Peace Ex Rel. Lerner v. Northwestern National Insurance

By Litem, Ad Peace, Minor, His Kevin Guardian Plaintiff-Joint-Appellant, Lerner, Robert J.

v. Company, National Insurance Northwestern Defendant-Respondent-Petitioner Djukic Enterprises, Inc., Defendant-Joint-Appellant, Darrell Company,

State Farm General Insurance Harding, Depart Edmund Durand and J. Wisconsin Services,

ment of Health and Social Defendants. Supreme Court 9, 1998. argument September Oral No. 96-0328. Decided July 429.) (Alsoreported in 596 N.W.2d defendant-respondent-petitioner For the there by Pendergast, Jr., Crivello, were briefs John R. and Carlson, Steeves, S.C., & and Mentkowski Milwaukee argument by Pendergast, oral John R. Jr. plaintiff-joint appellant

For the there was a brief Perry, by Lerner, Robert J. B. Michele Sumara and Lerner, Saks,, S.C., Quindel & Milwaukee and oral by argument B. Michele Sumara. defendant-joint appellant

For the there was brief by Kuelthau, C., Mil- James E. Culhane and Davis & S. argument by waukee and oral James E. Culhane. by Tyndall Amicus curiae was filed Susan R. and Culbertson, Hinshaw & for the Wisconsin Milwaukee Insurance Alliance and Civil Trial Counsel of Wisconsin. by Burrell, curiae filed C. R.

Amicus was Robert Borgelt, Jeffrey Wagner Powell, & and Peterson Foggan, Frauen, S.C., Milwaukee, counsel, Laura A. Radzely Wiley, Troy, Daniel E. Howard M. Rein & Fielding, Washington, D.C., for the Insurance Environ- Litigation mental Association.

Amicus curiae was filed Peter G. Earle and Boyton Earle, Milwaukee, & Irene C. Warshauer and Anderson, Olick, York, counsel, P.C., NY, Kill & New Amy Policyholders, Fran- Bach, counsel for Untied San Policyholders. cisco, CA, for the United Krueger, by Raymond Amicus curiae was filed R. Meany Michael, Friedrich, LLP, & David V. and Best Lindenberg, Milwaukee, counsel, of Howard S. senior Mortgage Corporation, counsel for Federal Home Loan Mortgage Corpo- VA, Loan McLean, for Federal Home Lending Coalition. ration and Fair ¶1. PROSSER, T. J. Northwestern DAVID (Northwestern) Company seeks National Insurance appeals' reversed a decision which review of a court of summary judgment grant to Northwest- circuit court policy insurance it asserts that the ern.1 Northwestern (Djukic) coverage Djukic Enterprises excludes sold to arising ingestion injury personal claims chipped paint present in an or or dust lead in flaked plaintiff, Djukic apartment Kevin rented to the minor that Peace, his mother. The circuit court concluded present paint pollutant under the terms of is a clause, and that Northwestern's exclusion chipped, paint flaked, has or deterio- when lead-based discharge, dispersal, action is a dust, rated into policy's escape under the exclusion. release, or ultimately concluding appeals reversed, court of paint paint chips, flakes and dust is lead derived from pollutant contaminant under the exclusion. not a or at Based the terms of the insurance on expectations an insured the reasonable issue and present property that lead 1988, owner in we conclude pollutant. paint a We also conclude in a residence is chips, flakes, either or that when lead-based fumes, is a dis- deteriorates into dust or charge, that action dispersal, escape release, within the meaning policy. in the insurance We therefore of terms appeals and hold that the reverse the court of property clause in this case owner's bars against against claim its insurer for defense suit for Ins. Peace v. Northwestern National 215 Wis. 2d (Ct. 1997). App. 573 N.W.2d 197

bodily arising injuries from lead-based chips, property. flakes, or deteriorates to on dust his

FACTS complaint following: ¶ 3. The reveals period August 1989, Between the Djukic, and March point Harding and at some Darrell apartment building Durand, Edmund J. an owned on Peace, North 15th Street in minor, Milwaukee. Kevin a apartment building with lived his mother in an in that during period. the relevant time City 3, 1988, 4. On November a of Milwaukee Department inspector Health visited the North 15th premises. inspection, identifying Street That while not apartment particular premises, at the revealed the presence peeling, flaking, chipped paint loose, which contained a hazardous concentration of In lead. a November 7 notice of ordinance violation addressed city Djukic, Djukic to sanitarian advised that such poisoning.2 conditions tend to cause lead The sanitar- Djukic ian ordered to take immediate corrective action protect public permanently health and correct days. the hazardous conditions within 30 Approximately ¶ 5. six weeks after the notice of Djukic issued, ordinance violation was obtained com- general liability coverage mercial for the 15th Street through property Northwestern. The was in poisoning damage, developmental Lead can cause brain disorders, disease; kidney body by and liver it contaminates injecting impurities Organization, into blood stream. Lefrak (S.D.N.Y. 949, Supp. Inc. v. Chubb Custom Ins. 942 F. 1996). six, age systems "Children under the nervous whose developing, damage particularly are still are vulnerable to poisoning." Management caused Juarez v. Wavecrest (N.Y. 1996). Ltd., 135, 139 Team 672 N.E.2d

Ill through March 15, 1988, effect from December 1989.3 coverage policy provided for "those sums obligated pay legally as the insured becomes damage' of'bodily injury' 'property

damages or because applies." this insurance to which coverage. policy excluded certain The also 'bodily injury' clause excluded" The alleged arising damage' 'property actual, out or escape dispersal, discharge, of release or or threatened (a) you premises pollutants: own, rent or At or "any "pollutants" policy occupy. as defined . . gaseous liquid, irritant or contami- or thermal solid, including vapor, acids, smoke, soot, fumes, nant, and waste."4 alkalis, chemicals 6,1989, mailed a cancellation February Northwestern On 10, 1989, for Djukic, effective March notice of underwriting reasons. pertinent exclusion reads: The full text of the

2. Exclusions. apply not to: This insurance does (1) damage" arising "Bodily injury" "property out of the or f. discharge, dispersal, actual, alleged release or threatened or escape pollutants: (a) own, occupy; premises you rent or At or from (b) by you any for location used or for or others At or from site or waste; storage, disposal, processing handling, or treatment of (c) handled, stored, treated, transported, any are at time Which any person of, you disposed processed or or or or as waste legally responsible; you may or organization for whom be (d) you any any or contractors site or location on which At or from your working directly indirectly are on behalf or or subcontractors performing operations: (i) pollutants brought loca- on or to the site or if the are operations; or

tion in connection with such

PROCEDURAL HISTORY May guardian 10, 1995, 8. On ad litem for complaint asserting Djukic, Harding, Peace filed a negligently comply City and Durand failed to with a prohibiting any Milwaukee ordinance lead-based nui- existing property,5 negligently sance from on the failed (ii) operations monitor, for, if up, are to test clean remove, contain, treat, detoxify or neutralize pollutants. (2) loss, cost, Any expense arising any governmental out of request for, you monitor, remove, up, direction or test clean contain, treat, detoxify pollutants. or neutralize solid, any liquid, gaseous Pollutants means or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, recycled, chemicals and waste. Waste . includes materials to be reconditioned or reclaimed. City The 1988 provided Milwaukee Ordinances part: Chapter 66 TOXICAND HAZARDOUSSUBSTANCES chapter: 66-20. Definitions. In this 6. ELEVATED BLOOD LEVEL is defined as a confirmed micrograms per concentration of lead in whole blood of 26 deciliter greater, by or or the current level set the U.S. Public Health Ser- vice, whichever is more restrictive. any 7. LEAD BASED OBJECT means surface or substance coating. covered with a lead-based any 8. LEAD BASED SUBSTANCE means substance gas, liquid, any whether solid or combination of the above by contains lead in excess of a level established the commissioner. any painted 9. LEAD BASED SURFACE means or coated surface, having greater equal a lead content than or to one milli- gram per square dry of lead centimeter in the surface as measured by x-ray analyzer approved recognized an fluorescence or other laboratory field or method. 10. LEAD TOXICITY means an elevated blood lead level erythrocyte protoporphyrin with an level in whole blood of 35 micrograms per greater, by deciliter or or the current level set Service, U.S. Public Health whichever is more restrictive. Poisoning Regulations. 66-22. Lead Prevention and Control negli- apartment, inspect and maintain properly gently all lead-based remove plaintiff failed to property. also asserted The from Djukic, property Harding, in rented the and Durand 134.04(2)(b)4,6 Ag§ Code of Wis. Admin. violation property, deteriorated and virtue of its because painted poorly had been surfaces which maintained paint, posed risk of an unreasonable lead-based with injury. personal substance, object Any surface or lead based 1. NUISANCE. body lead due to its may burden of contribute to an increased

which nature, easily condition, to chil- accessible or or which location in dren, public nuisance as defined health hazard and is declared a s. 80-1-2. may create or allow to a. No owner 2. PROHIBITED ACTS. substance, any surface or property lead based on their exist or children, may accessible to object or become is accessible to which children. (1988) stated, part: Ag Code 134.04 Wisconsin Admin. § requirements. Ag 134.04 Disclosure (2) CONDITIONS AFFECTING VIOLATIONS AND CODE agreement entering or into a rental Before HABITABILITY. deposit prospec- any money security accepting earnest prospective tenant, tenant: to the the landlord shall disclose tive (b) affecting habitability, following the existence conditions of reasonable or could know on basis of which the landlord knows inspection, received from code or not notice has been whether authorities: enforcement prem- dwelling Any unit or conditions in the 4. structural or other safety the health or of a hazard to which constitute substantial ises injury tenant, personal aas create an unreasonable risk of the or premises any reasonably other than foreseeable use of result of premises by negligent the tenant. or of the use abuse complaint alleged addition, In Djukic, Harding, and Durand violated Wis. Stat. 100.20(5) (1987-88)7 by failing § to disclose to Kevin or Peace his mother the existence of such hazardous Lastly, complaint Djukic, conditions. asserted that Harding, implied warranty and Durand breached an of habitability. complaint alleged The that defendants' personal injury actions caused Kevin Peace and sub- expense. Specifically, stantial medical Peace's complaint alleged poisoning by that he "sustained lead ingesting paint chips, paint lead derived from flakes and dust that was contaminated with lead derived paint" apartment from lead at based he shared with his mother. complaint, Djukic After Peace filed his ten-

dered defense of the lawsuit to Northwestern. coverage it Northwestern asserted that had no for the duty Djukic. loss, had and thus no to defend North- sought summary judgment western confirm that it duty had no to defend.8 Northwestern based its denial (1987-88) 100.20(5) provided: Wisconsin Stat. § competition practices Methods 100.20 and trade (5) Any person pecuniary suffering by of a loss because violation any person any may other order issued under this section sue for damages any jurisdiction competent therefor in court of and shall loss, pecuniary together recover twice the amount of such with costs, including attorney's reasonable fee. 13, 1995, parties stay stipulated On October to a discovery underlying on tort claim until resolution of the summary judgment motion filed Northwestern. Northwest sought summary judgment grounds: ern on two its exclusion, expected its or intended exclusion. The latter coverage bodily injury property exclusion excludes from or dam age expected standpoint from the intended of the insured. scope exclusion, expected or intended as one of North- summary judgment coverage on the and motion policy. pollution in its clause exclusion terms of liability Djukic insurer, State ¶ and its other for sum- Co., filed a cross motion Ins. General Farm mary judgment. Relying from other on cases paint argued Djukic not a jurisdictions, lead that additive pollutant an unwanted was not because lead Djukic pointed paint. lead was out that Instead, in the intentionally argued Djukic paint. that also added policy's pollutant. To fit of a no "release" there was escape, discharge, dispersal, release, or definition pollutant Djukic to an unin- had to move asserted, the did not occur such movement location but tended case. this argued exclusion that 12. Peace only apply to environmental are intended

clauses ingesting argued pollution. lead the act of He also that requirement paint that the fit the exclusion's does not escape," disperse, "discharge, pollutant nor release or "pollutant" con- the definition of fit does policy. in the tained hearing 1995, on November At a County, Barron, Michael J.

