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Aydin Corp. v. First State Insurance Co.8/20/1998
icies at issue, First State had to prove, as expressly required by Evidence Code section 500, the "existence" of "each fact" "essential" thereto. For example, it had to prove that any "liability" on Aydin's part arose from the "discharge, dispersal, release or escape" of pollutants. In order to prove that Aydin's claim came within the qualified pollution exclusion of either or both of the policies, it also had to prove, as expressly required by the same provision, the "nonexistence" of "each fact" "essential" thereto. For example - and this is the crux of the matter - it had to prove that "such discharge, dispersal, release or escape" was not "sudden" and "accidental."
On this point, the majority do indeed express disagreement. They state that First State had to prove the "existence" or "nonexistence" of "each fact" "essential" to the main clause of the qualified pollution exclusion - " his policy shall not apply" "to any liability . . . arising out of the discharge, dispersal, release or escape" of pollutants - but that Aydin had to prove the "existence" or "nonexistence" of "each fact" "essential" to the subordinate clause - "unless such discharge, dispersal, release or escape is sudden and accidental." They reason, in substance, as follows: the subordinate clause is an "exception" to the exclusion; as such, it is an insuring clause; and, consequently, it is Aydin that must bear the burden of proof thereon.
The majority's sundering of the qualified pollution exclusion, which is but a single sentence, into its main and subordinate clauses, and their separate allocation of the burden of proof to First State and Aydin, respectively, as to each one simply does not work. That is because the ground for their action is unsound.
First, the subordinate clause of the qualified pollution exclusion is not an "exception" to the exclusion because the main clause is not itself the exclusion. Rather, the main and subordinate clauses together constitute what is, in fact, a single sentence and what is, in law, a unitary exclusion. The main clause, which defines the general scope of the exclusion, and the subordinate clause, which identifies its precise dimensions, are necessarily interrelated - not unlike the definition of a square as a rectangle with four equal sides and the identification of the length of the sides. The following point, however, bears emphasis. The main clause is syntactically "independent," and hence can stand without the subordinate clause: "This policy shall not apply" "to any liability . . . arising out of the discharge, dispersal, release or escape" of pollutants. By contrast, the subordinate clause is syntactically "dependent," and hence cannot stand without the main clause: "unless such discharge, dispersal, release or escape is sudden and accidental."
Second, even if the subordinate clause of the qualified pollution exclusion were an "exception" to the exclusion, it could not be deemed an insuring clause. For it could not reasonably be read to impose a duty on First State to indemnify Aydin for all sums that Aydin might be obligated to pay by reason of "any liability . . . arising out of the" "sudden and accidental" "discharge, dispersal, release or escape" of pollutants. For, even in the face of "liability" on Aydin's part "arising out of . . . such discharge, dispersal, release or escape," First State might be free from any duty to indemnify Aydin for a host of reasons, as for example that the liability in question was not predicated on personal injury or property damage. No, the subordinate clause could not be deemed an insuring clause. Rather, together with the main clause it simply constitutes an exclusionary clause.
Having scrutinized the m
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