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Court of Appeal, Fifth District, California.

Bill BUJULIAN et al., Plaintiffs and Appellants, v. COMMERCIAL UNION INSURANCE COMPANY, Defendant and Respondent.

No. F021539.

Decided: June 13, 1995

George M. Vlazakis and Yvonne Floutsis, San Francisco, CA, for Plaintiffs and Appellants. Greve, Clifford, Wengel & Paras, Edward T. Clifford and Craig L. Scott, Sacramento, for Defendant and Respondent.


Bill Bujulian and Harry Bujulian “dba Bujulian Bros., Inc.,” (Bujulians) owned property at 301 M Street in Dinuba, California.   For approximately a decade ending in 1984, the Bujulians leased the property to various electronic manufacturing companies.   Sequoia Engineering (Sequoia) leased the property from 1980 to 1981.   Respondent, Commercial Union Insurance Company (Commercial Union), provided insurance to Sequoia from January 15, 1980, through January 1, 1981.

On March 27, 1987, the Bujulians, and others, were issued a remedial action order by the California Department of Health Services (Department) demanding that the Bujulians take specific steps to clean up pollution and contamination on their property.   Sequoia was listed as a potentially responsible party in a “Site Assessment and Investigative Report” issued in April of 1987.

In November 1991, the Bujulians filed a complaint against Commercial Union.   They, claiming to be “The Insureds” under the policy, sought coverage under Sequoia's policy alleging causes of action for declaratory relief, breach of insurance contract and breach of covenant.   On April 1, 1992, Commercial Union answered the complaint alleging numerous affirmative defenses.   Among the affirmative defenses claimed by Commercial Union were that the claims were barred by various applicable statutes of limitations, the “occurrence” claimed by the Bujulians did not occur within the policy period, there was a pollution exclusion barring recovery under the policy, the Bujulians' claims were barred by the doctrines of waiver and estoppel, and the Bujulians had not paid a judgment or settlement that had been rendered against them in any underlying claim, action or lawsuit described in the complaint and therefore no right to indemnity existed.

On January 14, 1994, Commercial Union filed a motion for summary judgment.   In the motion Commercial Union claimed that the Bujulians did not qualify as insureds under the policy, there was no pending suit against the Bujulians so as to trigger a duty of defense, no property damage occurred during the policy period, the owned property exclusion of the policy applied, the pollution exclusion to the policy applied, the Bujulians failed to file their action on the policy within one year of the date of loss, and Commercial Union was not obligated to indemnify the Bujulians.

On February 25, 1994, the trial court granted Commercial Union's motion for summary judgment.   The trial court found the Bujulians were not insureds under the policy, no property damage was manifested during the policy period, the pollution exclusion applied, the owned property exclusion applied, there was no property damage within the policy period, and the Bujulians failed to bring suit against respondent within one year of the date of loss as required by the policy.   The trial court's order was reduced to judgment and filed on April 4, 1994.   Notice of entry of judgment was given on April 7, 1994.   The Bujulians filed a timely notice of appeal on May 4, 1994.


Bujulians are the owners of commercial real property located in Dinuba, California.   The site was leased to and used at various times by five different electronic manufacturing companies between 1975 and 1984.   Bujulians leased the property to Sequoia from 1980 to 1981.

The lease agreement contained a clause that required Sequoia to secure public liability and property damage insurance for the joint and several protection and indemnity of both landlord and tenant.   Sequoia obtained a comprehensive general liability policy from Commercial Union for the leased premises.   Sequoia was the named insured in the policy, and the Bujulians were listed as “mortgagees.”   Notwithstanding such designation, there is nothing in the record to indicate the Bujulians were “mortgagees” within the policy's mortgage clause.

In 1984, the property was leased to an entity not part of this litigation, Flex Multilayer.   In February 1984, a local police officer noticed leaking storage drums onsite and notified the fire department.   City inspections revealed code violations in addition to the hazardous substances stored on the property.   The Environmental Protection Agency (EPA) was notified and it, in turn, notified the Department of the hazardous waste site.   Representatives from the EPA, the Department and local government inspected the site in August 1984.   The Department and local government repeatedly asked Flex Multilayer to remove the waste from the premises, but they did not comply for over half a year.   In October 1984, the company ceased operations.   Removal of the wastes commenced in February 1985.