circuit court for Milwaukee concluding Judge, decision an oral rendered Djukic duty on to defend based had no Northwestern policy's pollution The circuit court clause. exclusion Baking Co., v. Ace States Fire Ins. Co. relied on United (Ct. 1991), App. and pol- 499, 476 N.W.2d 280 2dWis. a is considered a substance discussion of when its clause. The circuit lutant under the very recognized toxic effect on that lead has court circuit court concluded addition, In children. Djukic's property to the not confined was the lead on before summary judgment, is not bases for western's asserted us on this review.

area of intended use on walls, but instead had dispersed. per

¶ 14. In a decision,9 curiam the court of appeals entry summary affirmed the circuit court's judgment, part Sukup, based in on Vance v. 207 Wis. 2d (Ct. App. 1996), 578, 558 N.W.2d 683 vacated, 211 Wis. (1997). appeals 529, 2d 568 N.W.2d 297 The court of pol concluded that lead was a contaminant under the "escaped lution exclusion clause once the lead from the painted by leaving paint surfaces either or because chipped itself off." Peace v. Northwestern unpublished slip op. Co., Nat’l Ins. 96-0328, No. at 5 (Wis. 4, 1997) App. (quoting Ct. Feb. Vance, 207 Wis. 2d 584). per at The curiam decision also relied on Vance to reject argument pollution Peace's that exclusion apply only pollution clauses to environmental and not poisoning slip op. residential lead Peace, cases. See at 5. Djukic jointly sought and Peace review of per abeyance curiam decision. This court held in petition pending for review our review of the court appeals decision in Donaldson v. Urban Land Inter- (Ct.

ests, App. Inc., 408, 205 Wis. 2d 556 N.W.2d 100 1996). Following the release of Donaldson v. Urban Interests, Land 211 224, Wis. 2d 564 N.W.2d 728 (1997), summarily per we vacated the curiam decision appeals published in Peace well as as the court of deci- appeals Vance, sion in and remanded to the court of light reconsideration in of Donaldson. See Table, 211 Wis. 2d at 529. receiving sup-

¶ 16. 18,1997, On November after plemental appeals briefs, a divided court of reversed entry summary judgment. the circuit court's Peace v. Co., 96-0328, 9 Peace v. unpub Northwestern Nat'l Ins. No. (Wis. slip op. 4, 1997). lished App. Ct. Feb. 117 167, Co., 165, 215 2d Nat'l Ins. Wis. Northwestern (Ct. 1997). majority App. The concluded N.W.2d "intact accessi- the distinction between from chips, paint "paint painted lead from ble surfaces" and immaterial determination of and dust" was to a flakes coverage at under a clause. Id. exclusion majority reject implicitly The premise read Donaldson Baking Ace that lead becomes a

of Vance and only escapes painted it sur- after contaminant appeals Instead, at the court of faces. Id. 172-73. majority s relied on Donaldson citation to federal of certain as outside the court's characterization events (citing scope the clause. Id. at 173 Pipefitters Fund v. Fire Educ. Westchester Ins. Welfare (7th 1992)). Pipefit- F.2d Cir. paint peeling wall, had off a ters court characterized escaping during particles work, asbestos insulation drifting "everyday spray paint off mark as gone awry." slightly, surprisingly, not activities but Pipefitters, Relying ¶ 17. the illustrations in on appeals first that when a child the court concluded ingests paint present painted lead from on a surface or injury paint chips, dust, his flakes, in or her arises activity gone slightly, surprisingly, an but not from awry. Peace, Next, 2d at the Wis. court of opinion appeals the used vacated in Vance conclude paint is not a to which it that lead contaminant was deliberately reasons, at 174. For added. Id. those the appeals judgment the court of reversed circuit pollution held court and that Northwestern's preclude coverage clause does not and that Northwest- duty Djukic. had a to defend Id. at ern under granted 17,1998, 18. On March we Northwest- petition clarify approach ern's for review to our to the interpretation exclusion clause. question

¶ 19. The before us is whether cir- properly granted summary judgment cuit court by concluding policy Djukic pur- Northwestern that the provide coverage bodily injury chased did not arising claims ingestion of lead derived from lead-based paint chipped, that has flaked, or deteriorated into question, dust within a residence. To answer this we present pollu- first consider whether lead is a plain meaning tant under pollution of Northwestern's is, exclusion clause. If it we then consider paint chips, whether, when lead-based flakes, or dete- fumes, riorates into dust or that action constitutes a discharge, dispersal, escape pol- release, or under the icy. inquiries Both must be answered in the affirmative preclude coverage, for the exclusion clause to grant and for us to affirm the circuit court's of sum- mary judgment. See Donaldson, 211 Wis. 2d at 229.

STANDARDS OF REVIEW summary judgment rulings 20. We review independently, Spring Green Kersten, Farms v. (1987), using 304, 315-17, Wis. 2d 401 N.W.2d 816 methodology same as that used the circuit court. Boss, Grams v. 97 Wis. 2d 338-39, 294 N.W.2d 473 (1980). summary judgment A motion for must be granted pleadings, depositions, when the answers to interrogatories, together file, and admissions on with any, genuine affidavits, if establish that there is no moving party issue of fact, material and the is entitled 119 802.08(2) judgment § as a of law.10Wis. Stat. to matter (1995-96). parties Here, all that there no assert is regard pollution dispute fact in with to the material genuine agree claim. that there is no We presented question material and that issue of fact question purely is a of law. summary judg- moved 21. Northwestern Djukic policy on the of the insurance

ment based terms purchased. Interpretation of an is a insurance independently, question without of law we review def- and the to the of the circuit court court erence decisions appeals. Co., Fire Ins. Kaun v. Industrial & Cas. 148 (1989). 662, 667, 321 Wis. 2d 436 N.W.2d

ANALYSIS requires interpret ¶ 22. This that case we applies as it to exclusion clause lead-based present paint. must We determine whether chips, flakes, or deteriorates dust or "pollutant" discharged, dispersed, fumes is escaped meaning released, or within of terms policy. exclusion clause of the insurance Interpretation contract lan- insurance guage governed by interpretation is the same rules govern and construction that other contracts. Weimer Country 705, 721, Co., v. Mut. 216 2d Ins. Wis. 575 (1998); Smith v.Atlantic Mut. Ins. 155 N.W.2d (1990). primary 808, 810, Wis. 2d 456 N.W.2d object interpretation in contract to ascertain and interrogatories no depositions, There are answers to case, Thus, in the us. in this we admissions record before review only pleadings whether there is and affidavits determine a genuine issue of material fact.

carry parties. out the intent of the General Cas. Co. of Hills, Wisconsin v. Wis. 2d 167, 175, 209 561 N.W.2d (1997); Employers 718 Kremers-Urban Co. v.American 722, 735, Ins. 119 2dWis. 351 156, N.W.2d (1984). Policy language interpreted according is to its plain ordinary meaning as understood a reason- able insured. Kremers-Urban, 119 Wis. 2d at 735. phrases

¶ 24. Terms or in an insurance contract plain ambiguous "they fairly suscepti- are not but if are ble to more than one construction." Id. at 735. An ambiguity intrinsically has been described as "an imprecise ambiguity may or uncertain" term; an also arise "because external factors have rendered the lan- guage inadequate problem chosen to resolve the at Why hand." Fischer, James M. are Insurance Contracts Subject Special Interpretation?: Rules Text Versus 1992). (Fall, Context, 24 995, Ariz. St. L.J. If cover- age ambiguous, narrowly is an exclusion will be against construed Smith, insurer. 155 Wis. 2d at principle However, this does not allow a court to eviscerate an exclusion that is clear from the face of the policy. Whirlpool Corp. insurance Ziebert, v. 197 Wis. (1995). 2d 152, 539 N.W.2d 883 See also Donald- ("absent finding ambiguity, son, 2d Wis. at 231 a this court will not use the rules of construction to contract"). language rewrite the of an insurance I . interpretation ¶ 25. With these rules of in mind, question present we examine the whether plainly policy's "pollutants." within definition of "pollutants" pol- 26. The term is defined in the icy. any liquid, gaseous solid, "Pollutants means or including thermal irritant contaminant, or smoke, and waste. vapor, acids, alkalis, chemicals fumes, soot, recycled, reconditioned materials to be includes Waste reclaimed." pollutant policy, includes the 27. Under (2) (1) any liquid any irritant; following: irritant; solid (5) (4)- (3) any irritant; any gaseous irritant; thermal (7) (6) any liquid contaminant; any contaminant; solid (8) any any gaseous thermal contaminant; and contaminant. definition of

¶ of words within 28. A number policy. "pollutants" When deter- in the not defined are ordinary meaning words, it is mining these of non-legal appropriate in a the definitions to look to dictionary. Land 723; at Just v. Weimer, 216 Wis. 2d (1990). 737, 456 N.W.2d Reclamation, Wis. 2d one that con- ¶ is defined as A "contaminant" 29. Dictionary Heritage American taminates. of (3d 1992). Language English is ed. "Contaminate" by impure or unclean contact make or as "1. To defined at 406. mixture." Id. of irri-

¶ as the source An "irritant" is defined 30. especially physical Id. at 954. irritation. tation, pathology, "A as in the sense of defined, "Irritation" is irritability a soreness, inflammation, or condition part." bodily organ Id. at 954. examples contami- "Chemical," one of 31. policy's definition of in the irritants included

nants or "pollutants," a distinct "A substance with defined as is produced composition in a or used that is molecular dictionary process." also Id. at 327. chemical composition, "chemistry" as "The science defines espe- properties, matter, reactions of structure, and systems. cially 2. The and molecular of atomic composition, properties, structure, and reactions of a at substance." Id. 328. dictionary.

