Connecticut Specialty Insurance Co. v. Loop Paper Recycling2/17/2005
d stating that it was "troubled" by "an overbreadth in the language of the exclusion as well as the manifestation of an ambiguity which results when the exclusion is applied to cases which have nothing to do with 'pollution' in the conventional, or ordinary, sense of the word" (Koloms, 177 Ill. 2d at 488), the court "restricted the exclusion's otherwise potentially limitless application to only those hazards traditionally associated with environmental pollution" (Koloms, 177 Ill. 2d at 489).
After extensively recounting the "'well-documented and relatively uncontroverted [citation]'" (Koloms, 177 Ill. 2d at 489) historical events leading up to the insurance industry's adoption of the absolute pollution exclusion (see Koloms, 177 Ill. 2d at 489-93), the court determined that the "predominate motivation in drafting an exclusion for pollution-related injuries was the avoidance of the 'enormous expense and exposure resulting from the "explosion" of environmental litigation'" (emphasis in original) (Koloms, 177 Ill. 2d at 492, quoting Weaver v. Royal Insurance Co. of America, 140 N.H. 780, 783, 674 A.2d 975, 977 (1996), quoting Vantage Development Corp. v. American Environmental Technologies Corp., 251 N.J. Super. 516, 525, 598 A.2d 948, 953 (1991)). In other words, the "pollution exclusion has been, and should continue to be, the appropriate means of avoiding '"the yawning extent of potential liability arising from the gradual or repeated discharge of hazardous substances into the environment."' (Emphasis in original.) Koloms, 177 Ill. 2d at 493, quoting West American Insurance Co. v. Tufco Flooring East, Inc., 104 N.C. App. 312, 323, 409 S.E.2d 692, 699 (1991), quoting Waste Management of Carolinas, Inc. v. Peerless Insurance Ca., 315 N.C. 688, 698, 340 S.E.2d 374, 381 (1986).
Thus, the Koloms court found that in order for the absolute pollution exclusion to apply, there must be "traditional environmental pollution (Koloms, 177 Ill. 2d at 493), "which includes "'any "discharge, dispersal, release, or escape" of a pollutant * into the environment'" (Koloms, 177 Ill. 2d at 494, quoting Tufco, 104 N.C. App. at 325, 409 S.E.2d at 700). Applying this rule to the facts before it, the court found that, because the exclusion "applies only to those injuries caused by traditional environmental pollution," and because the accidental release of carbon monoxide that is contained inside a building is not a release of pollutants into the environment, the exclusion did not apply to bar coverage. See Koloms, 177 Ill. 2d at 494.
After Koloms, this court's first foray into the applicability of an absolute pollution exclusion occurred in Kim v. State Farm Fire & Casualty Co., 312 Ill. App. 3d 770, 776, 728 N.E.2d 530 (2000), where a cleaning company argued that its insurer had breached its duty to defend and indemnify after the company settled a lawsuit brought by the company's landlord for damages resulting from a pollutant which had seeped through the floor into the soil underneath the building. Kim, 312 Ill. App. 3d at 772-73. After recounting the rule delineated in Koloms, the Kim court held the absolute pollution exclusion barred coverage because, unlike in Koloms, the "hazardous material was not confined within the cleaning company's building, * but was discharged into the soil underneath its dry cleaning and laundry store." Kim, 312 Ill. App. 3d at 775. Because the hazardous material had escaped beyond the walls of the insured's building and into the soil below, the court found that "traditional environmental pollution" had occurred. Kim, 312 Ill. App. 3d at 775.
Though not explicitly stated in either Koloms or Kim, a primary factor to consider in determining if an occurrence const
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