaks in a Texas state court on behalf of Kaia, and Country Oaks tendered the defense of that case to Nautilus. Nautilus, in turn, refused to defend, contending that it owed no duty to defend or indemnify due to its policy’s absolute pollution exclusion. That exclusion says that coverаge does not apply to:
f. Pollution
(1) “Bodily injury” or “property damage” which would not have occurred in whole or in part but for the actual, alleged, or threatened discharge, dispersal, seepage, migration, release, or escape of “pollutants” at any time.
The policy defines the term “pollutant” as “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes material to be recycled, reconditioned or reclaimed.”
The exclusion quoted above was added to the policy by way of an amendatory endorsement. The original text of the policy contained a pollution exclusion clause that was amended by the above-quoted endorsement. The pollution exclusion clause in the original text of the policy included the following language: “However, this subparagraph [the original exclusion] does not apply to: (i) bodily injury if sustained within a building and caused by smoke, fumes, vapor or sоot from equipment used to heat that building;.... ”
Nautilus then filed the instant declaratory judgment action to determine its duties. Nautilus moved for summary judgment on the duty to defend and indemnify. Country Oaks cross-moved on its counterclaim seeking a defense and associated fees and costs. The district court granted summary judgment in full to Nautilus, and denied summary judgment to Country Oaks which timely appealed. Though not a party to the declaratory judgment action, Kaia’s family filed an amicus brief before the district court, as well as this court, and participated in oral argument in this court.
II. Standard of Review
This court reviews the district court’s grant of summary judgment de novo, applying the same standards as the district court.
Adams v. Travelers Indem. Co.,
III. Discussion
A. Rules of Insurance Contract Construction
Under Texas law, which applies to this diversity case,
[t]he eight-corners rule provides that when an insured is sued by a third party, the liability insurer is to determine its duty to defend solely from terms of the poliсy and the pleadings of the third-party claimant. Resort to evidence outside the four corners of these two documents is generally prohibited.
GuideOne Elite Ins. Co. v. Fielder Rd. Baptist Church,
In this case, Nautilus is not arguing about whether the incident in question was an “occurrence” under the policy. It rests its denial solely upon the single exclusionary endorsement. “[W]hen the plaintiffs petition makes allegations which, if proved, would place the plaintiffs claim within an exclusion from coverage, there is no duty to defend[J”
Gulf States Ins. Co. v. Alamo Carriage Serv.,
However, Texas courts construe insurance contracts under the same rules applicable to contracts generally.
Nat'l Union Fire Ins. Co. v. CBI Indus., Inc.,
An insurance policy is only ambiguous if its plain language is amenable to more than one reasonable interpretation.
Certain Underwriters at Lloyd’s London v. C.A. Turner Constr. Co.,
Thus, this case presents purely legal questions: is carbon monoxide a “pollutant” within the meaning of the policy and, if so, did it “discharge,” “disperse,” “release,” or “seep” into the apartment in quеstion? We address each question in turn.
B. Is Carbon Monoxide a “Pollutant’’?
Country Oaks contends that carbon monoxide, even at toxic levels, is not a “pollutant” within the meaning of the pollution exclusion. Under the pollution exclusion, “pollution” means “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acid, alkalis, chemicals, or wastе.”
Country Oaks admits that carbon monoxide is a gas. It contends, however, that carbon monoxide is not an “irritant or contaminant,” because it does not generally or probably irritate or contaminate. Rather, Country Oaks notes that carbon monoxide is a naturally occurring substance in the environment that individuals encounter at various concentrations on a daily basis.
This circuit has explicitly rejected the argument that a substance must generally or usually act as an irritant or contaminant to constitute a “pollutant” under the pollution exclusion. In
Am. States Ins. Co. v. Nethery,
It is true, as Country Oaks notes, that
Nethery
applied Mississippi, as opposed to Texas, law.
Here, Schencks’s petition alleges that she encountered a strong enough concentration of carbon monoxide to cause severe and permanent injuries to Kaia in útero. These allegations clearly involve a “pollutant” as defined by the policy. This is particularly true when we examine the original version of the exclusion for “Pollution” (contained in the original policy) which excepted from the exclusion bodily injury sustained within a building “and caused by ... fumes [or] vapor ... from equipment used to heat the building.” The exception covers Kaia’s situation and would have negated application of the exclusion. The amendatory endorsement (bearing the title “TOTAL POLLUTION EXCLUSION ENDORSEMENT”) removed this exception from the exclusion. It could not be clearer.
C. Did the Carbon Monoxide Disperse, Discharge, Seеp, or Release?
Country Oaks also contends that Schencks’s pleadings do not allege that Kaia’s injuries resulted from the “discharge, dispersal, seepage, migration, release, or escape” of carbon monoxide.