¶ 32. "Lead" is also defined in the "soft, malleable, Lead ductile, bluish-white dense chiefly galena element, metallic extracted and pipes used corrosives, in containers and solder and type shielding, paints, bullets, metal, radiation and compounds." antiknock at Id. particu-

¶ 33. "Lead" is a chemical element with may properties. process." lar It be "used in a chemical It clearly fits within the definition of "chemical." paint," composed "Lead which is of lead and liquid chemicals, other starts out as a and becomes a applied solid after it is time, dries. Over may chip becoming and flake solid "waste." When it begins may give deteriorate, it off "fumes." When it begins disintegrate, dry parti- dust-fine, it becomes spot, which, cles of matter11 like smoke and can float affecting respiration eventually the air human until it ground. settles on the poisoning paint

¶ 35. Lead at residential properties generally by is caused the inhalation oflead- particles contaminated dust lead fumes .toxic through respiration ingestion or the of lead-based chips paint by consequences mouth.12 The can be disas- trous for children: Fine, dry'particles Dust is defined as "1. 2. A of matter. fine, dry particles.

cloud of of regarded 3. Particles matter as the disintegration." Heritage Dictionary result of The American of (3rd edition), English Language p. J., 12 Lin-Fu, Vulnerability Exposure Children to Lead of Eng. (1973). 1229, 1231 Toxicity, and 289 N. J. Med. Poisoning, Statement on Childhood Lead 79 Pediatrics (March 1987): may . high levels. .lead cause At blood Survivors of and death. encephalopathy lifelong disabili- may have severe encephalopathy retardation. Lead ties, such seizures and mental as every organ system, most toxicity affects almost nervous peripheral the central and importantly, kidneys, and blood. . . .Lead interferes systems, of enzymes catalyze the formation heme. with postnatal growth. prenatal It also inhibits both and acuity. carcinogen is a impairs hearing Lead Lead animals, is evidence laboratory in and there some to lead carcinogenicity exposed in workers but in not children.

Although young of in chil- impairment cognition . threshold has been reported, dren. .has been no identified. . . .The between levels relationship IQ remarkably to consis- and deficits was found be every A found that for tent. number studies have levels, a mug/dL increase in blood lead there was lowering IQ children four seven mean (Sources omitted.) points. Primary Poisoning: Screening Lead From Preven 1993). (July tion, 176, 177 92 Pediatrics poisoning There is concern about lead also may workplace. poisoning result in in the Lead com- weight plaints insomnia, weakness, loss, lassitude, unforeseen, previously increasingly recognized danger A but paint improper that of removal of lead-based from older houses or, ironically, protect during during cleaning to chil- renovation Torches, guns, sanding particularly dren. heat and machines are they Sanding only dangerous because can create lead fume. not throughout the but cre- distributes lead as a fine dust house also particles readily paijit than that are more ates small absorbed .Proper cleaning chips produced chips... ofthe dust and delead- ing complete peeling chipping and must include removal of all thorough mopping, vacuuming preferably and with wet detergents. high-phosphate This waste must be discarded in a (Emphasis supplied.) site. secure

124 hypotension. may gastrointesti- It and also disturb the including constipation, tract, anorexia, nal and cause may abdominal discomfort or actual colic which be excruciating. frequently Anemia is with associated poisoning. patient's gums may reveal a blue or presence poor hygiene. blue-black line in the dental Proctor, Nick H. al., See et Chemical Hazards of (2d Workplace Lippincott Company ed. J.B. 1988).13 paint

¶ 37. Lead is a solid contaminant. Lead liquid either is or threatens to be a solid contami- paint chips nant. Lead are a solid contaminant. Lead paint gaseous fumes a are irritant or contaminant. paint (although a Lead dust is solid an sometimes air- borne) irritant or contaminant. There little doubt paint chips, that lead derived flakes, from lead or dust is an irritant or serious contaminant.14 early 1980s, In the passed "Right Wisconsin to Know" giving employees law right request information from an employer potentially dangerous, health-affecting about sub workplace. 364, stances used in Chapter Laws of 1981. The Occupational Safety law was similar to the older federal and regulations. Health Act legislature The Wisconsin cited 29 C.F.R. Part Z subpart in which there were numerous refer ences lead. extremely "Lead is an toxic single metal: even a atom of lead, body, once in the protein human binds to a and induces damage; greater some exposure, the more serious the function; physiological any effects. Lead has body no amount of Piomelli, pollution." lead reflects environmental S. Childhood (March 1994). Poisoning '90s, Lead in the 93 Pediatrics 508 widespread "Lead is environmental one the most toxins fac ing Shannon, American children." M. Lead Intoxication in 1992). Infancy, (January 89 Pediatrics 87 "Lead is a carcinogen highly dangerous known environmental toxin." alleges complaint plaintiffs 38. plaintiff August 1989, the and March "between by ingesting poisoning derived lead sustained paint paint chips, that was con- flakes and dust paint at lead based lead derived from taminated with premises Street, Mil- 15th at 1102 North located added.) (Emphasis Peace's waukee, Wisconsin." by suggests paint complaint contaminated that the was Conceptually, the lead not as contam- we view the lead. inating potential giving paint paint but as body when it air, water, the human and to contaminate disperses. contami- is an inchoate Lead-based (unless directly it is it down nant before breaks water); say, discharged, irritant it both an into becomes chips, down into after it breaks and a contaminant flakes, dust, or fumes.

I. I inju- Peace s issue is whether 39. The second "discharge, dispersal, or release out of the ries arose escape pollutants.. .." "discharge," "dispersal,"

¶ 40. The words policy, "escape" but defined in the "release," and are not range they appear actions the entire to describe something condition to from a contained moves which "Release" is transitive condition. an uncontained "escape" "Discharge," "disperse," are verbs and verb. This or intransitive. can either transitive that implies be condition from a contained that the movement intentional can be either condition to an uncontained involuntary. purposeful In its and accidental or "discharge" "To is defined: form, the verb transitive Envtl. Abatement: Who Should Pay? 2 Lead Paint WlS. Coyne, (Winter 1995). 113, 114 L.J.

release, as from confinement. . . ."In its intransitive "discharge" part, form, defined, verb as "To pour forth, emit, or release contents." The American (3rd Heritage Dictionary English Language edi- tion), p. "Escape" part, defined, is. as "1. To break loose from confinement. . . .2. To issue from con- seep finement an enclosure; leak or out. ..." Id. at Employers ¶ In 41. Cas. v.Co. St. Paul Fire & (Cal. Rptr. App. Co., 17, Appeals Marine Ins. 52 Cal. 2d 1996), Dist. the California Court of stated: policy given Words an insurance are to be their ordinary popular meanings. Therefore, and we look the ordinary meanings to of discharge, dispersal, escape. Discharge release, release and is a emission (Webster's (9th or issuance. Collegiate New Diet. 1984) 360). ed. p. Dispersal scattering, is a spread- (Id. 365). ing or at p. distribution. Release is a (Id. liberation, freeing, permitting or at escape. p. 994). (Id. 424). Escape leaking p. or overflow. at These taken together compre- terms constitute a hensive description processes by of the which pollutants may injury persons cause or property. plain language ¶ 42. We believe the paint containing covers the release of lead from a wall ceiling into the air or onto the floor.15 "Common 15 major problem A environmental can be created unin formed or paint painted careless efforts to remove lead Shannon, Infancy, surfaces. See Lead Intoxication in 89 Pediat 1992) ("Home (January renovation, being rics 87 when not done purpose deleading, significant for the has been identified as a predictor guns of elevated lead levels in children. Use heat sanding particularly and create toxic lead fumes or lead dust efficiently ingestion which are absorbed after and/or inhalation."). paint a wall or that never leaves

sense tells us that Implicit Negligence ceiling in the not cause harm. does allegation Complaint. that the lead . .must be an ceiling, separated and from the wall or somehow fixtures floor, on the furniture or air, entered the or fell Organization, apartment." Inc. v. Chubb in the Lefrak 1996). (S.D.N.Y. Supp. 949, 954 Co., Ins. 942 F. Custom theory adopted appeals this The court of Baking Fire Co. v. Ace cases, United States Ins. three (Ct. 1991); App. 499, 476 N.W.2d 280 Co., 164 Wis. 2d (Ct. Sukup, 578, 207 Wis. 2d 558 N.W.2d Vance v. 1996), App. 529, vacated, 211 2d 568 N.W.2d 297 Wis. (1997); v. Northwestern Nat'l Ins. No. and Peace (Wis. slip op. App. unpublished 4, Ct. Feb. 96-0328, 1997), vacated, 211 Wis. 2d 568 N.W.2d 297 (1997). Baking, an ice cream cone manufac- In Ace in the same warehouse

turer stored ice cream cones containing fragrance a fabric softener that stored the ice linalool. The linalool contaminated additive causing soap. smell and taste like cones, cream them to pollutant the linalool was a The issue was whether discharged, dispersed released, it had or whether been property damage. The court found linalool to cause foreign pollutant a because it was a substance was The court then had contaminated cones. which said: always pollu-

[I]t is a a rare substanceindeedthat materials have their tant; the most noxious of non-polluting appropriate Thus, and uses. example, "pollute"water and thus foul an oil will radiator, but be essential for automobile's engine's Conversely, "pol- water can lubrication. engine, essential and thus foul the but be lute" oil for the automobile's although Here, linal- radiator. ingredient uses, ool is a valued for some it fouled Ace Baking's products. Accordingly it a "pollu- was in tant" relation to those products.

Ace 164 Wis. 2d at Baking, in (emphasis original). In Vance, the court built on its in analysis

¶ here, Ace Baking. As Vance involved a minor allegedly injured by lead-based in his rented premises. court said: agree

We with the trial court's conclusion. . .that lead is not a "contaminant" in paint to which it was added deliberately by manufacturer, any more fragrance than the in Baking linalool Ace was a contaminant in the fabric softener. . . .As we noted Baking, Ace a substance's status either as a val- ingredient ued or a contaminant depends on where it . escaped is:. .Once the lead from the painted surfaces, however, by either leaving paint or off, because the paint chipped itself the lead became a "contaminant"-a belong substance that did not environment, just its new as Ace Baking's linalool became contaminant once it left the fabric softener.

