Annotate this Case

2002 OK 34
55 P.3d 1030
Case Number: 95971
Decided: 04/30/2002


[55 P.3d 1030]



¶0 Bituminous Casualty Corp. [Bituminous] sought declaratory relief in the United States District Court for the Northern District of Oklahoma to delimit its liability under the terms of a commercial general liability insurance policy issued to Cowen Construction, Inc. [Cowen or defendant]. St. John Medical Center [hospital] (in a state-district-court action earlier brought against itself) filed a third-party petition alleging that Cowen negligently constructed a kidney dialysis unit which caused eight patients who were treated there to incur lead poisoning. Hospital's insurer notified Bituminous that in the event the patients prevailed against hospital, it would seek indemnity from Bituminous. Pursuant to the provisions of


Robert N. Naifeh, Jr. of Derryberry Quigley Solomon Blankenship & Naifeh, Oklahoma City, Oklahoma, for the plaintiff.
Alan Wayne Gentges of Scott & Gentges, Tulsa, Oklahoma, for the defendant, Cowen Construction, Inc.
Michael J. Heron, Mary Beth Hanan and Patrick R. B. Sherry of Johnson Hanan & Heron, Oklahoma City, Oklahoma, for the defendant, Hospital Casualty Co.

Lavender, J.

¶1 Pursuant to the Uniform Certification of Questions of Law Act,

1. Under Oklahoma law, what is the proper "trigger of coverage" theory to determine the applicability of a commercial general liability policy

2. Under Oklahoma law, is the scope of the total pollution exclusion of a com-[55 P.3d 1031] mercial general liability policy limited to "environmental pollution?"

¶2 Since the language used in the insurance contract (in issue) is in itself clear and unambiguous insofar as it addresses coverage for "property damage" and "bodily injuries" occasioned by "pollutants," it will be given its plain and ordinary meaning. The second certified question is answered in the negative. Because our response to the second query disposes of the case, we decline to answer the first certified question. The Court will answer only those certified questions which are "determinative" of a cause.



¶3 St. John Medical Center [hospital] contracted with Cowen Construction, Inc.[Cowen] to build a kidney dialysis center in Tulsa, Oklahoma. Cowen completed the contracted-for dialysis center in November 1993. In October 1996 eight patients

¶6 In February 2000 Hospital Casualty Company [HCC], hospital's insurer, placed Bituminous and CNA on notice that it would seek indemnity from them if it had to pay on hospital's behalf for the patient/plaintiffs' alleged injuries. [Only USF&G had agreed to defend Cowen against hospital's claims.] After receipt of HCC's notice Bituminous sought declaratory relief in the United States District Court for the Northern District of Oklahoma to determine whether it had any contractual obligation to either defend or indemnify Cowen in the third-party action.



¶7 Because the case from which the certified question emanates is not before us for resolution, we refrain (1) from applying the declared state-law response to the facts elicited in the federal-court litigation and (2) from passing upon the effect of federal procedure on the issues, facts and proof in the case. We have briefly outlined the case's factual underpinnings to place the certified questions in a proper perspective. It is for the United States District Court for the Northern District of Oklahoma to analyze our answer's impact on the case and facts ultimately before it.



¶8 The posited certified questions call for the Court to ascertain the meaning of certain terms found in general liability insurance policies/contracts10 between Bituminous (insurer) and Cowen (insured). It is settled under Oklahoma's extant jurisprudence that ascertaining whether the terms of an insurance policy are ambiguous is for the Court to determine as a matter of law.11

Every insurance contract shall be construed according to the entirety of its terms and conditions set forth in the policy and as amplified, extended, or modified by any rider, endorsement, or application attached to and made a part of the policy.[55 P.3d 1033]

¶10 We begin by noting that today's case does not mark the first time the Court has considered the scope of a "pollution exclusion clause" in a comprehensive GCL insurance policy. The Court in Kerr McGee Corp. v. Admiral Ins. Co.

¶11 The primary focus of our analysis is construction of the following exclusion-from-coverage found in a special endorsement to the Bituminous/Cowen GCL policy:

(1) Bodily injury or property damage arising out of the actual, alleged or threatened discharge, dispersal, release or escape of pollutants.