The Department initiated a phased site assessment investigation in June 1986.   The final report, including conclusions and recommendations for an immediate investigation and remedial action, was submitted in April 1987.   Remedial action alternatives for the site were evaluated for their cost effectiveness as well as feasibility for implementation.   In early July of 1988, a remedial action plan (RAP) was approved by the Department and implemented by a private contractor.

The entire population of Dinuba (11,095 people by 1986 figures) resided within 1 to 1.5 miles of the site.   Various chemicals, including copper, lead, nickel, various acids, potassium cyanide and strong bases had been documented as being on the site.   Not only were the chemicals stored in leaking drums, some chemicals had been dumped into a neutralization sump and subsequently discharged into the city sewer system.   The Site Assessment Investigation Report which had been issued in April 1987 listed several potentially responsible parties, including the Bujulians, Flex Multilayer, Addex Corporation, Latronic, Electro-Form, and Sequoia.

The remedial action plan for the Bujulians' property was approved by the Department.   It was implemented by the firm of Metcalf & Eddy in early July of 1988.   Attachment I of the California Site Remedial Action Certification form filed by the Department listed the following responsible parties:  (1) Messrs. Bill and Harry Bujulian, (2) Mr. Zane D. Warner, (3) Mr. Thomas Gwin, and (4) Addax Corporation (Flex Multilayer).   Sequoia was not listed as a responsible party in the report.

The certification form noted that the site was used by five electronic manufacturing companies between 1976 and 1984.   Former occupants left wastes onsite.   Pictures of the site showed drums in an advanced state of deterioration.   Some barrels of wastes had deteriorated so badly that they fell apart when touched.

In the instant action, the Bujulians alleged, without specifying a specific amount, that they and the State of California incurred costs in cleaning up the property.   They seek compensation for the costs of cleanup.

Work on the site consisted of the removal of contaminated flooring and grossly contaminated equipment.   There was also extensive soil contamination around the building site.   Approximately 300 drums of liquid waste were removed along with 3,000 gallons of liquid from 50 plating baths during the initial removal action in early 1985.   During phase one, in July 1988, 2,800 yards of solid waste consisting of soil, equipment, assorted chemicals, debris, 20 drums of mixed chemical waste, and 1,000 gallons of liquid were removed from the site.   During phase two, between March and May 1991, six yards and two drums of contaminated soil and sand were removed from the site along with approximately 20 yards of noncontaminated sand and concrete flooring.   An estimated 2,500 to 3,000 tons of waste were removed from the site.

Commercial Union filed a summary judgment motion claiming, inter alia, that any pollution that occurred did not occur within the applicable policy period, that the Bujulians were not named insureds on the policy, and various exclusions written in the policy applied which would deny the Bujulians recovery.   Though the Bujulians challenge each basis for the trial court's decision in granting summary judgment, the policy exclusion concerning pollution is dispositive.

The Bujulians contend that a “finding in favor of Appellants on any one of the above grounds requires that the trial court's judgment be reversed.”   This statement of the law is incorrect.   Where a policy exclusion is not ambiguous, that exclusion can dispose of an entire action.   Such an exclusion acts in effect as a complete bar to any recovery under an insurance policy.  (See Reagen's Vacuum Truck Service, Inc. v. Beaver Ins. Co. (1994) 31 Cal.App.4th 375, 386-390;  Stewart v. Estate of Bohnert (1980) 101 Cal.App.3d 978 988-990.)   Thus, this court can analyze the policy in question to determine whether the pollution exclusion acts as an absolute bar to recovery by the Bujulians.   We conclude it does and thus we find it unnecessary to discuss any other issues raised by appellants.


A. Standard of Review

Summary judgment is proper if the supporting papers are sufficient to sustain a judgment in favor of the moving party as a matter of law and the opposing party presents no evidence giving rise to a triable issue of any material fact.  (Code Civ.Proc., § 437c, subdivision (c).   To prevail on a summary judgment motion, a defendant must conclusively negate a necessary element of the plaintiff's case or establish a complete defense.  (Horseman's Benevolent & Protective Assn. v. Insurance Co. of North America (1990) 222 Cal.App.3d 816, 820.)   Obviously one complete defense is sufficient to defeat an action notwithstanding the merit of any other alleged defenses.