Vance, 207 Wis. 2d at 583-84. 46. The court ruled that lead paint ingested

from "intact accessible surfaces" had dis- painted not charged, dispersed, seeped, migrated, released, escaped thus was not covered the pollution exclusion clause. Id. at 585. lead that By implication, had left "intact surfaces" painted through accessible flakes, and dust had dis- paint chips, discharged, released, or persed, escaped. 47. The was confirmed in the first implication

Peace where the court of said: opinion, appeals decision, Vance v. that our recent

We conclude Vance, case. In we dispositive . .is of this Sukup. duty an insurer had a to defend analyzed whether coverage arising from a on there was based whether intact accessi- lead derived from "ingesting child's surfaces, chips, paint flakes and paint ble painted lead derived from contaminated with dust was concluded premises...." at the We paint lead based that, Baking, the fabric softener Ace analogous to pollution a contaminant under the paint lead was escaped the lead from the "[o]nce exclusion clause by leaving paint or painted surfaces. . .either on chipped itself off...." We went paint because the conclude, however, that the insurer nevertheless to com- duty plaintiffs had a to defend because the alleged injury resulting plaint had also contrast, painted By surfaces. "intact" accessible allege any injury result- complaint the Peace fails paint than that "derived from ing from lead other flakes and dust." chips, paint op. slip Peace, at 5. analysis considering After in these exclusion clause

cases, we conclude that bodily injury inges- Djukic's policy excludes from the paint chips, flakes, of lead in or breaks down tion "pollutant" lead—once into dust or fumes. When the begins disperse, discharge, escape contained — painted surface, it falls from the containment of plain language within

clause.16 cases, many struggled In the courts have with exactly "pollutant" metaphysical question what the is. We always "pollutant" that "lead" is a solid contaminant or conclude way pistol dangerous weapon, in the same that a loaded case, deadly up gun in a and a is a even when it is locked mamba snake, reptile poisonous even when it is confined in a house. following ¶ courts have reached the same Inc. v. American conclusion: Shalimar Contractors (M.D. Supp. Co., 975 F. 1450 Ala. States Insurance 1997); Casualty Leger Co., St. Supp. v. American Fire & Ins. (E.D. 1994), opinion, 870 F. 641 Pa. aff 'dwithout (3rd 1995); Kaytes Imperial 61 F.3d 896 Cir. v. Casu alty Indemnity Co., 93-1573, & No. A 1994 WL Civ. (E.D. 6, 1994); 780901 Pa. Jan. Auto-Owners Ins. Co. v. (Minn. 1999); App. Hanson, 588 N.W.2d 777 Oates (N.Y. 1993), State, N.Y.S.2d 550 Ct. Cl. Oates v. appeal 597 settlement, Liability after 615 2d 993 withdrawn N.Y.S. 1994); (1st Dep't Bourbeau, v. U.S. Ins. Co. cf. 1995). (1st 49 F.3d 786 Cir. contrary ¶ A conclusion was reached Realty Sphere Supp. Co., Drake Ins. Co. v. P.L.C. 990 F. (S.D.N.Y. 1997); Organization, Inc. 240 v. Lefrak (S.D.N.Y. Supp. Co., 942 F. 949 Chubb Custom Ins. 1996); Stringfield, Company Insurance Illinois v. 685 (Ill. 1997); App. N.E.2d 980 Sullins v. Allstate Ins. (Md. 1995); 667 A.2d 617 Atlantic Mutual Ins. Co. v. (Mass. 1992); McFadden, 595 762 Weaver v. N.E.2d (N.H. 1996); Royal America, Ins. Co. 674 A.2d 975 (N.J. Byrd Super. Ct. Blumenreich, v. 722 A.2d 598 1999); App. Div. General Accident Ins. Co. v. Idbar (N.Y. 1994); Realty Corp., Sup. 622 N.Y.S. 2d 417 Ct. Realty Corp., Brands v. Caribe Generali-U.S. (N.Y. 1994); Sup. Cepeda Varveris, v. N.Y.S. 2d 296 Ct. (N.Y. 1996); App.

651 N.Y.S. 2d 185 Div. G.A.Ins. Co. v. (N.Y. Naimberg Realty App. Assoc., 2d 246 650 N.Y.S. 1996). Div.

I I I. against position argument we 51. The first ambiguous it can have taken is that the —that pro- given interpretations, different one be two coverage above, a not. As noted and one that does vides generally finding ambiguity is fatal the insurer ambiguity interpreted will be in favor because insured, as insurer wrote the words inasmuch policy. interpret published 52. The first case respect pollution exclusion clause with to lead McFadden, Ins. v. N.E.2d was Atlantic Mutual Co. (Mass. 1992). The court declared that the ambiguous: exclusion clause was reasonably that an could have We conclude insured to cover- provision understood the at issue exclude by for forms of industrial age injury caused certain injury allegedly not for pollution, coverage but in a by presence pri- caused the of leaded materials no in simply language vate residence. . . .There is to the provision the exclusion from which infer that provision limiting drafted with a view toward was liability paint-related injury. lead The definition for "pollutant" in the does not indicate that policy scope. leaded materials fall within its by language approval at 764. Maryland cited with Id. This was Sullins, 620, in 667 A.2d and the court at repeated conclusion has been several times. Leger

¶ However, in & St. v. American Fire (E.D. 1994), Casualty Supp. Co., F. one Ins. Pa. following McFadden, the first court dis of agreed. cases policy language not in "Courts must torture the ambiguities Quot none order to 'create where exist.'" Casualty ing Kay Imperial & from tes v. Indem. No. (E.D.Pa. 1994), Leger 6, 93-1573 Jan. St. court " '[l]ead a chemical irritates contami said: is widely Leger, nates.'. . .This is understood." St. 870 F. Supp. at 643. By contrast, Sullins, while court acknowledged interpretation that the of the

A.2d reasonable,17 it clause the insurer was asserted susceptible inter- the terms were to other pretations. clearly 'toxic,' It said: "While lead is reasonably prudent layperson may not view lead as a reasonably prudent layperson may 'chemical.'.. .A also interpret 'pollutant' the terms 'contaminant' and as not including paint." (empha- Sullins, 667 A.2d at 620 original). insis in U.S. Liab. Ins. 55. This view was rebutted (1st 1995), Bourbeau,

Co. v. 49 F.3d 786 Cir. where the court said: view, language

In our Pollution Absolute unambiguous Exclusion clause is clear and on its It intended to an plainly face. be absolute bar coverage "any pollution." form of The most nota- applies its aspect ble of the exclusion is breadth —it pollutants, opposed only to all releases of as those accidental.". . .After which are not "sudden and reading pollutant, this definition of we do not see expect insured would objectively how an reasonable property to be covered for contamination of caused In by discharge paint chips. the removal and of lead view, objectively person reading our an reasonable Exclusion clause would con- the Absolute Pollution and a paint sider lead both a "solid. . .contaminant" objectively person "toxic An reasonable chemical." paint chips also lead "materials to would consider 17 interpretation also noted The reasonableness of the was America, Royal v. Ins. Co. 674 A.2d the court Weaver of (N.H. 1996). 975, Organization, Inc. v. 977 The court Lefrak (S.D.N.Y. 949, 1996), Supp. F. Chubb Custom Ins. paint include lead as a also admitted the could be read to "pollutant." specifi- reading A of or "waste." disposed of"

be only this would buttress cally pollutants listed list of irritants The non-exclusive interpretation. potpourri the insured a provides and contaminants consider, to toxic chemi- from smoke pollutants objectively an reasonable to see how cals. We fail "smoke, vapor, that believe possibly insured could pollutants considered soot, fumes" would be [and] not. while lead would original). (emphasis in at 788-89 Bourbeau, 49 F.3d ambigu- inevitably Language some creates Harnischfeger Corp. ity. Co., 927 Harbor Ins. v. See (7th 1991), the court said: Cir. where F.2d interactions anticipate possible all Drafters cannot attempt cope text, they and if could of fact and a contract leave behind them in advance would with manual than like a procurement federal more like a policy. insurance traditional general imprecision lan- and the nuances Whether ambiguity guage equal is a a matter of law as perspec- by perception influenced determination objective do its best to ascertain tive. A court must language parties expectations in the policy. involving In two recent decisions reading approach plain adopted

paint, as have courts reading approach opposed in their focus to a technical In Shalimar Contrac- clause. exclusion on Supp. Co., 975 F. tors, American States Ins. Inc. v. (M.D. 1997), the court said: Ala. 1450, 1456-57 any particular does not assert The Plaintiff [pollution] present in the language offers no contention The Plaintiff ambiguous. could be rea- in this exclusion any phrases word sonably by interpreted people of ordinary intelligence to contradictory have two meanings.... 58. After reviewing such cases Lefrak, Sul as lins, McFadden, and the court declared:

The court finds. . .that such a laborious reading of (sic) the terms "discharge, disperal, release and escape" "pollution" permitted is not under Ala- bama According law. to the Supreme Alabama Court, the terms of an insurance exclusion "should given be the meaning that a person ordinary intelligence reasonably would think language directive, had." Under that the court finds that the terms in an insurance exclusion cannot be defined by highly resort to the specific technical and defini- laws, tions under the environmental such as those contained in the Code of Federal Regulations. .. agrees .The court with American that it cannot be seriously contended that pollutant lead is not a within meaning of the pollution exclusion. States,

American 975 F. at 1457. Supp. In Auto-Owners Ins. Hanson, Co. v. (Minn. N.W.2d 1999), Ct. App. the court followed Board Regents v. Royal Ins. 517 N.W.2d 888 (Minn. 1994), where non-technical, the court "a applied plain-meaning approach interpreting a pollution exclusion, and found that asbestos fibers qualified as an 'irritant' where the policy precluded from coverage damages caused 'discharge, dispersal, release or . escape of. .irritants.'. . .The court stated that it would be 'a disservice to the English if we language were to say fibers, asbestos which are a health hazard because of their irritant effects on the human body, Id. at 779. The court indicated were not an irritant.'" it would follow an ordinary meaning approach in analyzing the clause with respect paint. "We [like Sphere Co.] must read these cases Drake Ins. Royal, rejected shadows where the court approach." terms-of-art Auto-Owners, 588 N.W.2d at Looking pollution ¶ 60. at the text of the exclu- sion clause in relation to the facts of case, this we ambiguous. key- conclude that the clause is not The "pollutants"—is specifically term in the clause — policy; defined in the the definition cannot be undone by "pollution" policy, different notions of outside the policy language, unrelated to the unless such a "read- ing" produced absurd results. In the here, text fairly susceptible words are not to more than one con- pollution struction. The exclusion clause does not ambiguous merely parties disagree become because the meaning, Sprangers Greatway about its v. Ins. (1994), they 521, 537, Wis. 2d 514 N.W.2d 1 or because point conflicting interpretations can of the clause differing different courts. If the existence of court inter- pretations inevitably ambiguity, only meant then interpretation by first a court would count.

