Pollution / MO Supreme Courtshoke2013
No duty to defend based on Absolute Pollution Exclusion.
The Doe Run Resources Corporation (“Doe Run”) was sued by plaintiffs allegedly injured by toxic pollution released from Doe Run’s smelting facility in La Oroya, Peru. The underlying lawsuits claim that Doe Run released harmful substances, such as lead, into the environment. The contaminants allegedly permeated the surrounding air and water and settled in the plaintiffs’ home, water and crops. The litigation is ongoing.
Doe Run sued its insurer, St. Paul Fire & Marine Insurance Company (“St. Paul”), alleging St. Paul had a duty to defend Doe Run in the underlying actions. St. Paul issued coverage to Doe Run from 2005 to 2007. St. Paul denied any duty to defend arguing, among other things, that the pollution exclusion contained in the policies barred coverage. The pollution exclusion barred coverage for “injury or damage or medical expenses that result from pollution at, on, in[,] or from [the insured’s premises].” “Pollution” was defined as “any actual, alleged, or threatened discharge, dispersal escape, migration, release, or seepage of any pollutant.” “Pollutant” was defined as “any solid, liquid, gaseous, or thermal irritant or contaminant, including  smoke, vapor, soot, fumes[,] acids, alkalis, chemicals[,] and waste.”
The trial court entered summary judgment in favor of Doe Run, finding the pollution exclusion ambiguous. The trial court based its ruling on Hocker Oil Co. v. Barker-Phillips-Jackson, Inc., 997 S.W.2d 510 (Mo. App. 1999). Hocker involved whether coverage for a gas station’s claim relating to the accidental leakage of gas was barred by a pollution exclusion. The Missouri Appellate Court held it was not barred, because of the nature of the policyholder’s business. According to the appellate court, if the insurer wished to bar coverage for claims involving the policyholder’s “essential business materials,” it should have listed “gasoline” as a pollutant in the policy.
The Missouri Supreme Court reversed the trial court’s ruling. First, the high court held that the allegations in the underlying actions clearly triggered the pollution exclusion: “Though lead does have commercial value – particularly to Doe Run, a lead mining and smelting corporation – it is undoubtedly an irritant or contaminant when released as particulate matter into the environment…The plaintiffs allege toxic chemicals are present in the air, water and surrounding environment and these chemicals are harmful to individuals who breathe them. These claims certainly allege the existence of an irritant or contaminant…Accordingly, the toxic emissions expelled from Doe Run’s facilities are unequivocally a pollutant….”
Second, the high court distinguished Hocker. While the pollution in Hocker involved the policyholder’s “essential business materials,” this case clearly did not: “The only exposure the plaintiffs had to Doe Run’s lead products was via its release of toxic substances into the environment. And because Doe Run is not in the business of polluting the environment, these toxic emissions are not products Doe Run intends to sell…Because these toxic lead byproducts are not Doe Run’s business commodities, Hocker  does not apply.” The Doe Run Resources Corp. v. St. Paul Fire & Marine Ins. Co., No. SC96107 (Mo. Oct. 31, 2017).