The relevant clause of the pollution exclusion states that there is no coverage for “ ‘bоdily injury’ ... which would not have occurred
in whole or in part
but for the ... alleged ... discharge [or] release ... of ‘pollutants.’ ” (emphasis added). “To ‘discharge’ a pollutant means to emit it.”
Zaiontz v. Trinity Universal Ins. Co.,
Examining the allegations of the underlying petition, Schencks alleges that unusually high levels of carbon monoxide accumulated in her apartment after her
Country Oaks contends, without citation to authority, that the discharge or release of a pollutant, as defined by the pollution exclusion, requires a “more robust event” than the normal emission of carbon monoxide from a home appliance. But the pollution exclusion does not say this; rather, the exclusion applies, without qualification, to any “discharge, dispersal, seepage, migration, release, or escape” of a “pollutant.” Thus, as long as a “pollutant” is emitted through one of the enumerated mechanisms and causes bodily injury, the exclusiоn applies to bar coverage. If the parties intended to impose a “robust” requirement, they could have said so — and, indeed, the prior version of the policy would have excepted this event. As it stands, however, nothing in the policy permits distinguishing between “active” and “passive” pollutants.
Country Oaks also contends that the pollution exclusion does not apply to “contained pollutants.” Again, there is no support for this limitation in the exclusion’s plain language. In terms of movement, the pollution exclusion requires only that the “pollutant” be, among other things, “discharged,” “dispersed,” or “released.” Here, the requisite movement clearly occurred becаuse the carbon monoxide at issue accumulated only after being discharged from Schencks’s furnace. The mere fact that the carbon monoxide accumulated in the contained space of an apartment, as opposed to the environment generally, does not change this analysis, as numerous courts applying Texas law have recognized.
See Turner Constr.,
substances need not be released into the surrounding environment to qualify as pollutants for purposes of a pollution exclusion clause. Thus, a pollution exclusion clause applies whenever a pollutant causes harm by a physical mechanism enumеrated in the policy, irrespective of where the injury took place or whether the pollutant was released into the environment.
Noble Energy, Inc. v. Bituminous Cas. Co.,
Country Oaks further contends that the pollution exclusion should only apply to injuries occurring in the workрlace, as opposed to homes or apartments. But, again, this distinction, however reasonable, is simply not made by the language of the pollution exclusion; the fact that most injuries implicating the pollution exclusion have occurred at work sites cannot change what the exclusion explicitly says.
Finally, Country Oaks seems tо argue that the injury-producing event in this case was not the “release” or “discharge” of carbon monoxide, but rather its improper confinement in Schencks’s apartment due to the obstructed vent. We disagree
In sum, the emission of carbon .monoxide from a furnace into an apartment unambiguously satisfies the pollution exclusion’s requirement of a “discharge, dispersal, seepage, migration, release, or escape.” It is irrelevant that a reasonable insured might not expect this result,
4
or that, given sufficient imagination, we can think of ways — not presented here — in which enforcement of this exclusion would lead to absurd results.
5
See Forbau v. Aetna Life Ins. Co.,
D. Duty to Indemnify
The district court also granted summary judgment to Nautilus on the duty to indemnify. Generally speaking, the duty to indemnify is decided only after the underlying liability case is concluded. However, where an exclusion that precludes the duty to defend would also preclude indemnity, courts are permitted to decide the duty to indemnify in advance of the underlying liability lawsuit’s end.
See Northfield Ins. Co. v. Loving Home Care, Inc.,
IV. Conclusion
Accordingly, the district court’s judgment is AFFIRMED.
Notes
. Because this case was brought as a declaratory judgment to determine a duty to defend and indemnify, we take the allegations of the underlying complaint as true. We express no opinion on the ultimate outcome of the underlying liability case.
. Under the reasoning of Castlemane, the carbon monoxide in this case constituted an "irritant” because it was released at higher-than-normal levels in a place (a confined apartment) where such release was not meant to occur. See Castlemane, 220 F.Supp.2d at 814.
. Under Mississippi law, like Texas law, courts interpret insurance policies according to contract law. Nethery, 19 F.3d at 475. The terms of an unambiguous insurance policy must, therefore, be given their plain meaning. Id. "Only if thе policy is ambiguous will it be interpreted in the light most favorable to the insured.” Id.
. As discussed above, Texas law does not look to the "reasonable expectations” of the insured. However, even if it did, given the amendatory endorsement’s elimination of the exception, it would seem that the "reasonable” expectation of the insured should be that this event would not be covered.
. While the result here is sad, it is not absurd to call carbon monoxide a pollutant. Although carbon monoxide at low levels may not be deadly or immediately injurious, it is not a benign substance. People commit suicide by carbon monoxide poisoning, and it is without doubt that much of the efforts to improve air quality in major cities centers upon the deleterious effects of pollution caused by carbon monoxide in the air.