¶ 61. Our decision Donaldson v. Urban Land Interests, (1997), Inc., 211 Wis. 2d 564 N.W.2d 728 is not inconsistent with this conclusion. Donaldson was building" a "sick Company attempted case in which Hanover Insurance liability

to exclude for the conse- quences inadequate exchange system of an air in a building. building defect caused an excessive accumulation of carbon dioxide in the work area. Hano- attempted categorize ver exhaled carbon dioxide as a pollutant, justifying pollution its invocation of the disagreed. approved exclusion clause. This court We analysis Judge Daniel Anderson of the court of appeals, saying dissented, who that "a reasonable expect [the clause] insured would not to include the liability avoidance of for the accumulation of carbon provisions dioxide in an office because were not made introducing air fresh into the office." Id. at 229. (citation omitted)

¶ 62. This court found the apply particular clause did not to the facts of that case. We stated: "The exclusion clause at issue here application. was intended. . .to have broad However, brings we are not satisfied that this fact exhaled carbon unambiguously dioxide within the definition of 'pollutant.' agree Judge Instead, we with Anderson's pollution dissent that exclusion clause does not plainly clearly and alert a reasonable insured that cov- erage personal injury is denied for claims that have genesis their respiration." in activities as fundamental as human

Id. at 231-32. The court contrasted exhaled carbon dioxide with the nonexhaustive list of pollutants in the exclusion clause and universally observed that exhaled carbon dioxide is present generally and in harmless all but the most unusual circumstances. Id. at 234. The same cannot be paint chips, They said for lead flakes, and dust. are widely, universally, dangerous if not understood to be capable producing poisoning.18 and of The toxic problem "The poisoning by of childhood lead caused ingestion paints of epidemic proportions lead-based has reached in large most of our accessibility cities. . . .The flaking or peeling paint plaster, along lead-based and to broken with the knowledge among parents lack of ingestion of such sub dangerous lethal, stances is responsible and even for lead poisoning... poisoning .Lead is a kind pollution, a man-made disease. ... It is a needless cause of mental retardation and young death in children." LEAD-BASED PAINT POISONING ACT, Rep. 1432, PREVENTION Cong., S. No. 91st 2nd Sess. recognized for centuries.19 effects of lead have been property their of rental understand Reasonable owners paint. obligation problem lead to deal with the IV. argument against related our 63. A second and although that, the words the exclusion conclusion is anticipate any may plain, lit- an insured would not be injury; application those words to a lead eral expect coverage. rather, a reasonable insured would argued, argument parts. First, it is This has several paint-related expressly apply not to lead exclusion does injuries. widely-used products Second, no consumer products are enumerated the exclusion. household "discharge," "dispersal," "release," Third, the words "escape" Thus, a are environmental terms of art. understood the exclu- reasonable insured could have coverage injury preclude caused sion to injury arising not for industrial but Finally, it is unreason- leaded materials in a residence. apply pollution exclusion clause to routine able to paint peeling incidents such as off a wall. Planning U.S.C.C.A.N. 6131. See also Council of Librari- Poisoning in Urban Children: An Annotated

ans: Lead publication lists 241 articles Bibliography, October 1976. This November, June, concerning dating 1943 to 1975 posed by expo- poisoning. "The health hazard to children serious Juarez, paint byis now well established." 672 sure to lead-based at 139. N.E.2d 19 B.C., ceñtury physician Dioscorides In the second Greek give way." Poisoning: said that "lead makes the mind Lead Prevention, (July, Screening Primary 92 Pediatrics 176 From to 1993). century second B.C. poisoning "Lead was described Am by physician-poet 46 Jur Proof of Greek Nicander." (1986). 150, 154 Facts 2d

138 A. again, "pollutants" is defined ¶ the term Once 64. gaseous "any liquid, thermal irritant or solid, as vapor, including fumes, smoke, soot, contaminant, includes and waste. Waste alkalis, chemicals acids, recycled, reclaimed." reconditioned or materials to be specific makes no that the definition it is true While prod- any or household consumer to lead or reference in the exclusion the definition also true that ucts, it is heavy any or other notorious metals does not mention by language.20 covering pollutants, instead broad them B. country, injured parties Throughout history parties to the have resorted and insured pollution that it in an effort to show exclusion clause apply and that industrial intended to was "discharge," "dispersal," "release," and terms "escape" art. terms of are environmental Realty Sphere Co. v. Y.L. In Drake Ins. (S.D.N.Y. 1997), Supp. the court sum- 240, 243 F. follows: of the law as marized its view recently interpreted have courts Several at issue here. similar to the one exclusion clauses State, N.Y.S.2d. 553-54 v. In Oates Oates (N.Y. 1993), the court said: Ct. Cl. pollutant question paint within is] whether lead is [The argues neither lead nor that it is not because CUNY definition. paint specifically in the definition section

paint listed nor lead are however, indisputable, that lead policy pollutants... .It as ofthe that can irritate or and a contaminant is a chemical specifically general listed poison.. tenor of the .and falls within the Moreover, do: list have USF&G pollutants. what would CUNY At the definition section. every known to man in harmful chemical incorporated by point, reality reference. must be some in these cases has been overwhelming The trend exclude contaminants that such clauses do not hold . . .These courts have paint poisoning. as lead such agrees, exclusion held, and this Court and environmental only to industrial clauses refer clause language of the exclusion . . .The pollution. The clause discusses interpretation. this supports by "discharge, dispersal, release injuries caused are terms of art in envi- escape pollutants." These law, used to describe generally ronmental of hazardous disposal or containment improper Flooring, 409 S.E.2d at 699. waste. Tufco argument dealing problem ¶ in with this 67. The pollution exclusion ofthe is that it calls for construction the four corners of materials outside clause based on interpreting jurisdictions, policy. In most courts go do not outside the four corners insurance contracts they ambiguity in the and until find ofthe unless County, Stanhope policy's 90 Wis. v. Brown terms. Cf. (1979). However, once 823, 848, 280 N.W.2d 711 2d ambiguity automajti- it almost policy, finds court cally against The Catch-22 rules the insurer. ambiguity found, has been insurance cases is that once if the has the better the insurer will lose even insurer argument to construe its clause based on about how the insurance contract. evidence outside clause not conclude that the 68. Because we duty explore ambiguous, materials have no we policy. Nonetheless, in the interest of intel- outside response. integrity, argument deserves lectual history Shelly article: in a recent law review clause was set out Application the Absolute Pollution Mason, ChoosePol- Tort Claims: Will Courts Exclusion to Toxic icy Construction or Deconstruction? L.J. 33 Tort & INS. (1998). liability comprehensive general

¶ 1966, 70. In (CGL) coverage policies a broad contained insurance reading: clause behalf of the insured all company pay

The will on legally the insured shall obli- sums which become bodily injury of or gated pay damages as because caused accident. property damage Policy and the Pollution Quoted Greenlaw, The CGL History Using Drafting to Raise Exclusion Clause: the Interpretation Quagmire, 23 Colum. Out the the J.L. of (1990). 233, 235 & Soc. Probs. 1970, In standard CGL was the Exclusion, Qualified Pollution

revised to include coverage for claims: which excluded release or discharge, dispersal, the Arising out of soot, fumes, acids, alkalis, smoke, escape vapors, or chemicals, gases, or waste materials liquids toxic into or irritants, pollutants contaminants or other any atmosphere upon land, or water course the the apply body doesnot water but this exclusion or such if discharge, dispersal, escape is sud- release or den and accidental. original.) (Emphasis L.J. at 752. 33 Torts & Ins. Exclusion an Pollution In Absolute replaced Pollution Exclusion Qualified the

clause new model clause at 753. The of'the clause. Id. words nearly in the Northwestern identical to the clause are (1) dropped policy. Exclusion The Absolute Pollution apply phrase if such does not "but this exclusion the escape discharge, dispersal, sudden and release or (2) phrase upon dropped the "into or accidental;" any atmosphere body land, the or water course or (3) water;" restructured the exclusion and added four phrases including key phrase conditional "at or (4) premises you occupy;" own, rent or adjective dropped the "toxic" before word "chemi- Shelley-Mason provides cals." explanation why article an changes

these were made. We do not adopt explanations compre- their have to in order to substantially hend that the 1985 revision broadened applicable prem- exclusion and made it occupied by owned, rented, ises the insured. Removing adjective "toxic" before noun "chemi- expanding cal" had the effect of the number of regarded pollutants. chemicals as We find these undis- puted changes in the clause inconsistent with the proposition clause, revision, that the after was apply solely pollution. intended to to industrial We agree by with the court in Oates York, Oates v. New (N.Y. 1994), 550, N.Y.S.2d Ct. Cl. when it said: "In imagine unambiguous candor, all we cannot a more being than, statement of intent after told the courts atmosphere imply 'land, and water course' indus- pollution, replace language 'premises trial to such with you occupy.'" own, rent or upon by

¶ 73. The seminal case relied McFadden acknowledged changes the CGL but denied they any significance. had West American Insurance (N.C. Flooring East, v. Inc., Co. 409 S.E.2d 692 Tufco 1991), App. Ct. stated: pollution [T]he exclusion applies only discharges into the environment. Both the historical purpose underlying the pollution operative exclusion and discharge terms indicate that a into the envi- necessary ronment is applicable. clause to be The historical purpose pollution of the exclusion scope limits the of the exclusion to environmental damage. pollution When the exclusion was first 1970's, early instituted in the applied, by it its own terms, only discharges pollutants upon "into or land, atmosphere any or water body course or water. . . ."

In industry the insurance pollu- amended the tion exclusion clause in the standard commercial liability policy clarify in order to certain issues that had arisen regarding interpretation pro- though vision. . . .Even the new exclusion does omit language requiring discharge to be land, "into or upon atmosphere any water body course or . water". -.this Court. . .refuses to change the historical limitation that the pollution exclusion clause does apply not to.non-environmen- damage. tal 409 S.E.2d at 699. American, West Then the court went on to assert that the employed "imply terms in the clause that there must be discharge coverage into the environment before can properly be denied." Id. operative terms in the version of the at clause issue this case are "dis- "release,"

charge," "dispersal," "escape." While they are not defined in the policy, the terms "dis- charge" and "release" are terms art in "escape"by environmental law and include defini- by tion and "dispersal" concept. (Emphasis supplied.) support sweeping claim,

Id. To this the court cited fed- regulations interpreting Resource, eral (RCRA), Recovery Conservation and Aet Section 143 (1990); 1004(3), namely, §260.10 and 40 C.F.R. 101(22) Comprehensive § Environmental Liability Compensation, Response, Act of 1980 and (1988). 9601(22) (CERCLA), § at 699-700. Id. U.S.C. Recovery ¶ and Resource, The Conservation Comprehensive approved 1976,21 Act was Liability Response, Compensation, and Environmental approved Qualified Pol- Act of 1980 was 1980.22 terms at issue in Exclusion clause used the four lution cited the court do not 1970. The two authorities prove hypothesis are that these four common terms pollution. terms of art for industrial quick Statutes A check of the Wisconsin many terms are used in situations shows that these including completely environment, unrelated to the justice Citing a multitude of criminal criminal law. not trans- that use these common terms would statutes justice into criminal terms of art. form the terms C. final contention is that it is unreasona- 77. The apply routine exclusion clause to ble to pro- paint peeling such as off a wall. For this incidents position, Pipefitters v. cites Educ. Fund Peace Welfare (7th 976 F.2d 1043-44 Fire Ins. Westchester 1992), the court said: Cir. where limiting principle, some