Where the evidence presented by the defendant does not support judgment in his favor, the motion must be denied without looking at the opposing evidence, if any, submitted by a plaintiff.  (Albertini v. Schaefer (1979) 97 Cal.App.3d 822, 831.)   The evidence of the moving party is strictly construed and that of the opposing party is liberally construed.  (Coppola v. Superior Court (1989) 211 Cal.App.3d 848, 862.)   If the papers submitted show that there is no triable issue as to any material fact and the moving party is entitled to judgment as a matter of law, the motion for summary judgment shall be granted.  (Romblasky v. City of Laguna Beach (1989) 213 Cal.App.3d 842, 848.)   In evaluating the correctness of a ruling under Code of Civil Procedure section 473c, appellate courts must independently review the record before the trial court.   Because the grant or denial of such a motion involves pure questions of law, we are required to reassess the legal significance and effect of the papers presented by the parties in connection with the motion.   We apply the same three-step analysis required of the trial court:  (1) identification of the issues framed by the pleadings because it is these allegations to which the motion must be respond;  (2) determination of whether the moving party's showing has established facts which negate the opponent's claim and justify a judgment in the movant's favor;  and (3) determination of whether the opposition demonstrates the existence of a triable, material factual issue.   In practical effect, we assume the role of the trial court and redetermine the merits of the motion.  (Chevron, USA, Inc. v. Superior Court (1992) 4 Cal.App.4th 544, 548-549;  Saldana v. Globe-Weis Systems Co. (1991) 233 Cal.App.3d 1505, 1513-1514.)

With these principles in mind, we proceed to review the issue of the pollution exclusion.

B. Pollution exclusion

The Commercial Union policy issued to Sequoia contained a standard pollution exclusion.   The exclusion is set forth in the policy as follows:


“This insurance does not apply:


“(f) to bodily injury or property damage arising out of the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any water course or body of water;  but this exclusion does not apply if such discharge, dispersal, release or escape is sudden and accidental;  ․”

The pollution exclusion is comprehensive in its scope, covering all forms of pollution.1  Recent California Courts of Appeal decisions have analyzed this standard pollution exclusion and concluded that it bars recovery where its terms apply.   The issue, usually framed by the party seeking coverage notwithstanding the exclusion, concerns the exception to the exclusion stating that the “exclusion does not apply if such discharge, dispersal, release or escape is sudden and accidental.”  (Emphasis added.)

The Bujulians, following suit, seek to bring themselves within the exception making the conclusional argument that “[i]n plaintiffs' case, the discharge of chemical waste did not occur overnight but was a continuous release of toxic waste.   However, given the nature of the contamination, the release was still ‘sudden and accidental’ and does not fall under the pollution exclusion.”

In Shell Oil Co. v. Winterthur Swiss Ins. Co. (1993) 12 Cal.App.4th 715, the issue of pollution involved leased portions of the Rocky Mountain Arsenal, a United States Army complex in Colorado covering approximately 28 square miles near Denver.  (Id. at p. 730.)   Pollution contamination was extensive.   (Id. at pp. 732-734.)   The Shell Oil court carefully analyzed the terms “sudden” and “accidental.”   The Shell Oil court first found that the terms “sudden” and “accidental” had to be analyzed together, not separately.  (Id. at pp. 751-752.)

The Shell Oil court noted that the issue concerning what constituted a sudden event “is the subject of substantial judicial disagreement across the country.”  (12 Cal.App.4th at p. 752.)   The Shell Oil court found that its interpretation was governed by two basic rules of contract construction:  (1) that the policy language be interpreted in its ordinary and popular sense unless the parties expressed a contrary intent, and (2) that the whole of the contract must be read together to give every part effect, if reasonably practicable.  (Id. at p. 753.)

In analyzing what the terms “sudden” and “accidental” meant, the Shell Oil court reasoned that the terms were not ambiguous and that they had to be read together.   Also, for the exception to the pollution exclusion to apply, there had to be an abrupt or sudden accident causing pollution to escape.   The Shell Oil court's reasoning was as follows:

“Certainly, one aspect of the meaning of ‘sudden’ is ‘unexpected.’   But saying that ‘sudden’ means ‘unexpected,’ and nothing more, strips the word of a significant facet of its ordinary meaning.   Sudden events derive an ‘unexpected’ quality both from being unforeseen and from having a comparatively quick onset.   We cannot reasonably call ‘sudden’ a process that occurs slowly and incrementally over a relatively long time, no matter how unexpected or unintended the process.   A ‘discharge, dispersal, release or escape’ of pollutants that happens gradually and continuously for years is not ‘sudden’ in the ordinary and popular sense of the word.  [Citation.]  Thus, ‘sudden’ necessarily contains a temporal element in addition to its connotation of the unexpected.

