BELT PAINTING CORP., Appellant, v. TIG INSURANCE COMPANY, Respondent.
Whether the terms of the absolute pollution exclusion contained in certain contracts of insurance, including the one now under review in this case, should be applied literally so as to exclude coverage even in those cases where the “environment,” as that term is commonly understood, is unaffected by anything which could realistically be defined as “pollution,” is a question which has given rise to extensive litigation. Those courts which have considered this issue have arrived at contrasting conclusions. On this appeal, in accordance with our reading of the decision of the Court of Appeals in Westview Assocs. v. Guaranty Nat. Ins. Co., 95 N.Y.2d 334, 717 N.Y.S.2d 75, 740 N.E.2d 220, we hold that the absolute pollution exclusion contained in the policy under review does not apply so as to exclude coverage in the case of a claimant allegedly injured as the result of the temporary indoor dissemination of paint or paint solvent fumes.
The injured plaintiff in the underlying personal injury action, Joseph Cinquemani, alleges that Belt Painting Corp. (hereinafter Belt), the plaintiff in the present action, is liable to him, and to his wife and co-plaintiff Maria Cinquemani, because of the injuries which he sustained as a result of his inhalation of “noxious and toxic fumes.” On April 26, 1997, Cinquemani allegedly inhaled paint or paint solvent fumes which were produced by Belt's workers during the course of its performance of a subcontract to strip existing paint and repaint certain office space located at Financial Square, 33 Old Slip, New York, N.Y., where Mr. Cinquemani worked.
Belt was covered by a commercial general liability policy issued by the defendant TIG Insurance Company (hereinafter TIG) for the period from June 1, 1996, to July 1, 1997, and it demanded that TIG defend and indemnify it in connection with the Cinquemani action. By letter dated November 9, 1999, TIG denied coverage on the basis of the “total pollution exclusion endorsement” contained in the policy. The present action for declaratory and injunctive relief was commenced on or about June 16, 2000.
By notice of motion dated August 17, 2000, TIG sought summary judgment dismissing Belt's complaint, arguing that it was not obligated to defend or indemnify Belt in connection with the underlying action based on the terms of the “total pollution exclusion endorsement” contained in the relevant policy. TIG relied on various cases, including A-One Oil v. Massachusetts Bay Ins. Co., 250 A.D.2d 633, 672 N.Y.S.2d 423, White v. Freedman, 227 A.D.2d 470, 643 N.Y.S.2d 160, and Demakos v. Travelers Ins. Co., 205 A.D.2d 731, 613 N.Y.S.2d 709. Belt moved for summary judgment in its favor, arguing that the pollution exclusion does not apply. Belt relied on Continental Casualty Co. v. Rapid-American Corporation, 80 N.Y.2d 640, 593 N.Y.S.2d 966, 609 N.E.2d 506 and Karroll v. Atomergic Chemetals Corp., 194 A.D.2d 715, 600 N.Y.S.2d 101, among other cases, and argued that the cases relied upon by TIG, including those noted above, were distinguishable.
The Supreme Court granted TIG's motion, and denied Belt's cross motion. In its order, the Supreme Court stated, “While it may be true that the endorsement applies only to environmental or industrial pollution, it has been held that indoor air contamination, such as in the instant case, can constitute environmental pollution”, citing A-One Oil v. Massachusetts Bay Ins. Co., 250 A.D.2d 633, 672 N.Y.S.2d 423, supra; American Heritage Realty Partnership v. La Voy, 209 A.D.2d 749, 618 N.Y.S.2d 125; Demakos v. Travelers Ins. Co., 205 A.D.2d 731, 613 N.Y.S.2d 709, supra. Although the cases relied upon by the Supreme Court do support the proposition for which they are cited, we believe that subsequent case law, including, most importantly, the decision of the Court of Appeals in Westview Assocs. v. Guaranty Nat. Ins. Co., 95 N.Y.2d 334, 717 N.Y.S.2d 75, 740 N.E.2d 220, supra, point to a different result. We therefore reverse.
