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South Dakota State Cement Plant Commission v. Wausau Underwriters Insurance Co.8/23/2000
to SDCP.
[ ] Wausau further argues that the cement dust released by SDCP constitutes a "pollutant." The pollution exclusion defines "pollutant" as "any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste." Wausau claims that cement dust constitutes an "irritant" or "contaminate" within a literal dictionary definition of the terms. In addressing the dictionary definition of the terms, the circuit court noted that " lthough the factual allegations in the underlying complaint do fit within the broad dictionary definition of 'contaminants' or 'irritants,' [the case of Guilford Indus., Inc. v. Liberty Mut. Ins. Co., 688 FSupp 792, 794 (DMe 1988)] has succinctly explained why Wausau's proposed 'construction cannot be sanctioned[.]'" The court noted that if it were to use "such a broad construction would render the exclusion meaningless since any substance could conceivably irritate or contaminate."
[ ] In Guilford, a flooding Piscataquis River caused two pipes from Guilford's textile mill's oil tanks to rupture and damage property down river from the plant. 688 FSupp at 793. The insurer's policy contained a pollution exclusion which applied to "pollutants, defined, in part, as any liquid irritant or contaminant." Id. at 794. Guilford contended that "the terms 'contaminant,' 'irritant,' and 'chemicals,' viewed broadly and in isolation, are 'meaningless,' and that by applying such a construction, "any substance would meet the exclusion." Id. In granting the insurer's motion for summary judgment on the coverage issue, the court opined that Guilford was correct that "almost any substance might fall within the exclusion," but the provision is far from "all-inclusive or meaningless" because to fall within the exclusion, the substance must meet a "certain very precisely drawn circumstance : if it is an irritant or contaminant." Id. The court ultimately found that the pollution exclusion provision was "far from all-inclusive or meaningless." Id.
[ ] In the present case, the circuit court erred in its interpretation and application of Guilford. In addition, Guilford is distinguishable from the other cases cited by the circuit court because, in Guilford, the court ultimately upheld the provision as not being overly broad, but limited to a "certain very precisely drawn circumstance : if it is an irritant or contaminant." See Guilford, 688 FSupp at 794. Wausau's exclusion was intended not to cover any substance, but only those substances which irritate or contaminate.
[ ] The circuit court opined that Wausau had failed to affirmatively set forth evidence to establish that cement dust falls within the pollution exclusion. The trial court refused to use Wausau's string of broad definitions to determine the pollution exclusion applied and found that "such a broad construction would render the exclusion meaningless since any substance could conceivably irritate or contaminate." Wausau argues that they "did not have the burden to prove that the cement dust released from SDCP's facility is, in fact, a 'pollutant.'" We agree. As we stated earlier, it is the well settled law in this jurisdiction that an insurer has the burden of showing that no duty to defend exists and this burden is satisfied by proving that the insured's claim "'clearly falls outside of policy coverage.'" Wertz, 540 NW2d at 638 (quoting Kneen, 484 NW2d at 912 (citations omitted)) (emphasis in original). To determine whether the insurer has a duty to defend, we must only look to the complaint and other record evidence to determine whether the alleged claim, if true, falls within the policy coverage. See Hawkeye, 366 NW2d at 491.
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