Insurance Company of Illinois v. Stringfield

Annotate this Case
FIRST DIVISION
September 22, 1997

No. 1-96-0347
consolidated with
No. 1-96-0344


INSURANCE COMPANY OF ILLINOIS,

Plaintiff-Appellee,

v.

KATALINA STRINGFIELD; AMERICAN NATIONAL
BANK & TRUST COMPANY, Under Trust No.
60140; LAWRENCE WILLIS; and GLORIA
WILLIS,

Defendants-Appellants.
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) Appeal from the
Circuit Court of
Cook County

Honorable
Edwin M. Berman,
Judge Presiding.

JUSTICE GALLAGHER delivered the opinion of the court:
This consolidated appeal raises an issue of first impression
in Illinois: whether the standard pollution exclusion found in
general liability policies precludes coverage for personal
injuries arising out of a minor's ingestion of lead paint and
plaster chips inside his family's apartment.
The undisputed facts follow. Defendant Lawrence Willis,
when he was two years old, lived with his mother, defendant
Gloria Willis, in an apartment located at 8141 South Kingston in
Chicago, Illinois (the premises). The apartment is the subject
of a trust whereby defendant American National Bank & Trust
Company (the Bank) is the legal owner of the premises and
defendant Katalina Stringfield is the beneficial owner.
Plaintiff sold Stringfield a general liability insurance policy
covering the premises. The policy was in force from October 2,
1990 through October 2, 1992. Lawrence Willis and his family
were tenants on the premises from approximately June 24, 1989 to
June 24, 1991.
On March 10, 1994, Gloria Willis filed a lawsuit on behalf
of her son against several entities, including Stringfield and
the Bank. The complaint alleged that Lawrence Willis sustained
lead poisoning due to his consumption of lead-based paint and
plaster that had chipped, flaked, broken and fallen away from
various exposed surfaces of the premises.
On June 17, 1994, plaintiff brought the present action,
seeking a declaratory judgment that it had no duty to defend or
indemnify Stringfield in Gloria Willis' action against her.
Plaintiff included as defendants, Stringfield, the Bank, Lawrence
Willis and his mother Gloria Willis, all of whom were parties in
the original lawsuit filed by Gloria Willis. Plaintiff alleged,
among other things, in an amended complaint filed on March 30,
1995, that insurance coverage was precluded by the pollution
exclusion provision contained in the insurance policy issued to
Stringfield. That provision states, in pertinent part, that the
insurance did not apply:
"(1) to bodily injury or property damage arising out of
the actual, alleged or threatened discharge, dispersal,
release or escape of pollutants:
(a) at or from premises owned, rented
or occupied by the name insured[.]"
The policy defines "pollutants" as "any solid, liquid, gaseous or
thermal irritant or contaminant, including smoke, vapor, soot,
fumes, acids, alkalis, chemicals and waste. Waste includes
materials to be recycled, reconditioned or reclaimed."
On October 4, 1995, plaintiff filed its motion for summary
judgment, which was granted by the trial court on December 19,
1995. On January 17, 1996, Gloria and Lawrence Willis filed
their notice of appeal; on January 18, 1996, Stringfield and the
Bank filed their notice of appeal. The appeals were subsequently
consolidated. Our review of the trial court's summary judgment
ruling, because it involves an issue of law, is de novo. See,
e.g., Busch v. Graphic Color Corp., 169 Ill. 2d 325, 333, 662 N.E.2d 397 (1996).
In Illinois, when an insurer relies upon an exclusionary
clause in an insurance policy to deny coverage, the applicability
of the clause must be clear and free from doubt because any
doubts as to coverage will be resolved in favor of the insured.
Economy Preferred Insurance Co. v. Grandadam, 275 Ill. App. 3d
866, 869, 656 N.E.2d 787 (1995). "If the words in the policy are
unambiguous, a court must afford them their plain, ordinary, and
popular meaning. [Citation.] However, if the words in the policy
are susceptible to more than one reasonable interpretation, they
are ambiguous [citation] and will be construed in favor of the
insured ***." (Emphasis omitted.) Outboard Marine Corp. v.
Liberty Mutual Insurance Co., 154 Ill. 2d 90, 108-09, 607 N.E.2d 1204 (1992). The determination of whether certain language is
ambiguous rests upon whether it is susceptible to more than one
reasonable interpretation. Bruder v. Country Mutual Insurance
Co., 156 Ill. 2d 179, 620 N.E.2d 355 (1993).
We start our analysis by looking at the pivotal term
"pollutant." As noted previously, the policy defines "pollutant"
as an "irritant" or "contaminant." These terms were examined by
the seventh circuit in Pipefitters Welfare Educational Fund v.
Westchester Fire Insurance Co., 976 F.2d 1037 (7th Cir. 1992).
There, the court cogently stated:
"The terms 'irritant' and 'contaminant,' when viewed in
isolation, are virtually boundless, for 'there is
virtually no substance or chemical in existence that
would not irritate or damage some person or property.'
[Citation.] Without some limiting principle, the
pollution exclusion clause would extend far beyond its