Without beyond far its exclusion clause would extend and lead to some absurd results . scope, intended taken a com- problem, redress this courts have To determining scope approach mon sense when cases, .[citing . three pollution exclusion clauses. . 94-580, 21, 1976, 90 Stat. 2795. Pub.L. October 96-510, 11, 1980, 94 Stat. 2767. Pub.L. December McFadden] including bond that The links these injuries cases is All plain. resulting involve from everyday gone slightly, activities surpris- but not ingly, awry. nothing There is paint unusual about peeling wall, particles off a escaping asbestos dur- ing insulation, the installation or removal of drifting paint during off the mark a spray-painting job. A policyholder, reasonable these courts believed, would not characterize such routine inci- dents as pollution. urgency expressed

¶ 78. More was toward the problem poisoning paint of lead in an award-win- ning Mahoney, law review article Martha R. who wrote: seventy-five

Six hundred thousand chil- American dren are estimated to have blood lead levels indicating toxicity. lead Four five million more have blood lead levels with impaired associated neurological and intellectual functions. The two most important exposure among sources of children are lead-based and household dust. Mahoney,

Martha R. Four Million Children at Risk: Poisoning Law, Lead Paint Victims and 9 Stan. (1990). scope gravity Envtl. L.J. 46-47 of lead poisoning prompted Department the United States say Health and Human Services in 1991 that child poisoning important hood lead was "the most problem young environmental health for children." (1993). Pediatrics 176 though progress

¶ 79. Even substantial has been reducing contamination, made sources the Committee on Environmental Health of the Ameri- Academy report can Pediatrics issued in 1998 part, stated, common, which preventable that "lead remains a Screening environmental health threat." Levels, 101 Pediatrics Lead Elevated Blood (1998). Agency, Office of Protection The Environmental to issue Toxics, continues Prevention and Pollution publications importance warning of of the homeowners 1978. in homes built before lead abatement pages to a twentieth This court could devote 80. evolving century history awareness of lead of the workplace poisoning of and and the role in the home By problem. paint in this national lead-based problem recognition was wide- mid-1980s, Congress passed spread.23 Paint had the Lead-Based strengthened Poisoning it in 1971, Prevention Act of including again States, in 1988. 1973, revised it and Many legislative local action.24 Wisconsin, had taken including City governments, Milwaukee, had pre- developed poisoning lead ordinances and enacted screening programs.25 and vention 44, Heritage Mut. 23 AntwaunA. v. Ins. 228 Wis. 2d (1999), 456, legislation 58-60, cites additional 596 N.W.2d paint. identifying dangers with lead associated (1987-88), part of the Toxic Sub Wisconsin Stat. 151.03 § chapter, forbid the Environmental Health subchapter of stances lead-bearing paints any exposed any applying to person from dwelling, exposed surface of a the inside of a surface on children, any fixture or other for the care of or structure used dwelling any exposed of a and object placed upon in or surface 151.03 was ordinarily to children. Wisconsin Stat. § accessible 431, 27, by 1993 Act and renumbered subsequently § amended as Wis. Stat. 254.12. § 1987, Henry sug Mayor Maier August In Milwaukee city required a new gested fight against poisoning lead building lead owners to remove ordinance that would force levels in 10% Behm, paint. Don based found Unsafe tested, J., August This led to a new children Milw. stated, "Any part: lead based adopted in 1988 that ordinance substance, may to an object which contribute surface or necessary

¶ 81. We do not believe it is to detail all professional journals newspa- the articles in as well as pers, popular magazines, publications, and business government reports regulations, and all sup- and port ordinary our conclusion that the mid-1980s, an property reasonably expect owner could not purchase liability policy a standard insurance with a shift, thereby clause, to the liability personal injuries arising insurer from a person's ingestion chipped of lead in or flaked premises. phrase dust at or from the insured "at or premises you occupy" directly own, rent, or coun- ters the notion that the is confined to industrial pollution, familiarity for there is not much with indus- apartments. trial from rented Djukic City received a citation from the Inspection Milwaukee's Bureau of and Environmental Djukic purchased Health six weeks before the North- policy. ordinarily help western This citation would not explain exclusion However, clause. we part: note that the citation said in A recent inspection premises at the above address loose, disclosed the presence of peeling, flaking or chipped paint which contained hazardous concen- tration of lead. These conditions tend to cause a disease known as lead poisoning. hereby You are notified that each condition listed below is a viola- tion. . .and immediate corrective required action is protect the public hereby health. You are directed to permanently correct these hazardous conditions. . . information, your .For dealing a brochure with body condition, increased burden of lead due to its location or nature, easily children, or which is accessible to is declared a public health hazard and nuisance as defined in s. 80-1-2." 1, 1988). Milwaukee (April Ordinance 66-22 paint lead hazards elimination of permanent .. . enclosed. thirty elapse an made after reinspection

A will be (Emphasis order. . . . service of this days following supplied.) clause exclusion

¶ 83. Northwestern's part: reads coverage for: excludes

(2) any out of loss, cost, expense arising Any or you request direction or

governmental remove, contain, for, monitor, up, clean test treat, pollutants. or neutralize detoxify supplied.) (Emphasis property owner would A insured reasonable apply quoted did not that this not believe in the citation. action ordered the kind of corrective V. interpreting pollution exclusion In policy, Djukic's we conclude that insurance clause in property pol- present is a in a residential that when lead-based further conclude lutant. We paint chips, dust, flakes, deteriorates to either escape discharge, dispersal, release, or is a action policy. meaning in the As a of the terms within the poisoning coverage policy for lead result, excludes the ingestion injuries arising derived from of lead out ofthe Accordingly, paint chips, the flakes, or dust. lead-based appeals the reversed and is decision of the court the circuit court. cause is remanded to By appeals the Court.—The decision of the court of is reversed and the cause remanded.

-¶ (concurring). BRADLEY, 86. ANN WALSH J. I join majority opinion. separately only the I write respond interpretation to the of Donaldson v. Urban Inc., Land Interests. Wis. 2d 564 N.W.2d 728 (1997), rendered dissent, Justice Crooks' and to address majority opinion. that dissent's mischaracterization According majority opin- dissent, the "blatant[ly] ion is with Donaldson. inconsistent" disagree. Justice Crooks' dissent at Rather, 156.1 I am any inconsistency convinced that between Donaldson majority opinion and the is result of that dissent's reading errant ofDonaldson. majority opin- 88. The dissent asserts that the opinion

ion is inconsistent with Donaldson because the concludes is exclusion clause unam- biguous "only years ago [this when two court concluded] very ambiguous." that the clause is same (emphasis original). Justice Crooks' at 155 dissent However, not what this said in court Donaldson. We said: exclusion clause issue here at was . application. However,

intended. .to have broad we are not brings satisfied that this fact exhaled carbon unambiguously dioxide within the definition "pollutant." Donaldson, 2d at Wis. 231-32. inquiry The focus of our was on substance at policy. issue—carbon dioxide—not on the terms of unique ¶ 89. Indeed, the substance at issue drove simply, this court's Quite decision Donaldson. involuntary exhaling cannot reasona- of carbon dioxide "pollution." bly As of we be considered the "release" Donaldson, of the exclusion clause the said in gene- policy encompass that have their does not "claims respiration." as fundamental as human sis in activities 2d at Donaldson, 211 Wis. 232. assessing coverage

¶ the release of a 90. In breathing sharp pollutant, is in con- the act of human peeling from residential to the of lead trast recognized surfaces. Lead is substance has been is as harmful. It is a substance that heav- for centuries ily regulatory As modern state. restricted correctly may majority points out, lead have been while paint, intentionally release from the added its painted chips in the form of dust or is the surface pollutant. release of a Finally,

¶ 91. I address mischaracterization opinion "apparent majority on child of the as an assault poisoning." of Crooks' dissent at victims Justice Such attack rather than illuminates an obfuscates about one is for the discussion. This case not whether interpretation against is about the "child victims." It exclusionary policy clause in a of insurance. an interpreting language In this insur- policy no if it make difference those ance seeking coverage should or adults. It should make

are children many if no difference the claim involves one child or interpretation language children. The of the of an be influenced in such a insurance should not way. Accordingly, I result-oriented concur. ABRAHAMSON, S. CHIEF 93. SHIRLEY (dissenting). majority opinion As care- JUSTICE country fully documents, courts around the have proper interpretation divided over the Majority op. exclusion clause. at 130-31. When numer- disagree meaning ous language, courts about the language having cannot be characterized as a plain meaning. language ambiguous; Rather, the is it is capable being of understood in two or more different by reasonably persons senses well-informed even though interpretation might analysis one on careful seem Savings more suitable to this court. Lincoln Bank, DOR, S.A. v. 215 430, 452, Wis. 2d 573 N.W.2d (1998) (Abrahamson, concurring). 522 C.J.,

¶ person I would hold that a reasonable in the position reasonably expect of the insured would liabil ity coverage. The exclusion clause does not plainly clearly and alert a reasonable insured that cov erage personal injury arising is denied for claims paint. lead Therefore the exclusion clause narrowly against should be construed any ambiguity the insurer with coverage. in resolved favor of Donaldson v. Interests, Urban Land Inc., 211 Wis. 224, 230, 2d (1997). N.W.2d 728

¶ 95. For this I reason, dissent. (dissenting). 96. N. PATRICK CROOKS, J. The majority opinion deprive young result of the is to Kevin many Peace, and, instances, other child victims of poisoning, remedy of an effective for their harm. By stripping may negligent landlords who have been concerning coverage, lead-based of insurance majority guarantees frequently, damages that, no will reaching ever be collected for such children. In con its majority apply proper clusion, the fails to method analyzing duty whether an insurer defend, has a to disregards two-year-old this court's in Donald- decision Interests, 2d Inc., 211 Wis. v. Land

son Urban (1997), ignores and the well-established N.W.2d 728 interpreted policies principle to be that insurance are perspective insured with of the reasonable from the any ambiguities in the insured's favor. construed lengthy of its dis course 97. Somewhere majority sight of cussion, the issue in front loses summary judgment appropri was this court: whether ately granted on issue Northwestern duty its insured in this Northwestern's to defend duty analysis is no whatsoever action. There recently majority opinion. has in the This court defend employed explained the method to be often duty analyzing an insurer has a courts when whether analysis question in such an is not to defend.1 actually under the insur whether the claim covered policy. Hills, Co. 2d ance See General Cas. v. Wis. (1997). 167, n.11, also 176 & 561 N.W.2d 718 See Cos., Ins. 170 School Shorewood v. Wausau Dist. of (1992). duty 347, 364, 2d N.W.2d 82 "The to Wis. 488 duty indemnify, defend is broader than the to because duty triggered arguable, opposed as is to defend coverage." actual, Cas., 209 Wis. 2d at 176 to General n.11. determining duty whether there is a to In compare allegations

defend, in the a court must complaint policy. id.; to the insurance See relevant Shorewood, 170 Wis. 2d at An insurer has a 364-65.