“This approach also avoids making ‘sudden’ and ‘accidental’ redundant.   Dictionaries define as ‘accidental’ unexpected and unintended events.   California law also equates ‘accident’ with unexpected and unintended events.   [Citations.]

“An ‘accidental’ event is both unintended and unexpected;  omitting either leaves an important part of the word's meaning unexpressed.   A ‘discharge, dispersal, release or escape’ of pollutants that is expected is not accidental, regardless of whether it was not intended.   Therefore, in the phrase, ‘sudden and accidental,’ ‘accidental’ conveys the sense of an unexpected and unintended event, while ‘sudden’ conveys the sense of an unexpected event that is abrupt or immediate in nature.  ‘Sudden and accidental’ is not ambiguous if we give the words their full significance.   A court should not make a phrase ambiguous by unreasonably truncating a word's meaning.

“Of the many diverse opinions on the meaning of ‘sudden,’ we find the better reasoned decisions are exemplified by Lumbermens Mut. Cas. v. Belleville Ind., supra, 555 N.E.2d 568, and U.S. Fidelity and Guar. v. Star Fire Coals, Inc. (6th Cir.1988) 856 F.2d 31.   The Massachusetts high court stated:  ‘For the word “sudden” to have any significant purpose, and not to be surplusage when used generally in conjunction with the word “accidental,” it must have a temporal aspect to its meaning, and not just the sense of something unexpected․  The issue is whether the release was sudden.   The alternative is that it was gradual․  [¶] ․ If the word “sudden” is to have any meaning or value in the exception to the pollution exclusion clause, only an abrupt discharge or release of pollutants falls within the exception.  [¶] ․ Surely, the abruptness of the commencement of the release or discharge of the pollutant is the crucial element.’  (Lumbermens, supra, at p. 572, fns. omitted.)   The Sixth Circuit focused on plain meaning:  ‘We believe the everyday meaning of the term “sudden” is exactly what this clause means.   We do not believe that it is possible to define “sudden” without reference to a temporal element that joins together conceptually the immediate and unexpected.’  (U.S. Fidelity and Guar., supra, at p. 34.)   Or, as one of Shell's brokers said, ‘I can't think of a better description of “sudden” than sudden, something that happens at a precise point in time.’  (Cf. Geddes, supra, 51 Cal.2d at p. 564.)”   (12 Cal.App.4th at pp. 754-756, fns. omitted.)

The Shell Oil court acknowledged that a sudden and accidental discharge of pollution could occur abruptly but not be noticed for some period of time.   Under such a circumstance, liability would still attach to the insurance company.   The Shell Oil court analyzed this problem as follows:

“We also agree with Lumbermens that ‘sudden’ refers to the pollution's commencement and does not require that the polluting event terminate quickly or have only a brief duration.  (Lumbermens Mut. Cas. v. Belleville Ind., supra, 555 N.E.2d at p. 572, fn. 6 and accompanying text.)   If a sudden and accidental discharge continues for a long time, at some point it ceases to be sudden or accidental.  (Ibid.;  see Liberty Mut. Ins. v. SCA Services (1992) 412 Mass. 330․)  Still, a sudden and accidental discharge of a dangerous pollutant could continue unabated for some period because of a negligent failure to discover it, technical problems or a lack of resources that delay curtailment, or some other circumstance.   Liability from such an event could well be covered.”  (12 Cal.App.4th at p. 756.)

Commercial Union clearly had the burden of initially factually showing the existence of the pollution exclusion and that the claimed injury or damage arose out of the “discharge, dispersal, release or escape of ․ acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, ․”  It clearly did so here.   There is further proof that the pollution occurred continuously over time between 1976 and 1984.   Barrels of pollutants were in an advanced state of deterioration, some falling apart when touched.   Thus, Commercial Union not only showed in its moving papers that appellants' claim was related to pollution, but that the pollution occurred continuously over time.

Both of these showings are conceded by appellants on appeal and were conceded by them in their brief before the trial court.   Appellants' concessions are important because Commercial Union may rely upon the admissions contained in the pleadings of an adversary to support its motion for summary judgment.  (Lewis v. Arboles Dev. Co. (1970) 8 Cal.App.3d 812, 817.)   Appellants nevertheless contend that the continuous pollution occurred suddenly and accidentally.   We find, however, that this conclusory contention is insufficient as a matter of law to overcome Commercial Union's motion for summary judgment.

