Superior Court Says Lead-Based Paint is a Pollutant

From 1988 to 1993, Brown lived in a rental property that Clifford and Barbara Steely owned. From mid-1993 to 1995, Brown lived in a property that Jack and Shirley Yeager owned.



While a resident in these two properties, Brown suffered from lead poisoning due to the inhalation or ingestion of lead-based paint dust or chips.



In November 1996, Brown’s mother filed a lawsuit against the Steelys and the Yeagers, alleging negligence, breach of implied warranty of habitability and misrepresentation.



Lititz Mutual insured both the Steelys and the Yeagers. Each policy contained a pollution exclusion clause that said Lititz was not responsible to cover any injury that arose “out of the actual, alleged or threatened discharge, dispersal, release or escape of pollutants at or from premises owned, rented or occupied by the named insured.”



When the landlords turned to the insurer for a defense, Lititz refused and instead filed a declaratory judgment action so the court could determine whether the company had a duty to defend in light of the pollution exclusion provision.



The trial court ruled in favor of the plaintiffs, saying the exclusion’s wording was ambiguous. The court granted summary judgment on both the coverage and duty-to-defend issues, dismissing the latter without prejudice.



Lititz appealed to the Superior Court, asking it to decide whether the trial court was correct in granting summary judgment to the plaintiffs.

Citing Madison

In making its decision, the Superior Court said the state Supreme Court’s recent decision in Madison Construction v. Harleysville Mutual Ins. Co., PICS Case No. 99-1477 (Pa. July 27, 1999) Saylor, J.; Cappy, Nigro & Newman, JJ., dissenting (26 pages), provided a “road map” for all challenges to pollution exclusion provisions.



In Madison, the split high court ruled that a pollution exclusion clause of a commercial liability insurance policy precluded coverage for injuries caused by a worker’s exposure to fumes of a “useful product.”



Writing for the majority, Justice Thomas Saylor said the fumes that were emitted from a concrete-curing agent called Euco Floor Coat should be considered a pollutant as defined in an insurance policy provided by the Harleysville Mutual Insurance Co., and the pollution exclusion thus relieved the company of the duty to defend its insured, Madison Construction Co.



“We find no merit in [appellant's] claim that the pollutant in this case consisted solely of the fumes released by the application of Euco Floor Coat to the cement, and that what Madison `brought on … to the premises’ … was not the pollutant (that is, the fumes themselves) but a non-polluting substance (Euco Floor Coat) in sealed containers,” Saylor wrote.



“As Harleysville points out, while the form of the substance may have changed, its chemical composition did not. Given that fact, as well as the all-encompassing language of the definition, Madison avers a distinction without a difference.”



Justices Ralph J. Cappy, Russell M. Nigro and Sandra Schultz Newman each filed a separate dissenting opinion.



In upholding the Superior Court’s decision, the Supreme Court turned to a plain-meaning interpretation of the language of the exclusion clause, focusing on the definitions of “pollutant” and “discharge,” “dispersal,” “seepage,” “migration” and “release.”



The court used the Material Safety Data Report prepared by the chemical’s manufacturer, which defined the dangers of the chemical, specifically stating that “inhalation of dusts and vapors should be avoided.”



The court sided with Harleysville, finding that the dangers of the chemical were known and that the chemical was a pollutant in both its solid and gaseous states because, regardless of its form, the chemical composition remained consistent.



The court then examined dictionary definitions, finding that they all had an “element of movement” in common.



“When thus read, the exclusion applies to the incident at issue: a pollutant, Euco Floor Coat, was applied to the surface of the concrete utility trenches, and it dispersed into the air above and around the trenches,” Saylor wrote.



The court ruled that the exclusion unambiguously provided that a pollutant need not fully enter the environment to be considered “released.”



In his dissent, Cappy said that certain terms of the exclusion were ambiguous and therefore warranted a finding in favor of the insured. Cappy also addressed the future implications of the majority’s decision.



“I am concerned that the majority’s `plain meaning’ approach in interpreting the pollution exclusion establishes a dangerous precedent which will yield absurd results,” Cappy wrote.

Pollutant