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Aerojet-General Corp. v. Industrial Underwriters Insurance Co.2/28/2002
ornia appellate courts have consistently held that the "sudden and accidental" exception to the qualified pollution exclusion unambiguously means an abrupt, unintended, and unexpected discharge of pollutants. Thus, the court rejected Aerojet's position that "sudden and accidental" could include gradual, unintended and unexpected discharges.
The court order further stated the insurers had met their burden under pertinent case law, by showing that Aerojet cannot reasonably be expected to make a prima facie showing that the claimed environmental damages arose from any sudden and accidental discharge of pollutants. The court discussed each of Aerojet's alleged sudden and accidental discharges and concluded, among other things, that some of the alleged incidents were routine disposal activities (hence not sudden and accidental), while others involved leaks resulting from gradual corrosion, which therefore did not constitute "sudden and accidental" discharge. The trial court discussed in detail Aerojet's arguments concerning specific contaminants--perchlorate, NDMA (nitrosodimethylamine), and TCE (trichloroethylene).
The trial court cited case law (Travelers Casualty & Surety Co. v. Superior Court (1998) 63 Cal.App.4th 1440) that where the insured invokes the "sudden and accidental" exception to the pollution exclusion and asserts a sudden and accidental event has occurred in connection with routine disposal of wastes, the insured must show that an appreciable amount of environmental damage was caused by the intervening event, over and above that caused by routine disposal, and courts decline to "microanalyze" an insured's long-term, routine disposal of industrial waste in order to find discrete sudden and accidental polluting events.
The trial court granted summary adjudication in favor of the insurers on the ground they had no duty to indemnify Aerojet in this case, because the pollution exclusion applied, and Aerojet had failed to raise a triable issue as to the "sudden and accidental" exception to the pollution exclusion.
Aerojet filed a motion for reconsideration or new trial, seeking to address the question whether the alleged sudden and accidental discharges caused damage. Aerojet argued among other things that the insurers' motion had not given notice that causation was at issue. The trial court determined there was no basis for reconsideration or new trial and denied the motion. The court said there was no due process violation, and Aerojet had failed to provide any satisfactory explanation why the new evidence it now sought to present could not have been presented during the summary adjudication proceedings.
After summary adjudication was granted negating any duty to indemnify, the trial court dismissed Aerojet's remaining claims (alleging a duty to defend), at Aerojet's request. On January 3, 2000, the trial court entered judgment in favor of the moving party insurers and other insurers similarly situated who were given the benefit of the court's order by stipulation. Aerojet appeals.
DISCUSSION
I. The Pollution Exclusion and Standard of Review
"The pollution exclusion applies to the discharge of pollutants into or upon the land, air or water. The sudden and accidental exception to the pollution exclusion refers to the discharge of pollutants. `Sudden' has a temporal element and does not mean a gradual or continuous discharge. [Citations.] `Accidental' means an unexpected or unintended discharge, not unexpected or unintended damage. [Citation.] The pollution exclusion is `not contingent on whether the insured expected or intended any property damage. Instead, the exclusion depend on the nature of the
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