“Expected or Intended Injury” and “Pollution” Exlusions
The insurer had issued a comprehensive general liability policy to the insured that was in place during the underlying claim. Homeowners filed a class action alleging the insured had caused bodily injuries and property damage to plaintiffs by the releasing of certain emissions from their manufacturing site. The underlying complaint alleged a continuous invasion of persons and property by odors and air contaminants. The insured manufactured cultured marble vanities, counter-tops and other synthetic products at its facility. Along with other chemicals, the insured used styrene and methyl methacrylate (MMA) in its manufacturing processes which create odorous emissions that were dispersed into the atmosphere. The insurer sought for the court to declare that it had no duty to defend the insured in the class action because coverage was barred by the “expected or intended injuries” and “pollution” exclusions.
The court decided that the “expected or intended” injury provision did not apply because the insured had obtained the permits to release certain amounts of emissions, which showed that they did not intend to cause the injuries and they were accidental. The court held that the issue was whether the insured intended the injuries, not whether it intended only the emissions.
The court then decided that the “pollution” exclusion did not apply because of its ambiguousness. The court stated that the term “pollution” under the policy exclusion was defined in a way that was arguably ambiguous as to whether the emission of hazardous materials in levels permitted by the IEPA permit constituted traditional environmental pollutants excluded under the policy. They held that it did not matter whether the emissions were traditional environmental pollution because the policy’s “pollution” exclusion was ambiguous to the issue. Since ambiguities must be resolved in favor of the insured, the court held that Erie owed a duty to defend Imperial on the underlying class action claim.
Erie Insurance Exchange v. Imperial Marble Incorporation, 957N.E.2d1224, (Ill.App. 3 Dist., 2011), No. 3-10-0380
