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West American Insurance Co. v. Baumgartner12/20/1990
The plaintiff, West American Insurance Company, sued its insured, F.W. Baumgartner, seeking a judgment declaring that it had no duty to defend or indemnify him in certain federal court litigation. The trial court entered summary judgment for West American. Baumgartner appeals, and we affirm.
The State of Colorado brought an action against three mining companies in federal court to recover the cost of cleaning up polluted surface and ground waters under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. ยง 9601, et seq. (1982). The state alleged that the mining companies had released hazardous substances into the waters through active mining operations.
The mining companies then filed a third-party complaint against Baumgartner and others, who also owned mining properties in the area, alleging that they would be liable for contribution if the state prevailed. Although Baumgartner did not engage in active mining operations, the mining companies alleged that acid mine waters from his properties contributed to the pollution.
West American insured Baumgartner's properties under a comprehensive general liability policy. When Baumgartner requested that West American provide him with a defense in the federal suit it agreed to do so, but under a reservation of rights agreement. Thereafter, West American brought a declaratory judgment action against Baumgartner, and the trial court entered summary judgment in its favor.
Baumgartner first contends that the trial court erred in finding that the insurance policy was not ambiguous. Specifically, he asserts that the definition of an "occurrence" in the policy conflicts with the "sudden and accidental" exception to the pollution exclusion clause. We disagree.
"Insurance contracts are to be construed according to the general rules for construction of contracts." Marez v. Dairyland Insurance Co., 638 P.2d 286 (Colo. 1981). The words must be given their plain and ordinary meaning. Chacon v. American Family Mutual Insurance Co., 788 P.2d 748 (Colo. 1990). When a policy is unambiguous we may not "rewrite it to arrive at a strained construction," Chacon, supra, or "force an ambiguity in order to resolve it against an insurer." Kane v. Royal Insurance Co., 768 P.2d 678 (1989).
The policy at issue extended coverage to certain occurrences. The term "occurrence" was defined as:
"an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured. . . ."
The policy also contained a "pollution exclusion" clause which provided that the following was excluded from coverage:
"bodily injury or property damage arising out of the discharge, dispersal, release or escape of . . . acids, alkalis, toxic chemicals, liquids or gases . . . into or upon land, the atmosphere or any water course or body of water; but this exclusion does not apply if such discharge, dispersal, release or escape is sudden and accidental . . . ."
Relying on American Motorists Insurance Co. v. General Host Corp., 667 F. Supp. 1423 (D. Kan. 1987), the trial court held the policy was not ambiguous. In American Motorists, after construing the same provisions as those at issue in this case, the court found that "'occurrences,' as defined, are covered unless the occurrences arise out of pollution events; those are not covered unless such pollution events are sudden and accidental." Accordingly, the American Motorists court held that it:
"cannot conclude that the pollution ex
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