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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. The Estate of Josiah Wheeler v. Garrison Property and Casualty Insurance Company (2/28/2025) sp-7752
Notice: This opinion is subject to correction before publication in the PACIFIC REPORTER.
Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,
303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email
corrections@akcourts.gov.
THE SUPREME COURT OF THE STATE OF ALASKA
THE ESTATE OF JOSIAH )
WHEELER, pursuant to the assignment ) Supreme Court No. S-18849
)
of rights of Deborah Overly and Terry
Summers, and Keith Wheeler and 9th Cir. Case No . 22-35484
)
)
Rhetta Wheeler, individually and as
)
representatives of the Estate of Josiah U.S. District Court No. 4:20-cv-00041-
)
Wheeler, SLG
)
Appellants, )
O P I N I O N
)
)
v.
No. 7752 - February 28, 2025
)
GARRISON PROPERTY AND )
)
CASUALTY INSURANCE
)
COMPANY, a subsidiary of USAA
)
Insurance Company,
)
)
Appellee.
)
Certified Question from the United States Court of Appeals
for the Ninth Circuit on Appeal from the United States
District Court for the District of Alaska, Sharon Gleason,
District Judge.
Appearances: Kenneth L. Covell, Fairbanks, for Appellant.
Cheryl L. Graves, Farley & Graves, P.C., Anchorage, for
Appellee. Laura A. Foggan, Crowell & Moring, LLP,
Washington, D.C., and Eva R. Gardner, Ashburn & Mason,
P.C., Anchorage, for Amicus Curiae Complex Insurance
Claims Litigation Association.
----------------------- Page 2-----------------------
Before: Maassen, Chief Justice, and Borghesan, Henderson,
and Pate, Justices. [Carney, Justice, not participating.]
BORGHESAN, Justice.
INTRODUCTION
In this matter we answer a question certified to us by the United States
Court of Appeals for the Ninth Circuit. The question is whether a coverage exclusion
in a homeowners insurance policy for loss caused by "pollutants" bars coverage for
injury caused by exposure to carbon monoxide emitted from a home appliance that was
improperly installed. To answer this question, we consider the insurance policy as a
whole and interpret its terms according to an insured's reasonable expectations. The
wording of the policy's pollution exclusion is broad, as is the definition of "pollutants."
But several aspects of the exclusion suggest a narrower interpretation. And the policy
specifically excludes coverage for exposure to lead paint and asbestos - potentially
toxic substances that fall within the policy's definition of "pollutants" but which, like
carbon monoxide, are often found within the home and pose little danger absent defect
or malfunction. Yet there is no comparable exclusion for carbon monoxide. With these
features of the policy in mind, we conclude that an insured could reasonably expect
coverage for injuries resulting from exposure to carbon monoxide from an improperly
installed home appliance.
FACTS AND PROCEEDINGS
A. Facts
The parties do not dispute the underlying facts of this case. Seventeen-
year-old Josiah Wheeler rented a cabin in Tok owned by Deborah Overly and Terry
Summers. During the tenancy Wheeler was found dead in the cabin's bathtub. An
autopsy revealed that he had died of acute carbon monoxide poisoning. A deputy fire
marshal investigated the property and discovered that a propane water heater, installed
in the same room as the bathtub, had an exhaust flue unconnected to any external
-2- 7752
----------------------- Page 3-----------------------
venting. Testing showed that when the water heater ran with the bathroom door shut,
the room would accumulate high levels of carbon monoxide.
At the time of Wheeler's death, the cabin was covered under a
homeowners insurance policy issued by Garrison Property and Casualty Insurance
Company (Garrison). The policy included coverage for personal liability and medical
payments for others, but this coverage was subject to certain exclusions. The policy
excluded coverage for, among other things, bodily injury or property damage:
k. Arising out of the actual, alleged, or threatened discharge,
dispersal, release, escape, seepage or migration of
"pollutants" however caused and whenever occurring. This
includes any loss, cost or expense arising out of any:
(1) Request, demand or order that any "insured" or
others test for, monitor, clean up, remove, contain, treat,
detoxify, or assess the effect of "pollutants"; or
(2) Claim or suit by or on behalf of a governmental
authority for damages because of testing for, monitoring,
cleaning up, removing, containing, treating, detoxifying
or neutralizing, or in any way responding to, or assessing
the effects of "pollutants".
l. Arising out of exposure to lead paint or other lead-based
products.
m. Arising out of exposure to asbestos.