intended scope, and lead to some absurd results."
Pipefitters, 976 F.2d at 1043.
It is with the recognition of this concept that we undertake our
analysis of the present case. We will not undertake to view the
terms in isolation, but in the context of the facts of the
present case. In other words, we need to determine whether the
lead-based paint, under the circumstances of this case, is a
"contaminant" or "irritant." As there is nothing before us to
indicate that lead "irritates" or that it is generally considered
to be an "irritant," our focus will be on the word "contaminant."
Courts in other jurisdictions, under varying analyses, have
found that the standard pollution exclusion language at issue
here does not preclude coverage for injuries arising out of a
minor child's ingestion of lead-based paint. See, e.g., Vance v.
Sukup, 207 Wis. 2d 576, 558 N.W.2d 683 (1996); Cepeda v.
Varveris, __ A.D.2d __, 651 N.Y.S.2d 185 (1996); GA Insurance Co.
v. Naimberg Realty Associates, __ A.D.2d __, 650 N.Y.S.2d 246
(1996); Lefrak Organization, Inc. v. Chubb Custom Insurance Co.,
942 F. Supp. 949 (S.D.N.Y. 1996); Weaver v. Royal Insurance Co.,
140 N.H. 780, 674 A.2d 975 (1996); Sullins v. Allstate Insurance
Co., 340 Md. 503, 667 A.2d 617 (1995); Atlantic Mutual Insurance
Co. v. McFadden, 413 Mass. 90, 595 N.E.2d 762 (1992); General
Accident Insurance Co. v. Idbar Realty Corp., 163 Misc. 2d 809,
622 N.Y.S.2d 417 (N.Y. Sup. Ct. 1994); Generali-U.S. Branch v.
Caribe Realty Corp., 160 Misc. 2d 1056, 612 N.Y.S.2d 296 (N.Y.
Sup. Ct. 1994).
In Sullins v. Allstate Insurance Co., 340 Md. 503, 667 A.2d 617 (1995), the court first determined that, based upon its
definition in the dictionary, a reasonably prudent layperson may
consider lead to be a "contaminant." Sullins, 340 Md. at 511, 667 A.2d at 620. The court then went on, however, to discuss the
insurance industry's intention in creating the pollution
exclusion, noting that the intention was to exclude only
environmental pollution. Thus, the court determined that the
language was ambiguous because a reasonable interpretation of the
term "pollutant" would exclude lead-based paint, which is "a
product used legally and intentionally." Sullins, 340 Md. at 512,
667 A.2d at 623.
Plaintiff here, citing Lapham-Hickey Steel Corp. v.
Protection Mutual Insurance Co., 166 Ill. 2d 520, 655 N.E.2d 842
(1995), correctly notes that Illinois courts should interpret
words in an insurance policy according to their plain, ordinary
and popular meanings. Thus, plaintiff further contends, this
court should not craft a limitation on the scope of the
exclusion, as did the court in Sullins when it interpreted the
exclusion as applying only to environmental pollution or
contamination. Under either analysis, however, we would conclude
that an ambiguity exists and the result of our decision would be
the same.
We do not believe the court in Sullins needed to look beyond
the plain, ordinary and popular meaning to recognize that the
term "contaminant" is susceptible to more than one reasonable
interpretation and thus ambiguous with respect to whether it
encompasses lead-based paint. The Sullins court, in first
determining that a reasonably prudent layperson may consider lead
to be a "contaminant," noted that Webster's Dictionary defines
"contaminant" as "something that contaminates" and "contaminate"
as "to soil, stain, corrupt, or infect by contact or association"
or "make inferior or impure by mixture." Sullins, 340 Md. at
511, 667 A.2d at 620, quoting Webster's Third New International
Dictionary 491 (1981). With respect to whether such a definition
encompasses the lead in the lead-based paint, a reasonably
prudent layperson could conclude, based upon the definition
alone, that it does not. The definition implies that there must
be a contemporaneous association between the contaminating
substance and the time it corrupts the substance, no matter how
toxic, dangerous, or undesirable it might later be determined to
be. Thus, the paint could only have been "contaminated" at the
time the lead was added. We do not believe that a reasonably
prudent layperson would understand that lead-based paint was
contaminated from its time of creation. It was also not later
contaminated since there was no subsequent corruption by lead,
which caused the paint to become contaminated, such as would
occur if lead from pipes corrupted a water supply.
In addition to this first definition of "contaminate"
discussed by the Sullins court, a second definition found in
Webster's Dictionary reinforces our reasoning. Webster's
Dictionary additionally defines "contaminate" as follows: "2: to
render unfit for use by the introduction of unwholesome or
undesirable elements ." (Emphasis
added and omitted.) Websters Third New International Dictionary
491 (1993).
Thus, we conclude that the plain, ordinary, and popular
meaning of "pollutant" leads to the conclusion that a reasonable
interpretation is that it does not include the lead that is
contained in lead-based paint, nor does it include the lead-based
paint that was present on the premises. A common understanding
