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The full case caption appears at the end of this opinion.This case involves the applicability of an insurancepollution exclusion clause to a claim based on a negligence tort. TheCourt of Appeals ruled the clause did not apply. We affirm. FACTS In August 1994, Steve Gugenberger delivered diesel fuel to Kent Farms,Inc. (Kent Farms). After filling the farm’s fuel storage tank, he closedthe tank’s intake valve and started to remove the delivery hose. Becauseof a faulty intake valve, fuel back-flowed over him. He struggled toreplace the hose, to stop the potential spill of thousands of gallons ofdiesel fuel. Fuel was driven into his eyes, his lungs, and his stomach,causing him significant injury. Gugenberger filed suit against Kent Farms in Adams County Superior Court.Kent Farms had a commercial farm liability insurance policy underwritten byZurich Insurance Company (Zurich Insurance) in force at the time. Amongother things, the policy provided it would pay ‘those sums that the’insured’ becomes legally obligated to pay as damages because of ‘bodilyinjury’ or ‘property damage’ to which the insurance applies. We will havethe right and duty to defend any ‘suit’ seeking those damages.’ Clerk’sPapers at 10. Kent Farms turned to Zurich Insurance for help. ZurichInsurance refused to pay the claim or defend Kent Farms against the suit onthe grounds the coverage was precluded by a pollution exclusion clause inthe policy. Kent Farms brought a declaratory action to force ZurichInsurance to defend or pay a settlement. At summary judgment, the trialcourt found the exception did not apply to exclude coverage. The Court of Appeals upheld the trial court on the grounds that diesel fuel’is not a pollutant when used as intended’ and, thus, was not covered bythe clause. Kent Farms, Inc. v. Zurich Ins. Co., 93 Wn. App. 414, 419-20,969 P.2d 109 (1998). The court also found the clause ambiguous under thesefacts because it could be read as excluding any injury involving dieselfuel, or only traditional environmental injuries. Kent Farms, 93 Wn. App.at 420. Zurich Insurance petitioned this court for review of the Court ofAppeals decisions, which we granted. For the purpose of this appeal, Zurich Insurance agrees the claim is a’bodily injury’ as defined by the insurance policy. Therefore, the issueis whether the pollution exclusion clause applies to a claim not based onenvironmental damage but on personal injury arising from alleged negligenceon the part of the insured. Zurich Insurance’s pollution exclusion clausereads as follows: 2. Exclusions This insurance does not apply to: . . . . c. (1) ‘Bodily injury’ and ‘property damage’ arising out of the actual,alleged or threatened discharge, dispersal, seepage, migration, release orescape of pollutants: . . . . Pollutants means any solid, liquid, gaseous or thermal irritant orcontaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicalsand waste. Waste includes materials to be recycled, reconditioned orreclaimed. Clerk’s Papers at 10-11. ANALYSIS Summary judgment is reviewed de novo, with all inferences taken infavor of the nonmoving party. Reid v. Pierce Co., 136 Wn.2d 195, 201, 961P.2d 333 (1998). It should be granted only if ‘there is no genuine issueof material fact and the moving party is entitled to judgment as a matterof law.’ Reid, 136 Wn.2d at 201. Interpretation of an insurance policy isa matter of law. American Star Ins. Co. v. Grice, 121 Wn.2d 869, 874, 854P.2d 622 (1993), supplemented on other grounds by 123 Wn.2d 131, 865 P.2d507, 44 A.L.R.5th 905 (1994). Policy language is to be interpreted as theaverage person would understand it, not in a technical sense. AmericanStar Ins., 121 Wn.2d at 874. Here, the underlying injury and cause of action are rooted innegligence, not in environmental harm caused by pollution. The plaintiffalleges negligence in the maintenance and design of a fuel storage facilitythat resulted in immediate bodily injury when a high-pressure jet of liquidstruck him. We must decide whether the fact a pollutant appears in thecausal chain triggers application of the exclusion clause. To do this, wemust determine the purpose and scope of the exclusion. In Queen CityFarms, we adopted the analytical approach used in resolving this question.Queen City Farms, Inc. v. Central Nat’l Ins. Co., 126 Wn.2d 50, 882 P.2d703, 891 P.2d 718 (1995). Although the precise issue in Queen City Farmswas different from the issue here, the analytical approach is equallyapplicable. We said: {C}onstruction of policy language is for the court and undefined termsshould be given their plain, ordinary, and popular meaning in accord withthe understanding of the average purchaser of insurance . . . . The first step is to examine the language of the policies and construeit as a whole. As noted, coverage for pollution caused damage under the{insurance} policies is determined by reference to the primary policiesunder the {insurance} policies. To decide what is encompassed by thequalified pollution exclusion found in some of the primary policies, weexamine the exclusion in context . . . . . . . . We are solely concerned with what the qualified pollution exclusion means, and that question is resolved in part by reference to the restof the language of the primary policies, including the ‘occurrence’definition which they contain. Queen City Farms, 126 Wn.2d at 74-75 (emphasis added). Put another way, we are required to view the exclusion in light of thewhole policy to determine whether, in that context, the exclusion applies.We begin by examining what the exclusion and similar exclusions areintended to accomplish. The qualified pollution exclusion clause, a precursor to the clause atissue here, came into existence so insurers could avoid the ‘yawningextent of potential liability arising from the gradual or repeateddischarge of hazardous substances into the environment.’ Waste Managementof Carolinas, Inc. v. Peerless Ins. Co., 315 N.C. 688, 698, 340 S.E.2d 374(1986). Later, various forms of absolute pollution exclusion clauses,including the clause here, were incorporated into insurance policies in thewake of expanded environmental liability under the ComprehensiveEnvironmental Response, Compensation, and Liability Act of 1980, 42 U.S.C.sec.sec. 9601-9675 (1995) (CERCLA). See Queen City Farms, Inc. v. CentralNat’l Ins. Co., 64 Wn. App. 838, 873-84, 827 P.2d 1024 (1992) (surveyingthe history of the clause). These clauses were clearly intended toexculpate insurance companies from liability for massive environmentalcleanups required by CERCLA and similar legislation. See generally JeffreyW. Stempel, Reason and Pollution: Correctly Construing the ‘Absolute’Exclusion in Context and in Accord with its Purpose and Party Expectations,34 Tort & Ins. L.J. 1, 5 (1998). The insurance companies’ objective increating both clauses was to avoid liability for environmental pollution.To read the absolute exclusion clause more broadly ignores the generalcoverage provisions. This exclusion clause does not deal with the discharge of substances thatmay also be pollutants directly onto (and into) an individual; rather, thisclause specifically addresses those situations in which injury was causedby environmental damage. We, therefore, hold the absolute pollutionexclusion clause relates to environmental damage, and not to the facts ofthis case. Zurich Insurance argues the pollution exclusion clause applies becausediesel fuel is a pollutant. However, this reasoning misunderstands thenature of the claim. Gugenberger was not polluted by diesel fuel. Itstruck him; it engulfed him; it choked him. It did not pollute him. Mostimportantly, the fuel was not acting as a ‘pollutant’ when it struck himany more than it would have been acting as a ‘pollutant’ if it had been ina barrel that rolled over him, or if it had been lying quietly on the stepswaiting to trip him. To adopt Zurich Insurance’s interpretation wouldunjustly broaden the application of the exclusion far beyond its intendedpurpose. To apply the pollution exclusion clause to the injury in this case would becontrary to this court’s previous stance on interpreting exclusion clauses.We have previously held the average purchaser of a comprehensive liabilitypolicy reasonably expects broad coverage for liability arising frombusiness operations and ‘exclusions should be construed strictly againstthe insurer.’ Queen City Farms, 126 Wn.2d at 74, 78. Certainly, KentFarms could reasonably believe from the policy language that acute bodilyinjury caused by negligently maintained or operated equipment is covered bythe policy and beyond the scope of the pollution exclusion clause.This approach is consistent with that of other courts that have found suchpollution exclusion clauses do not apply much beyond traditionalenvironmental torts. The Pennsylvania Superior Court observed that aninsurance company’s attempt to apply the exclusion to injuries resultingfrom fumes caused by a clogged flue was simply an opportunisticafterthought, at odds with the original purpose of providing protection toinsurance companies from a potentially vast and unforeseen liability formajor environmental disasters. Gamble Farm Inn, Inc. v. Selective Ins.Co., 440 Pa. Super. 501, 508, 656 A.2d 142 (1995). (‘The pollutionexclusion is directed – at least it was initially – at claims involving thepollution of the natural environment.’). The New York Court of Appealsheld that a similar clause did not apply to injuries arising from theinhalation of asbestos fibers, on the grounds it was ambiguous whether theclause applied to the release of asbestos fibers indoors. Continental Cas.Co. v. Rapid-American Corp. 80 N.Y.2d 640, 653, 609 N.E.2d 506, 593N.Y.S.2d 966 (1993). The results and theories of these cases are consistent with the analyticalapproach we follow in deciding the scope of the pollution exclusion. Theexclusion, when viewed in the context of its purpose, does not apply merelybecause a potential pollutant was involved in the causal chain. Instead,the exclusion applies to ‘occurrences’ involving the pollutant as apollutant. Our approach is consonant with the understanding of the averagepurchaser of insurance and consistent with the provisions of the insurancepolicy as a whole; that is, the pollution exclusion clause was designed toexclude coverage for traditional environmental harms. We will not expandthe scope of the exclusion clause beyond its intended purpose. We affirm the Court of Appeals and hold the pollution exclusion clause doesnot apply under the facts of this case. Pursuant to Olympic S. S. Co.,Ins. v. Centennial Ins. Co., 117 Wn.2d 37, 52, 811 P.2d 673 (1991), wegrant respondent’s request for reasonable attorney fees. WE CONCUR
Kent Farms, Inc. v. Zurich Ins. Co. Supreme Court of the State of Washington No: 67635-6 KENT FARMS, INC., a Washington corporation, Respondent, v. ZURICH INSURANCE COMPANY, a foreign corporation, Petitioner. Filed: April 27, 2000 Aruged: September 21, 1999 Appeal From: Superior Court, Adams County Before: Charles W. Johnson, Richard P. Guy, Charles Z. Smith, Barbara A. Madsen, Gerry L. Alexander, Philip A. Talmadge, Richard B. Sanders, and Faith E Ireland Counsel for Petitioner(s): Jacquelyn A. Beatty and Laura Foggan Counsel for Respondent(s): Brian H. Miller and Dano Miller Ries Amicus Curiae on behalf of Unied Policy Holders: John A. Hoglund and John A. MacDonald
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