¶12 The Court is required in its construction of the policy's terms to give effect to the entire contract. Our review discloses no observable ambiguity in the exclusion's language found on the insurance policy's face. Giving the language used in the pollution-exclusion clause as stated in the special endorsement its plain and ordinary meaning evinces an exclusion of coverage for bodily injury or property damage caused by a pollutant's release. Nowhere in the policy's lexicon is there language employed which would sustain finding as suggested by the insured the pollution exclusion clause only excluded from coverage that bodily injury and/or property damage which occurred when the general "environment" was damaged by the insured's acts. An insured cannot insist upon a strained construction of relevant policy language in order to claim a patent ambiguity exists nor can it contradict the written instrument's plain terms under the guise of a latent ambiguity.

¶13 The general import of the GCL insurance policy's original pollution-exclusion-clause see policy paragraph "2. Exclusions (a) & (f)(1) a-d"



¶15 The Court is aware that many jurisdictions have considered the issue encompassed in the certified question answered today and that there is a wide divergence of opinion as to how it should be resolved. In most of the jurisprudence suggested by the parties the issue came to the court construing the policy's terms in the context of extended litigation with well-defined records of the pollution-exclusion-clause's history before relevant state regulatory bodies. Such is not the context within which we have considered the contested policy's text today. The certified question in the federal declaratory action presented to us is bare of any evidence of the parties' intent other than as embodied in the language used in the policy and further is devoid of any factual record relative to approval of the policy's language by the Oklahoma State Insurance Commissioner. Hence, we have considered the insurance provision in issue by analysis focused upon the language employed by the parties in their contract.

¶16 The utilized terminology in the Bituminous/Cowen GCL policy is straightforward and not fairly susceptible to multiple meanings. Hence, we have given the policy's language its plain and ordinary meaning. The exclusion (here in issue) was not made obscure by being hidden deep within the bowels of a long insurance contract but rather is clearly identified for what it is a special endorsement changing the scope and language of an earlier contractual provision. The Wisconsin Supreme Court's admonition in Peace v. Northwestern Nat'l Ins. Co., 596 N.W.2d 429, 441, is particularly relevant. There the court in construing a "pollution exclusion clause" observed: "Courts must not torture the policy language in order to 'create ambiguities where none exist.'" [quoting Kaytes v. Imperial Casualty & Indem. Co., 1994 WL 780901 (E.D.Pa. 1994)] The contractual language identified in the certifying court's second query i.e., the special endorsement's pollution-exclusion-clause excludes from coverage all damage occasioned by the "discharge, dispersal, release or escape of pollutants" which causes "bodily injury" or "property damage." It is not limited in its scope to "environmental pollution." [55 P.3d 1035]



¶18 KAUGER, J., concurs in part; dissents in part.

¶19 WATT, V.C.J. and SUMMERS, J., dissent.

[55 P.3d 1036]


1Today's answers are limited to construction of the specific language of the policy or policies at issue in the federal declaratory-relief action pending before the certifying court. The relevant policy provisions are as follows:

1. Insuring Agreement.

a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or " property damage" to which this insurance applies. We will have the right and duty to defend any "suit" seeking those damages. We may at our discretion investigate any "occurrence" and settle any claim or "suit" that may result. . . . .

* * *

b. This insurance applies to "bodily injury" and "property damage" only if:

* * *

(2) The "bodily injury" or "property damage" occurs during the policy period.

2. Exclusions.

This insurance does not apply to:

a. "Bodily injury" or "property damage" expected or intended from the standpoint of the insured. . . .

* * *

f. (1) "Bodily injury" or "property damage" arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants:

(a) At or from any premises, site or location which is or was at the time owned or occupied by, or rented or loaned to, any insured;

(b) At or from any premises, site or location which is or was at any time used by or for any insured or others for the handling, storage, disposal, processing or treatment of waste;

(c) Which are or were at any time transported, handled, stored, treated, disposed of, or processed as waste by or for any insured or any person or organization for whom you may be legally responsible; or

(d) At or from any premises, site or location on which any insured or any contractors or subcontractors working directly or indirectly on any insured's behalf are performing operations:

(i) if the pollutants are brought on or to the premises, site or location in connection with such operations by such insured, contractor or subcontractor;


(ii) if the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of pollutants.

* * *


* * *

3. "Bodily injury" means bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.

* * *

9. "Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions.



It is agreed that the exclusion relating to the actual, alleged or threatened discharge, dispersal, release or escape of pollutants is replaced by the following:

(1) Bodily injury or property damage arising out of the actual, alleged or threatened discharge, dispersal, release or escape of pollutants.

