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Nat'l Union Fire Ins. Co. v. CBI Indus.

Supreme Court of Texas

September 20, 1994, ARGUED ; October 5, 1995, DELIVERED

No. D-4353

Opinion

 [*518] PER CURIAM

The Motion For Rehearing is overruled. Our opinion of March 2, 1995 is withdrawn and the following opinion is substituted.

In this action for damages, injunctive relief, and a declaration of coverage, the issue is whether so-called "absolute pollution exclusions" in insurance policies unambiguously apply to exclude damage coverage from an accidental explosion producing a toxic hydrofluoric acid cloud over a city. The trial court granted summary judgment in favor of the defendant insurance companies. The court  [*519]  of appeals reversed the summary judgment and remanded the cause to the trial court. 860 S.W.2d 662. We agree with the trial court that the provisions unambiguously apply under the circumstances presented. We reverse the judgment of the court of appeals and affirm the trial court's judgment.

CBI Industries, Inc. ("CBI") brought this action against various insurance companies which insured CBI under general liability [**2]  policies. The insurers fall into three groups providing successive "layers" of coverage: (1) National Union Fire Insurance Company of Pittsburgh, Pennsylvania ("National Union"); (2) Anglo American Insurance Company, Ltd. and others (collectively "Anglo American"); and (3) Rome and Companies (collectively "Rome"). Each of the policies issued to CBI by these companies contained a version of what is known in the industry as an "absolute pollution exclusion." The National Union policy contained the following exclusion:

This policy does not apply to … any Personal Injury or Property Damage arising out of the actual or threatened discharge, dispersal, release or escape of pollutants, anywhere in the world; … "Pollutants" means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste material. Waste materials include materials which are intended to be or have been recycled, reconditioned or reclaimed.

The Anglo American and Rome policies contained this exclusion:

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907 S.W.2d 517 *; 1995 Tex. LEXIS 152 **; 39 Tex. Sup. J. 7; 41 ERC (BNA) 1279

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA, ET AL., PETITIONERS v. CBI INDUSTRIES, INC., RESPONDENTS

Subsequent History:  [**1]  This Opinion Substituted on Overrule of Motion for Rehearing for Withdrawn Opinion of March 2, 1995, Previously Reported at: 1995 Tex. LEXIS 17.

Prior History: ON APPLICATION FOR WRIT OF ERROR TO THE COURT OF APPEALS FOR THE FIRST DISTRICT OF TEXAS.

CORE TERMS

ambiguous, policies, pollution exclusion, pollutants, coverage, insurance company, latent ambiguity, summary judgment, trial court, patent, court of appeals, discovery, hydrofluoric acid, subject matter, latently, extrinsic evidence, insurance policy, parol evidence, circumstances, unambiguous, insured, parties, deals

Business & Corporate Compliance, Hazardous Wastes & Toxic Substances, Resource Conservation & Recovery Act, Identification & Listing of Hazardous Wastes, Environmental Law, General Overview, Contracts Law, Defenses, Ambiguities & Mistakes, Evidence, Types of Evidence, Documentary Evidence, Parol Evidence, Contract Interpretation, Parol Evidence, Insurance Law, Claim, Contract & Practice Issues, Policy Interpretation, Ambiguous Terms, Contract Formation, Mistake, Ambiguities & Contra Proferentem, Contract Ambiguities, Latent Ambiguities, Patent Ambiguities, Question of Law, Civil Procedure, Judgments, Summary Judgment