Queen City Farms Inc. v. Aetna Casualty & Surety Co.9/9/1994
for several weeks while gasoline was pumped out of the ground. A number of surrounding businesses made claims for loss of profits and similar damage resulting from closure of the area. The claims were tendered to the insurer of the station, which declined to defend or pay. The insurer brought a declaratory judgment action to determine what, if any, its obligations were. The insurer relied upon the qualified pollution exclusion as precluding coverage.
The court in Van's Westlake Union reasoned that because neither the escape of the gasoline nor the resulting damage was expected or intended, the qualified pollution exclusion did not apply to preclude coverage. That conclusion is sound under our reasoning here.
However, in one respect we find that the explanation of the insurance industry relied upon by QCF would lead to an unreasonable construction of the exclusion. That is, QCF argues that the focus of the exclusion is on the damage and not the polluting event. As we have discussed at some length above, the language of the exclusion involves the polluting event, and not the resultant damages. The vast majority of courts agree, including those which otherwise find the exclusion ambiguous, as we have. E.g., New Castle Cy. v. Hartford Accident & Indem. Co., 933 F.2d 1162, 1199 (3d Cir. 1991) (while finding pollution exclusion ambiguous, nevertheless reasons clear that focus is on discharge and not damages); Claussen v. Aetna Cas. & Sur. Co., 259 Ga. 333, 336, 380 S.E.2d 686, 688-89 (1989) (same); Outboard Marine Corp. v. Liberty Mut. Ins. Co., 154 Ill. 2d 90, 180 Ill. Dec. 691, 607 N.E.2d 1204 (1992) (same); United States Fid. & Guar. Co. v. Star Fire Coals, Inc., 856 F.2d 31, 34 (6th Cir. 1988); Borden, Inc. v. Affiliated FM Ins. Co., 682 F. Supp. 927, 930 (S.D. Ohio 1987), aff'd, 865 F.2d 1267 (6th Cir. 1989), cert. denied, 493 U.S. 817 (1989); Hartford Accident & Indem. Co. v. United States Fid. & Guar. Co., 962 F.2d 1484, 1490, cert. denied, 121 L. Ed. 2d 335, 113 S. Ct. 411 (10th Cir. 1992) (under Utah law); Technicon Electronics Corp. v. American Home Assur. Co., 74 N.Y.2d 66, 542 N.E.2d 1048, 544 N.Y.S.2d 531 (1989); Lumbermens Mut. Cas. Co. v. Belleville Indus., Inc., 407 Mass. 675, 679, 555 N.E.2d 568, 571 (1990); Mays v. Transamerica Ins. Co., 103 Or. App. 578, 799 P.2d 653 (1990), review denied, 311 Or. 150, 806 P.2d 128 (1991); Oklahoma Pub'g Co. v. Kansas City Fire & Marine Ins. Co., 805 F. Supp. 905, 910 (W.D. Okla. 1992); but see, e.g., Just v. Land Reclamation, Ltd., 155 Wis. 2d 737, 157 Wis. 2d 507, 456 N.W.2d 570 (1990). The court in Van's Westlake Union also appears to have focused on damages; however, it also discussed the question whether the escape of the gasoline was expected or intended.
Because the focus of the exclusion is on the polluting event, and not the damages, we conclude the construction offered by QCF as advanced by the insurance industry and described in published appellate court decisions is not reasonable insofar as it focuses only on damage resulting from the polluting event. See Ballard & Manus, Clearing Muddy Waters: Anatomy of the Comprehensive General Liability Pollution Exclusion, 75 Colum. L. Rev. 610, 626 (1990) (observing that the standard explanatory memorandum of the insurance industry ignores the fact that the exclusion refers to the release of pollutants and not the damage caused by such releases).
Moreover, if all the exclusion did was restate the occurrence clause, that is, if it was wholly coextensive, it would be ineffective as an exclusion. In contrast, giving effect to the language of the pollution exclusion which focuses on the polluting event also results in giving some ind
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