(2) Any loss, cost or expense arising out of any governmental direction or request that the named insured test for, monitor, clean up, remove, contain, treat, detoxify or neutralize pollutants.

Subparagraph (1) above does not apply to bodily injury or property damage caused by heat, smoke or fumes from a hostile fire. As used in this exclusion, a hostile fire means one which becomes uncontrollable, or breaks out from where it was intended to be.

Pollutants means 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.

2See 20 O.S.1991 § 1602, whose pertinent terms provide:

The Supreme Court . . . may answer questions certified to it . . . when requested by the certifying court if there are involved in the proceeding before it questions of law of this state which may be determinative of the cause then pending in the certifying court . . . . [Emphasis added.]

3See Atlantic Richfield Co. v. Tomlinson, 1993 OK 106, 859 P.2d 1088, 1094. We note that other courts have declined to answer certified questions which are not determinative of the cause before the certifying court. See Greene v. Massey, 384 So. 2d 24 (Fla. 1980)(declined to answer certified question because Court's response would not be determinative of the cause); Grant Creek Water Works, Ltd. v. Commissioner of Int. Rev., 775 P.2d 684 (Mont. 1988)(answering issue presented would not control outcome of litigation).

4The record indicates that four of the patient/plaintiffs began their initial dialysis treatment before May 1, 1994 while four others started after that date.

5None of the parties in today's case dispute that lead is a pollutant.

6See Gayenell Woodbridge v. St. John Medical Center, Inc., Case No. CJ-98-3032, in the District Court of Tulsa County, State of Oklahoma.

7It is alleged that Cowen failed to install a goose-necked vent pipe from B-bath and that lead flashing placed in the installed straight vent pipe allowed steam from the bath to interact with the flashing resulting in lead percolating back into the affected dialysis unit.

8In answering the second certified question the Court does not address whether the insurance coverage issued by Bituminous to Cowen extends to the repair of construction defects, if any, in the dialysis unit built by the insured. That issue's resolution is left to the certifying court. Today's answer only addresses coverage for damages occasioned by the pollutants themselves. It does not address coverage for property damage caused by a contractor's failure to comply with building plans.

9Brown v. Ford, 1995 OK 101, 905 P.2d 223, 226.

10 See supra note 1 for the pertinent contract terms.

11 Kerr-McGee v. Admiral Insurance Co., 1995 OK 102, 905 P.2d 760, 762; Dodson v. St. Paul Ins. Co., 1991 OK 24, 812 P.2d 372, 376 (1991).

12 Phillips v. Estate of Greenfield, 1993 OK 110, 859 P.2d 1101, 1104. See also the terms of 15 O.S.1991 § 154, which provide:

The language of a contract is to govern its interpretation, if the language is clear and explicit and does not involve an absurdity.

13 American Ironworks & Machine Works Co., Inc. v. Insurance Company of North America, 1962 OK 197, 375 P.2d 873, 2nd syl.; Torres v. Sentry Insurance, 1976 OK 195, 558 P.2d 400, 401.

14 Max True Plastering Co. v. U.S. Fidelity & Guaranty Co., 1996 OK 28, 912 P.2d 861, 869.

15 15 O.S.1991 § 157, whose pertinent terms provide:

The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the others.

16 Supra note 11. The Court's attention is drawn to this jurisprudence by the parties' briefs. However, it appears they focused on the Court's construction of the terms "sudden" and "accidental" without realizing that the Kerr McGee holding would be untenable sans a determination that the entire "pollution exclusion" clause was unambiguous.

17 For the full text of both the policy's stipulated exclusions from coverage and the special endorsement which amends the same, see supra note 1.

18 For the policy's definition of pollutants, see supra note 1 .

19 Druggists' Mut. Fire Ins. Co. of Iowa v. Shaw, 1935 OK 132, 41 P.2d 69, 70.

20 For the pertinent policy language see supra note 1.

21 There is nothing in the record or materials accompanying today's certified questions which would suggest that as in Morton Internat'l, Inc. v. General Accident Inc. Co. of Am., 629 A.2d 831, 852-53 (N.J. 1993) the special endorsement was but a clarification of earlier policy provisions.

22 "Pollutants" is defined in the special endorsement as follows:

Pollutants means 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.

While the parties may differ in the future over whether something is a pollutant or not within this definition's scope, there is no disagreement (in the case before the Court) over whether lead is a pollutant within the policy's definition.


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