1See, Tile, County e.g., Corp., Wausau Inc. v. Concrete 226 445, (1999); 235, Doyle Engelke, 2d 459 v. 219 Wis. 593 N.W.2d 277, 284-85, 580 (1998); v. 2d N.W.2d 245 General Cas. Co. Wis. Hills, n.11, (1997); 167, 2d 176 & 561 N.W.2d 718 209 Wis. Sec. Ins. 176 Wis. 2d Newhouse ex rel. Skow v. Citizens Mut. 824, (1993); 834-35, 1 Dist. Shorewood v. 501 N.W.2d School (1992). 347, Cos., 364, 2d 488 N.W.2d 82 Wausau Ins. Wis. duty allegations to defend whenever the in the com- plaint proved, "possibility would, if result in a recovery that falls under the terms and conditions of policy." the insurance Cas., General 209 Wis. 2d at 176 364). (quoting Shorewood, 170 2dWis. at See Wausau County Corp., Tile, Inc. v. Concrete 235, 226 Wis. 2d (1999). "Any 593 N.W.2d to doubt as the exis- duty tence of the to defend must be resolved in favor of the insured." Tile, Wausau 593 N.W.2d at See .459. Cas., General 176; Wis. 2d at Shorewood, 170 Wis. 2d at 364.

¶ 99. In the case, instant the circuit court granted summary judgment Northwestern, reason- ing duty that Northwestern had no to defend because allegations complaint pol- in Peace's fell within the policy. lution exclusion clause of the insurance If there any possibility proved, claims, Peace's if would liability policy, result under the terms of the principles require above this court to hold that North- duty western has a defend, thus, summary judgment improper. was task, then, Our is to examine the exclusion clause to determine any possibility whether there is that Peace's claims might be covered. interpreted pol- In Donaldson, this court aspects

lution exclusion clause identical in all relevant to the clause in this case. Donaldson, See 211 Wis. 2d at 228. We held that in order for this apply particular clause to to a facts, set of two condi- (1) alleged pollutant tions must be satisfied: the must "unambiguously pollution fit within the exclusion (2) 'pollutant'and alleged clause's definition of the pollutant "discharge[d], disperse[d], must have been polic[y]." etc., under the of the terms Id. at 229. by examining begin ¶ lead in 101. whether I pol- unambiguously the insurance falls within "pollutant." icy's that It is well established definition of ambiguous they policy if are are in an insurance terms fairly susceptible inter- to more than one reasonable pretation in Id. at 230-31. See read when context. Employers Ins., 119 v. Kremers-Urban Co. American (1984). Equally well 722, 735, 2d 351 N.W.2d 156 Wis. pol- in an the rule that terms insurance established is interpreted perspective icy the must be at Donaldson, 211 2d insured." See Wis. "reasonable 175); (citing Cas., 2d at Kremers- 209 Wis. General policy Urban, 2d at The words in the 119 Wis. given everyday meanings common, which must be the lay person. to them a Kremers- would be attributed Urban, 2d at 735. 119 Wis. glance, policy in defi- 102. At first the terms the enough might "pollutant" seem broad

nition majority paint.2 that The determines include lead in paint, unambiguously "pollutant" includes lead exclusively focusing the words "contami- almost on See "irritant" in the definition. nant" and majority op. at 125-26. approach directly majority's However, the decision in Donaldson.

contravenes this court's recent majority exclusion concludes only unambiguous, despite two clause is our conclusion 2Perhaps "contami intended words Northwestern even if paint. include lead in Even nant" or "irritant" the clause to however, case, question it answer this were would not "pollutant" unambiguously includes whether definition Interests, Inc., 2d In 211 Wis. lead. Donaldson v. Urban Land (1997), 224, 231-32, found the insurer's N.W.2d 728 we interpreted clause be intention that broadly interpretation of the clause. did not control our years ago very ambiguous. that the same clause is See majority op. 136-37; Donaldson, at 211 Wis. 2d at 233. Donaldson, In we were concerned that the "irri- words tant" and in clause, "contaminant" "when in viewed virtually virtually isolation, are boundless, for there is no substance or in chemical existence that would not damage person property." irritate or some Id. at 232 (quoting Pipefitters Educ. Fund v. Westchester Welfare (7th 1992)). Fire Ins. 976 F.2d 1037 Cir. We held "[t]he pollution reach of the exclusion clause must by be reasonableness, circumscribed lest the contrac- promise coverage tual be reduced to a dead letter." Id. at 233.

¶ scope 104. Based on our determination that the pollution of the exclusion clause is restricted to reason- applications, able we did not focus Donaldson on the pollution broad terms of the clause, exclusion such as "irritant," "contaminant," and Instead, unambigu- "chemicals." considering whether carbon dioxide was ously carefully included clause, within the we expectations evaluated of the reasonable insured. See id. at 232-34. We stressed the "common sense" approach by determining pol- taken courts in when the applicable. (quoting lution exclusion clause is Id. at 233 1043-44). Pipefitters, 976 F.2d at Because a reasonable necessarily insured would not understand carbon diox- "pollutant," ide to be a we determined that the carbon unambiguously dioxide was not included within the "pollutant" definition of in the clause. Id. at 232-34. precludes finding Donaldson, therefore, alleged pollutant by

that an is covered simply capable fitting exclusion clause because it is within the broad classifications of "contaminant" or majority's expansive reading pol- "irritant." The effectively this court's nullifies clause lution exclusion scope the clause decision in Donaldson Donald- reasonableness."3 be circumscribed "must son, 211 Wis. 2d at justify attempts majority the bla- inconsistency and this its conclusion between

tant by stating holding that unlike in court's Donaldson "[t]he Donaldson, toxic in dioxide involved carbon recognized for centuries." lead have been effects of Majority op. at 137-38. majority point of Donald- misses the 107. The applicability ignores plain in this case. It is its

son and of Donaldson to in the wake from our decision clear original opinion appeals' in case this vacate the court 3 reading pollution exclu majority's overly of the broad The effects, by the wide-ranging as evidenced have sion clause could in Donaldson: following examples discussed coverage bodily injuries broadly [Rleading the clause would bar spilled by slips contents of a bottle and falls on the suffered one who allergic Drano, bodily injury by an reaction to and for caused Although public pool. chlorine are both Drano and chlorine in a conditions, cause, under certain or contaminants irritants ordinarily damage, bodily injury property charac- one would not or pollution. as terize these events Donaldson, (quoting Pipefitters 211 Wis. 2d at 233 Welfare 1037, 1043-44 Co., 976 F.2d Fire Ins. Educ. Fund v. Westchester (7th 1992)). Cir. reading pollu-

Similarly, argued that a broad it has been covering "contaminants" or as all tion exclusion clause illusory, coverage policy's because would render the "irritants" irritate, can spoiled can food "scalding from a faucet water (i.e., stairway a paper) can cause poison, trash waste on (N.Y. York, N.Y.S.2d 553 v. New 597 fall." Oates Oates 1993). argument as "well described this The Oates court Ct. Cl. ultimately lead was a taken," though found that the court even "pollutant." Id. at 553-54. holding Donaldson affected the

that we felt that our case,4 outcome of yet this the majority today reaches the very same conclusion as that reached by the court in the appeals opinion we vacated! Donaldson, Further, we concluded that a reasonable insured would not understand necessarily carbon dioxide "pollutant" to be a because carbon diox- ide build-up and inhalation is an "everyday activity but not surprisingly, awry.'" Donaldson, 'gone slightly, 211 Wis. 2d at 233 (quoting Pipefitters, F.2d at procedural history of this case evinces this court's opinion holding obvious that our in Donaldson would have a significant analysis case, effect on the of this which involves the very Donaldson, same exclusion clause. Prior to appeals court of determined in this case that the exclu precluded coverage sion alleged injuries. clause for Peace's See 96-0328, Peace v. unpublished Northwestern Nat'l Ins. No. (Wis. curiam). slip op. 4, 1997) at App. (per Following Ct. Feb. Donaldson, appeals' we vacated the court of decision and light remanded the matter for another decision in ofDonaldson. Co., 529, See Peace v. Northwestern Nat'l Ins. 211 Wis. 2d 568 (1997). 297 upon N.W.2d We also vacated the case which the relied, appeals primarily court of Sukup, Vance v. 207 2dWis. (Ct. 19.96). 578, App. 558 N.W.2d Sukup, 683 See Vance v. 211 (1997). Wis. 2d 568 N.W.2d 297 case, In appeals its second decision in this the court of determined, Donaldson, light pre- in of that the did clause not coverage injuries. clude for Peace's See Peace v. Northwestern (Ct. 165, 167, App. Nat'l Ins. 215 Wis. 2d 573 N.W.2d 1997). Curiously, majority today of our court reverses the appeals' court of second decision and reaches the same conclu- appeals sion as that reached the court of in its initial decision, which we vacated after Donaldson. It unclear how guidance citizens ofthis state are to derive from decisions ofthis court when interpretations we set forth inconsistent ofthe same only years apart. exclusion clause cases two

1043-44). Pipefitters language which we The peeling quote specifically as an listed chose to example slightly, "everyday activit[y] gone but of an Pipefitters, (quoting awry." surprisingly at 233 Id. not 1043-44). 976 F.2d at Through sparse and dismis-

¶ its discussion majority Donaldson, fails to clearly applicable prece- treatment of sive acknowledge important and Contrary majority, I to the this court.5 dent from thorough, a com- mandates conclude that Donaldson analysis a reasonable insured of whether mon-sense fitting unambiguously interpret within lead as would "pollutant." definition of a generally con- is a term which 110. "Pollutant" heavy jures images up smokestacks and of industrial lay person. machinery mind a reasonable in the layers Dirty streams, and thick lakes, chemical-laden immediately smog typify occur to the items which pollu- "pollution." upon hearing person the word "paint," "lead," or does not refer to tion exclusion clause might give any comparable a hint to a term which other are that common materials which reasonable insured qualify benign could as in normal circumstances "pollutants." Dictionary likewise do not definitions might encompass "pollutant" the term

indicate paint. in the American "Pollutant" is defined lead Heritage "Something pollutes, espe-

Dictionary as, cially soil, air, material that contaminates a waste (3d Heritage Dictionary ed. American water." 1992). "pollute" "1. are: To The relevant definitions ’ applicable recognized that Donaldson is Other courts have "pollutant" under determining paint is a whether lea'd when See, e.g., Danbury v. Ins. Co. exclusion clause. 1998). (Conn. 279, Novella, Super. Ct. 727 A.2d living things, especially by make unfit for or harmful to the addition of waste matter. . . .2. To make less suita- activity, especially by ble for an the introduction of lights polluted sky unwanted factors: The stadium observatory. impure morally around the 3. To render or corrupt." Heritage Dictionary harmful; American (3d 1992). ed. paint

