Supreme Court enforces 'absolute' pollution exclusion as written
(Continued - Page 2)

The Court considered the history of pollution exclusions. In the 1970s, insurers began including a pollution exclusion in their policies that still permitted coverage if the pollution was “sudden and accidental.” After extensive litigation over the meaning of that term, insurers began using the current, “absolute” pollution exclusion.

The Washington Supreme Court previously considered the absolute pollution exclusion in Kent Farms, Inc. v. Zurich Ins. Co. 140 Wn.2d 396 (2000), in which a fuel deliveryman was injured when a farm’s shutoff valve malfunctioned and diesel fuel spilled onto the deliveryman and into his throat and stomach. There, the Court held that the insured’s liability stemmed from negligent maintenance of the valve, not from environmental harm caused by pollution.

This time, however, the Quadrant Court held that Kent Farms was factually distinguishable. Here, the underlying injury and claim were primarily the result of the toxic nature of the pollutant. The Court noted that two Washington Court of Appeals decisions, Cook v. Evanson, 83 Wn. App. 149 (1996) and City of Bremerton v. Harbor Ins. Co., 92 Wn. App. 17 (1998), were more on-point. In those cases, the Court of Appeals held that the absolute pollution exclusion defeated coverage for claims arising from toxic fumes and noxious gases and odors. And even though Kent Farms was decided more recently, that case did not impliedly or expressly reject the reasoning of either Cook or City of Bremerton.

The dissent in Quadrant argued that the “efficient proximate cause” rule should apply to provide coverage. That rule states that if a covered event causes a chain of other events, the last of which would be excluded, there still is coverage. Here, the dissent contended, Pacific was sued for failing to prepare against dispersal of fumes or warning Kaczor against their effects, both of which the dissent claimed would be covered.