of a pollutant is a substance that "pollutes" or renders impure a
previously unpolluted object, as when chemical wastes leach into
a clean water supply. Here the lead did not pollute the paint:
it was purposefully incorporated into the paint from the start.
The paint was intentionally applied to the premises. At the
time, the paint was legal. It was considered neither impure nor
unwanted. A literal reading of the term as it is used in the
exclusionary clause at issue supports the interpretation favored
by the defendants. We hold that, as a matter of law, the
standard pollution exclusion found in general liability policies
does not preclude coverage for personal injuries arising out of a
minor's ingestion of lead.
In McFadden, the Massachusetts Supreme Court came to a
similar conclusion using different reasoning. The court, there,
reading the exclusion as a whole, focused upon the terms
"discharge," "dispersal," "release" and "escape" and noted that
these are "terms of art" in environmental law relating to
improper disposal or containment of hazardous waste. McFadden,
413 Mass. 90, 595 N.E.2d 762 (1992). Citing McFadden, among
other similarly decided cases, this court has previously decided
that the pollution exclusion in a commercial landlord's general
liability policy could reasonably be interpreted as applying only
to environmental pollution and thus was ambiguous as to whether
it applied to tenants' claims for injuries from carbon monoxide
emitted from a building's faulty furnace. American States
Insurance Co. v. Koloms, 281 Ill. App. 3d 725, 666 N.E.2d 699
(1996).
We agree with the reasoning of McFadden and Koloms. Thus,
even if we disregard for the moment our analysis of the terms at
issue under the "plain, ordinary and popular meaning" test, there
is a reasonable interpretation of the pollution exclusion clause
other than that it applies to claims for injuries arising out of
the ingestion of lead-based paint - that the clause applies only
to claims for injuries arising out of environmental pollution.
Thus, the provision is ambiguous and the ambiguity is resolved in
favor of the insured.
Plaintiff urges this court to ignore the Koloms decision and
argues that the court there improperly grafted the "environmental
pollution" limitation onto the exclusion, thus ignoring
fundamental Illinois coverage doctrines. Plaintiff argues that,
by its written terms, which is the only language plaintiff
asserts this court should consider, the exclusion is not limited
to "environmental contamination." We disagree. "What at first
blush might appear unambiguous in the insurance contract might
not be such in the particular factual setting in which the
contract was issued." Glidden v. Farmers Automobile Insurance
Ass'n., 57 Ill. 2d 330, 336, 312 N.E.2d 247, 250 (1974).
"A contract is properly found ambiguous 'when the language
used is susceptible to more than one meaning [citation] or is
obscure in meaning through indefiniteness of expression
[citation].' [Citation.] If the court determines that the
contract is ambiguous, parol evidence may be considered by the
trier of fact in determining the parties' intent. [Citation.] A
contract is binding and enforceable only if its material terms
are definite and certain. [Citation.]" Meyer v. Marilyn Miglin,
Inc., 273 Ill. App. 3d 882, 888-89, 652 N.E.2d 1233, 1238 (1995).
Here, we have already determined that at least one of the
material terms, "contaminant," was not definite or certain.
Thus, we believe it appropriate to use the "provisional approach"
here, which views the language of the document from the
perspective of the parties at the time of its execution.
This court, recognizing the split of authority in Illinois
courts on the "provisional approach," nevertheless has
acknowledged its soundness because " '[t]he meaning of words
cannot be ascertained in a vacuum.' [Citation.]" Meyer, 273 Ill.
App. 3d at 889, 652 N.E.2d at 1238; see also Dungey v. Haines &
Britton, Ltd., 155 Ill. 2d 329, 336, 614 N.E.2d 1205, 1209
(1993)(in determining whether an ambiguity exists in an insurance
contract, the court should consider the subject matter of the
contract, the facts surrounding its execution, the situation of
the parties and the predominate purpose of the contract, which is
to indemnify the insured).
We therefore conclude that the words in the policy here are
susceptible to more than one reasonable interpretation; thus,
they are ambiguous and will be construed in favor of the insured.
The underlying suit does not arise from the discharge, dispersal,
release or escape of a "pollutant." As such, the pollution
exclusion does not preclude coverage under the insurance policy.
Our decision is not based solely upon the "reasonable
expectations" doctrine, but also on a reasonable interpretation
of the plain, ordinary and popular meanings of the terms in the
policy.
Accordingly, we conclude that the trial court erred in
granting plaintiff's motion for summary judgment. This case is
reversed and remanded for further proceedings consistent with
this decision.
Reversed and remanded.
CAMPBELL, P.J., and BUCKLEY, J., concur.

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