¶ 112. The lead in does not fit within these common definitions. Lead was not "waste matter" paint case, added to the in this and it was not an paint. contrary, "unwanted factor" On the intentionally ingre- was included as one of the desired paint's paint original dients in the at the time of the lay person reason, manufacture. For this a reasonable necessarily paint "pollu- would not the lead in view as a explained: tant." As one court A common understanding pollutant of a is a sub- stance "pollutes" impure renders previously object, unpolluted as when chemical wastes supply. leach into a clean water Here the lead did pollute paint: purposefully not it was incorporated paint into the from the start. The paint intentionally applied premises. was to the At time, paint legal. It was was considered neither impure nor unwanted. Stringfield, 980,

Insurance Co. Ill. v. 685 N.E.2d (Ill. 1997). App. 983 - 84 Ct. See also WestAm. Ins. Co. v. (N.C. Flooring East, Inc., 692, 409 S.E.2d Ct. Tufco 1991) App. (holding vapors flooring resin "pollutant" flooring were not a because resin was not an unwanted "contaminant" at the time it inten was tionally brought premises). onto the It follows that the unlike lead in the fabric softener which became attached to ice cream cones stored in the same ware- v. Ace Fire Insurance Co. States

house in United (Ct. App. Baking 499, 476 N.W.2d 280 Co., 164 Wis. 2d 1991). dioxide in.Donald- Further, lead, like the carbon present as a which is common substance son, is a ordinary ingredient as lead items such in harmless crystal.6 jurisdictions all over are Cases from other lead in unam- the issue of whether

the biguously on board clause's definition exclusion fits the major- agree "pollutant." courts with While some 6 citation, majority makes a statement to the Without in one scenario "pollutant" is a that a substance which effect scenario, it every regardless of whether "pollutant" in must be a majority op. at 130 material. See incorporated into another 3, and footnote such a previously I in the text explained n. 16.As wholly clause is reading sweeping holding contrary to our in Donaldson.

Moreover, majority its "once how the reconciles it is unclear its reliance earlier always pollutant" a rule with pollutant, a Baking Fire Insurance Co. v. Ace opinion on United States its (Ct. 1991), 499, 476 App. and 280 Vance 164Wis. 2d N.W.2d (Ct. 1996), 578, App. Sukup, 2d 558 N.W.2d 683 v. 207 Wis. (1997). majority vacated, The 211 Wis. 2d 568 N.W.2d appeals noted that Baking, in Ace the court of points out that ingredient for some uses" linalool was a "valued the chemical setting "pollutant" particular in the factual though it was a even Baking, 2d Majority (quoting Ace 164 Wis. op. case. at 128 ofthe 505). stating Baking the Ace court as majority quotes The at always pollutant; indeed that is that "it is a rare substance non-pol appropriate their of materials have most noxious Baking, 164 Wis. luting Majority op. (quoting at 128 Ace uses." 505). following passage from majority quotes the at also 2d Baking, status as in Ace a substance's Vance: "As we noted it ingredient depends contaminant on where valued or a either a Vance, Wis. 2d at Majority op. (quoting . . ." at is. 583-84).

ity universally lead is considered be a pollutant,7 (including cases other courts several courts) supreme opposite state reach the conclusion.8 by majority Moreover, some cases cited support position of its must be discarded court this contrary holding scope as to our in Donaldson that the despite wording, clause, of the its broad must "cir- be Donaldson, cumscribed reasonableness." 211 Wis. Contractors, 2d at 233. See Shalimar Inc. v. American (M.D. Supp. Co., 1450, States Ins. 975 F. 1457 Ala. 1997); Leger Co., St. v. Fire American and Cas. Ins. 870 (E.D. 1994). Supp. any 641, event, F. range 643 Pa. In "the variety judicial opinions bolsters the con- pollution ambiguous." clusion that the exclusion here is Org., v. Co., Inc. Chubb Custom Ins. F. 942 Lefrak 1996). (S.D.N.Y. Supp. 949, 957 v. See also Sullins All- (Md. 1995). Co., 617, state Ins. A.2d 624 667 kept It 114. must also be in mind that a reason- expect coverage able insured would that is consistent 7 See,e.g., Leger v. Casualty St. American Fire and Insur (E.D. Co., Supp. 641, 1994); ance 870 F. 643 Pa. Shalimar Contractors, Co., 1450, Inc. v.American Ins. 975 F. Supp. States (M.D. 1997); Hanson, 1457 Ala. v. Auto-Owners Ins. Co. 588 (Minn. 777, 1999); Oates, N.W.2d 779 Ct. App. 597 N.Y.S.2d at 8 supreme paint Several that state courts have'held lead in fit unambiguously "pollutant" does not within the definition of See, in pollution e.g., exclusion Atlantic clause. Mutual Ins. (Mass. McFadden, 762, 1992); Co. v. 595 N.E.2d 764 Sullins v. (Md. Co., 617, 1995); Royal Allstate Ins. A.2d 667 620 Weaver v. (N.H. 1996). Am., 975, Ins. Co. 674 A.2d 977-78 See, agree. Sphere e.g., Other courts Drake Ins. v. Y.L. Co. (S.D.N.Y. Co., 240, Realty F.Supp. 1997); Danbury 990 244-45 283; Stringfield, Ins. 727 A.2d at Co. v. Insurance Ill. (Ill. 980, App. 1997); N.E.2d Ct. Generali-U.S. v. Branch 299 (N.Y. 1994). Realty Corp., Sup. Caribe N.Y.S.2d Ct. policy provided. purpose See of the insurance with the case involves a Cas., 2d at 183. This General 209 Wis. (CGL) liability policy. general comprehensive "The against designed protect an insured CGL was damage resulting liability negligent to third acts (quoting parties." Anderson, Arnold P. Id. at 183-84 (3d § & 5.14, at 136 ed. 1990 Insurance Law Wisconsin Supp. 1997)). purpose, a rea- In accordance with this coverage expect for his or her landlord would sonable negligent if the lead later failure to remove persons, injury such as Kevin to other resulted Peace. lengthy majority provides reci- also 115. The history clause, exclusion

tation of concluding support it not the conclusion does "discharge," "dispersal," "release," and the terms "escape" art in environmental in the clause are terms of majority op. Because I find that the See at 139-44. law. required first condition for the apply case, in this I need not dis- clause to is not met (whether there was a the second condition cuss pol- "discharge, dispersal, the terms of the etc." under icy). Donaldson, 211 2d at 233 n.6. It is See Wis. significant, con- however, that several courts have pollution aimed at exclusion clause is cluded that the pollution.9 dealing and environmental with industrial 9 among Significantly, appeals our court of is these courts: history pollution that the the CGL exclusion clause shows liability industry concerned about if faced from envi- insurance was spills and under federal ronmental accidents such as oil history any legislation. Nowhere in his is there environmental suggestion clause was intended to that the exclusion damage. coverage liability for environmental exclude more than (Ct. 574, 584, Pautsch, 702 v. 180 Wis. 2d 510 N.W.2d Beahm 1993). App.

162 Realty e.g., Sphere See, Co., Drake Ins. Co. v. Y.L. (S.D.N.Y. 1997); Supp. Sullins, 240, 667 A.2d at F. Realty Corp., 622-23; Branch v. Caribe Generali-U.S. (N.Y. 1994); Sup. 296, 298-99 Ct. West 612 N.Y.S.2d Pointing Co., at 699. out that no Am. Ins. 409 S.E.2d language specifi- has been added to the clause to ever paint, cally lead-based these courts address lead or to the clause have have concluded that amendments paint unambigu- failed to include lead lead-based ously "pollutant," thus, have not in the definition of purpose clause to exclude altered the historical of the pollution. Sphere and industrial See environmental Drake, 243-44; Generali, F.2d at 612 N.Y.S.2d at Co., 299; WestAm. Ins. 409 S.E.2d at 699. reasons, 116. For these and consistent with agree many hold

Donaldson, I with the courts which language policy might sug- that while the broad gest paint "pollutant," in is a a reasonable that lead including "pollutant" understand as not insured could many agree paint. Consequently, I lead in with unambigu- paint lead in is not courts which hold that ously "pollutant" in included the definition of within clause. A rule insurance inter- cardinal "ambiguities policy's pretation terms are to is that in coverage, coverage while exclu- resolved in favor of be against narrowly construed sion clauses are (citing 2d at 230 Donaldson, insurer." See Wis. 808, 811, Mut. 155 Wis. 2d Smith v. Atlantic Ins. (1990)). I that the Because conclude 456 N.W.2d 597 pollution ambiguous as to whether exclusion clause require "pollutant," principles is a these against North- I the clause this case construe Consequently, that in I must conclude western.10 "pollutant" policy, such that not a under the is preclude pollution clause does not cover- the exclusion injuries. age for Peace's already explained, this As I case have duty Therefore, to if in the context of the defend.

arises any possibility if would, that Peace's claims there is proved, policy, liability the

result in under the terms of required to hold Northwestern has a this court ambiguity duty on defend the suit. Based the the to possi- clause, exclusion I conclude that such judgment bility Summary exists. to Northwestern on duty improper in this case. to defend issue was point position conclusion, In I out that the majority remedy, many of the denies an effective instances, to children like Kevin Peace who have suf- injuries paint. majority as a of lead in The fered result regarding and cites numerous articles statistics vulnerability poisoning to lead children majority tragic consequences op. which can result. See n.13, n.2, n.12, 123-25, at 111 123-24 137-38 majority's parade 18-19, nn. 144-45. The of horribles availability importance underscores the of the of insur- coverage damages ance for collection of children 10 Donaldson, explained purpose the rule In we against ambiguous language policies in insurance is construed underlying principle straight the insurer: "The the doctrine is policy, As the an insurer forward. drafter of the insurance has opportunity employ expressive exactitude order to Donaldson, misunderstanding policy's avoid a terms." (see subject cases on Wis. 2d at 230. number of footnotes 8) provided ample 7 and Northwestern with notice that lead in paint might unambiguously not be in its included duty clause. If had to avoid its Northwestern wished . case, it have the clause. defend this could redrafted logic injured paint-related incidents. The inher- in lead deny majority's decision to insurance in the ent coverage alleged negligent in such to landlords be light to understand in of the circumstances is difficult recognition majority's seriousness problem. join majority's apparent I cannot poisoning. short, In I

assault on child victims of lead majority's find the decision to be inconsistent with the duty analyzing whether an insurer has a rules for two-year-old defend, inconsistent with this court's deci- Donaldson, and inconsistent with the well- sion policies principle that insurance are to be inter- settled preted perspective I ofthe reasonable insured. from the appeals' decision, and there- would affirm the court respectfully I fore, dissent. that Justice WIL- I am authorized to state joins this dissent.

LIAM A. BABLITCH

Case Details

Case Name: Peace Ex Rel. Lerner v. Northwestern National Insurance

Court Name: Wisconsin Supreme Court

Date Published: Jul 9, 1999

Citation: 596 N.W.2d 429

Docket Number: 96-0328

Court Abbreviation: Wis.