Exclusionary provisions in insurance contracts are, in general, to be “accorded a strict and narrow construction” (Seaboard Surety Co. v. Gillette Co., 64 N.Y.2d 304, 311, 486 N.Y.S.2d 873, 476 N.E.2d 272, citing Taylor v. United States Cas. Co., 269 N.Y. 360, 363, 199 N.E. 620; Griffey v. New York Cent. Ins. Co., 100 N.Y. 417, 421, 3 N.E. 309; Rann v. Home Ins. Co., 59 N.Y. 387, 389; see Incorporated Vil. of Cedarhurst v. Hanover Ins. Co., 89 N.Y.2d 293, 298-299, 653 N.Y.S.2d 68, 675 N.E.2d 822; Gaetan v. Firemen's Ins. Co. of Newark, 264 A.D.2d 806, 695 N.Y.S.2d 608). In Incorporated Vil. of Cedarhurst v. Hanover Ins. Co., 89 N.Y.2d 293, 298-299, 653 N.Y.S.2d 68, 675 N.E.2d 822, supra, the Court of Appeals stated that “pollution exclusions do not apply when the complaint does not allege that the discharge complained of actually results in pollution” (citing Technicon Elecs. Corp. v. American Home Assur. Co., 74 N.Y.2d 66, 74, 544 N.Y.S.2d 531, 542 N.E.2d 1048). In this case, although the Cinquemani complaint alleges that personal injuries resulted from the emission of toxic fumes in combination with other factors such as inadequate ventilation, it does not allege that Belt's activities resulted in anything which would ordinarily be described as “pollution.”
The pollution exclusion under review in this case is the type of exclusion which, in numerous cases which have arisen in various jurisdictions, has been described as an “absolute,” or “total” pollution exclusion, as opposed to a “qualified” exclusion, that is, one containing an exception for “sudden and accidental” discharges (see e.g. Northville Ind. Corp. v. National Union Fire Ins. Co. of Pittsburgh, Pa., 89 N.Y.2d 621, 657 N.Y.S.2d 564, 679 N.E.2d 1044; see also American Heritage Realty Partnership v. LaVoy, 209 A.D.2d 749, 618 N.Y.S.2d 125, supra; Roofers' Joint Training, Apprentice, & Educ. Comm. of Western New York v. General Accident Ins. Co. of America, 275 A.D.2d 90, 713 N.Y.S.2d 615; Bechtel Petroleum Operations v. Continental Insurance Company, 96 Cal.App.4th 571, 117 Cal.Rptr.2d 399). It excludes coverage in cases of bodily injury “which would not have occurred in whole or part but for the actual, alleged or threatened discharge, dispersal, seepage, migration, release, or escape of pollutants at any time.” The term “pollutant” is then defined to include “any solid, liquid, gaseous or thermal irritant or contaminant including smoke, vapor, soot, fumes, acid, alkalis, chemicals and waste.”
In Westview Assocs. v. Guaranty Nat. Ins. Co., 95 N.Y.2d 334, 717 N.Y.S.2d 75, 740 N.E.2d 220, supra, the Court of Appeals reviewed the similarly-worded provision of an umbrella policy, in which the term “pollutants” was defined as “ ‘smoke, vapors, soot, fumes, acids, sound, alkalies, chemicals, liquids, solids, gases, thermal “pollutants,” and all other irritants and “Contaminants” ’.” (id. at 340, 717 N.Y.S.2d 75, 740 N.E.2d 220). The Court of Appeals held that this exclusion, which by its literal terms would seem to apply to injuries resulting from exposure to “all irritants” and “all contaminants,” did not apply to exclude coverage in a case where the infant plaintiff in the underlying action claimed to have been injured as the result of the ingestion of lead paint, an injury which was incurred indoors. This holding is consistent with prior decisions of this court holding that the pollution exclusions under review did not apply to eliminate coverage in cases involving ingestion of lead paint (see e.g. Cepeda v. Varveris, 234 A.D.2d 497, 651 N.Y.S.2d 185; GA Ins. Co. of N.Y. v. Naimberg Realty Assocs., 233 A.D.2d 363, 650 N.Y.S.2d 246).
The Westview decision represents a signal that New York will not adhere to a completely literal approach in connection with the application of absolute pollution exclusions, an approach which has been persuasively criticized in several other jurisdictions (see e.g. American States Ins. Co. v. Kiger, 662 N.E.2d 945, 948-949[Ind.] [applied literally, exclusion would bar coverage in case of injury caused by slip and fall on grease spill] ), and which previously has been rejected by this court as well, in favor of the view that such exclusions should apply only in cases of “environmental pollution” (see Karroll v. Atomergic Chemetals Corp., 194 A.D.2d 715, 600 N.Y.S.2d 101, supra; citing Continental Cas. Co. v. Rapid-Am. Corp., 80 N.Y.2d 640, 593 N.Y.S.2d 966, 609 N.E.2d 506, supra; see also Stoney Run Co. v. Prudential-LMI Ins. Co., 47 F.3d 34 [2d Cir.] [New York law]; Republic Franklin Ins. Co. v. L & J Realty Corporation, 280 A.D.2d 351, 720 N.Y.S.2d 473 [1st Dept.]; Cepeda v. Varveris, 234 A.D.2d 497, 651 N.Y.S.2d 185, supra; GA Ins. Co. of New York v. Naimberg Realty Assocs., 233 A.D.2d 363, 650 N.Y.S.2d 246; Miano v. Hehn, 206 A.D.2d 957, 614 N.Y.S.2d 829 [4th Dept.] ).