Commercial Union met its burden of proof to show that its affirmative defense, the pollution exclusion, acted as a complete bar to appellants' recovery.   Once Commercial Union demonstrated the continuous nature of the pollution event, it provided evidence as well that the exception to the exclusion did not apply.   This is so because the exception to the exclusion applies only to sudden and accidental events.

The burden of proof then shifted to appellants to set forth evidence that the exception to the pollution exclusion did apply.2  To do this appellants needed to show that though the pollution was continuous it was precipitated by a sudden, accidental event and continued until later discovery.   Appellants failed to set forth any such facts.   Appellants' failure to counter Commercial Union's defense with contrary evidence leaves the exclusion factually unchallenged with any evidence that the exception to the exclusion applies to this case.

Without any such evidence before it on the issue of the applicability of the exception, the trial court correctly concluded there was evidentiary support for respondent's claim that the exception to the exclusion did not apply here.   Accordingly, the trial court was correct in entering summary judgment on behalf of respondent.

From the record available to this court, it appears that the pollution involved in the instant action was either the result of willful conduct, corrosion or both.   Willful conduct is not covered by policies of insurance as a matter of public policy in the State of California under Insurance Code section 533.  (See Reagen's Vacuum Truck Service, Inc. v. Beaver Insurance Co., supra, 31 Cal.App.4th 375, 386-388.)   Corrosion, by definition is a gradual process.   A release of pollution resulting from corrosion is not sudden nor accidental.  (ACL Technologies, Inc. v. Northbrook Property & Casualty Ins. Co. (1993) 17 Cal.App.4th 1773, 1795.)  “․ [W]here there is no evidence of any traumatic release during the policy period, and substantial evidence of release from gradual corrosion, it is reasonably obvious that an insurer has carried any burden it might have to show the applicability of the pollution exclusion.”  (Ibid.)

In Truck Ins. Exchange v. Pozzuoli (1993) 17 Cal.App.4th 856, 860-861, it was noted that the exception to the pollution exclusion occurs in the case of a sudden accident.   The classical accident envisioned by the drafter as being “sudden” is an explosion.   Where the pollution process is both continuous and long term, insureds cannot reasonably expect coverage for an event which is expressly excluded from the policy.  (Ibid.)

The pollution exclusion thus provides Commercial Union with an absolute defense to the instant action.   The Bujulians have failed to produce any evidence to show that the events leading to the contamination and pollution of their property were sudden and accidental.   An insurer is entitled to judgment as a matter of law where, as here, an exclusion is not ambiguous and applies to the facts of the case.  (Reagen's Vacuum Truck Service, Inc. v. Beaver Ins. Co., supra, 31 Cal.App.4th 375, 386-389;  Stewart v. Estate of Bohnert, supra, 101 Cal.App.3d 978, 986-990.) 3  The trial court properly entered summary judgment against the Bujulians.


The judgment is affirmed.   Respondent shall recover its costs on appeal.


1.   In addition to the pollution exclusion written into Commercial Union's policy, there is also an exclusion set forth in the policy that discusses property not covered.   Also not covered by the Commercial Union policy is the cost of excavation, grading or filling and foundations of buildings.

2.   The pollution exclusion is avoided, for example, where the precipitating event causing the pollution is a sudden, accidental event such as an earthquake or an explosion.  (Bryan Chuchua's Jeep, Inc. v. Farmers Ins. Group (1992) 10 Cal.App.4th 1579, 1581-1583 [earthquake];  Pepper Industries, Inc. v. Home Ins. Co. (1977) 67 Cal.App.3d 1012, 1018-1019 [explosion].)

3.   In a different portion of the Bujulians' brief, they argue that they are entitled to application of the so-called continuous injury theory to their case.   According to this theory, if the injury is continuous or progressive throughout successive policy periods, coverage is triggered under the policies in effect for all periods.   The theory has been applied to asbestosis and hazardous waste cases.   This theory, however, applies to the issue of when pollution is discovered.   In Prudential-LMI Com. Ins. v. Superior Court (1990) 51 Cal.3d 674, at 699, the California Supreme Court adopted the manifestation trigger in first party cases.   In adopting the manifestation trigger of coverage, the Supreme Court reasoned that the rule not only promotes greater certainty in the insurance industry and leads to lower insurance costs, but also satisfies the reasonable expectations of insureds.   Under the factual and procedural posture of this case, however, we need not reach the issue of when the pollution was discovered because the pollution exclusion is an absolute bar to the Bujulians' recovery.

HARRIS, Associate Justice.

MARTIN, Acting P.J., and DIBIASO, J., concur.