In Roofers' Joint Training, Apprentice, & Educ. Comm. of Western New York v. General Accident Ins. Co. of America, 275 A.D.2d 90, 713 N.Y.S.2d 615, supra, the Appellate Division, Fourth Department also rejected a literal construction of an absolute pollution exclusion which would have led to the denial of coverage in a case factually similar to the case now under review. In Roofers' Joint Training (supra), the Fourth Department held that an exclusion which was, in relevant part, identical to the one now under review, did not apply in the case of a person claiming to have been injured as a result of the inhalation of toxic fumes which had been released when a roofing membrane was applied with a hot air gun during a classroom demonstration at the insured's premises. Acknowledging that various state and federal courts had “split on this issue,” the Fourth Department held that the better view was that this type of exclusion “applies only to environmental pollution, and not to all contact with substances that can be classified as pollutants” (id. at 93, 713 N.Y.S.2d 615, quoting Stoney Run Co. v. Prudential-LMI Ins. Co., 47 F.3d 34 [2d Cir.], supra; citing Nautilus Ins. Co. v. Jabar, 188 F.3d 27 [1st Cir.][Maine law]; Meridian Mutual Ins. Co. v. Kellman, 197 F.3d 1178 [6th Cir.][Michigan law]; see also Bituminous Casualty Corp. v. Advanced Adhesive Technology, 73 F.3d 335 [11th Cir.][Georgia law]; Minerva Enterprises v. Bituminous Casualty Corp., 312 Ark. 128, 851 S.W.2d 403[Ark.] ).
To the extent that other decisions of this court, including those relied upon by the Supreme Court in this case, support a contrary result (see A-One Oil v. Massachusetts Bay Ins. Co., 250 A.D.2d 633, 672 N.Y.S.2d 423, supra; White v. Freedman, 227 A.D.2d 470, 643 N.Y.S.2d 160, supra; Demakos v. Travelers Ins. Co., 205 A.D.2d 731, 613 N.Y.S.2d 709, supra), we believe that they are no longer valid in light of the Court of Appeals decision in Westview (supra). We are persuaded that the common-sense construction of the terms of the absolute pollution exclusion reflected in the Westview case (supra) and in Roofers' Joint Training, Apprentice, & Educ. Comm. of Western New York v. General Accident Ins. Co. of America, 275 A.D.2d 90, 713 N.Y.S.2d 615, supra is preferable to the literal approach reflected in the earlier cases.
Of course, the exclusion under review in this case, as well as the qualified pollution exclusion (those subject to the “sudden and accidental” exception) still may be properly applied in those cases where the damages alleged are truly environmental in nature, or where the underlying complaint alleges damages resulting from what can accurately be described as the pollution of the environment (see e.g. Town of Harrison v. National Union Fire Ins. Co. of Pittsburgh, Pa., 89 N.Y.2d 308, 653 N.Y.S.2d 75, 675 N.E.2d 829 [claim based on property damage due to dumping of waste on claimants' property]; Incorporated Village of Cedarhurst v. Hanover Ins. Co., 89 N.Y.2d 293, 653 N.Y.S.2d 68, 675 N.E.2d 822, supra [claims for property damage and personal injuries asserted by village residents based on floods caused by discharges from village sewer system]; see also Schenectady International v. Employers Ins. of Wausau, 245 A.D.2d 754, 665 N.Y.S.2d 455; Cannon Construction Co. v. Liberty Mutual Ins. Co., 227 A.D.2d 364, 642 N.Y.S.2d 88 [insured sought indemnification for cleanup costs incurred after liquid asphalt applied to nearby roads dispersed into Manhasset Creek] ).
For the foregoing reasons, the order and judgment (one paper) appealed from is reversed, the defendant's motion for summary judgment is denied, the plaintiff's cross motion for summary judgment is granted, and it is declared that the defendant is obligated to defend and indemnify the plaintiff in connection with the underlying action.
ORDERED that the order and judgment is reversed, on the law, with costs, the defendant's motion for summary judgment is denied, and the plaintiff's cross motion for summary judgment is granted; and it is further,
ADJUDGED AND DECLARED that the defendant is obligated to defend and indemnify the plaintiff in connection with the underlying personal injury action.
O'BRIEN, FRIEDMANN and McGINITY, JJ., concur.