The policy defined "pollutants" as "any solid, liquid, gaseous or thermal irritant or
contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, and
waste."
B. Proceedings
Wheeler's estate and each of his parents individually sought an out-of-
court settlement with the homeowners, Overly and Summers. Overly and Summers
notified Garrison of the claims, and Garrison responded with a letter denying coverage.
Garrison's letter took the position that carbon monoxide is a "pollutant" under the
policy and that the losses from Wheeler's death were not insured due to the pollution
exclusion. Garrison declined to defend Overly and Summers against Wheeler's claims.
-3- 7752
----------------------- Page 4-----------------------
Overly and Summers eventually signed a confession of judgment
admitting that they negligently caused Wheeler's death. They confessed liability for
$1,400,000 to Wheeler's estate and $140,000 to each of Wheeler's parents. Overly and
Summers also assigned their right to proceed against Garrison for losses arising from
Wheeler's death.
In December 2020 Wheeler's estate and each of his parents (collectively
the Estate) filed suit against Garrison in federal district court. The complaint
maintained that the policy's pollution exclusion did not apply to Wheeler's death. The
Estate sought an award of damages and a declaratory ruling that the homeowners policy
provided coverage. Eventually the parties filed competing motions for declaratory
relief, which the district court construed as motions for summary judgment.
The district court entered summary judgment against the Estate. The court
first concluded that the language in the exclusion was unambiguous. The district court
1
ruled that our decision in Whittier Properties, Inc. v. Alaska National Insurance Co.
suggested we would interpret the pollution exclusion "literally" and would conclude
that it was unambiguous. The district court concluded that Overly and Summers could
not have reasonably expected coverage. It reasoned that carbon monoxide fell within
the policy's definition of "pollutant." It also read the terms of the exclusion -
"discharge, dispersal, release, escape, seepage or migration of 'pollutants' however
caused and whenever occurring" - to encompass emissions from a water heater. It
therefore concluded that Wheeler's death was not covered.
The Estate appealed, renewing many of its arguments from the district
court proceedings. The Ninth Circuit Court of Appeals expressed doubt that Whittier
Properties conclusively established that we would interpret the pollution exclusion
literally. It also cited decisions from many jurisdictions that have enforced the
exclusion with respect to one substance but limited it with respect to others.
1
185 P.3d 84 (Alaska 2008).
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----------------------- Page 5-----------------------
Instead of ruling on the merits, the Ninth Circuit sought clarification from
our court on how the pollution exclusion should be interpreted under Alaska law.
Specifically, the court certified the following question: "Does a total pollution
exclusion in a homeowners insurance policy exclude coverage of claims arising from
carbon monoxide exposure?" The court also indicated: "We do not intend the form of
this question to limit the Alaska Supreme Court's consideration of the issues relevant
to this matter. If the Alaska Supreme Court decides to consider the certified question,
it may reword the question in its discretion."
2
We accepted the certified question and ordered full briefing.
STANDARD OF REVIEW
The proper interpretation of insurance policy language is a question of
law.3 We use our "independent judgment when answering a certified question of law
and 'select the rule of law that is most persuasive in light of precedent, reason, and
policy.' "4
DISCUSSION
A. Under Alaska Law Insurance Contracts Are Interpreted To Give
Effect To The Reasonable Expectations Of The Insured.
The exclusion applied by Garrison to deny coverage is common in
homeowners insurance policies and is often referred to as the "total pollution
exclusion."5 This exclusion was developed in the early 1970s as an effort by the
insurance industry to limit coverage for pollution-related losses in commercial general
2
We thank amicus curiae Complex Insurance Claims Litigation
Association for its participation in this appeal.
3
Downing v. Country Life Ins. Co. , 473 P.3d 699, 704 (Alaska 2020).
4
Buntin v. Schlumberger Tech. Corp., 487 P.3d 595, 598 (Alaska 2021)
(quoting Kallstrom v. United States, 43 P.3d 162, 165 (Alaska 2002)).
5 ORDAN R. PLITT ET A L., COUCH ON INSURANCE § 127:13 (2024 ed.).
9 J
-5- 7752
----------------------- Page 6-----------------------
liability policies.6
It is a standard provision that has been modified several times over
7
the years to limit liability related to pollution.
Courts around the country have interpreted the pollution exclusion in a
variety of factual settings, including for losses caused by carbon monoxide or other
8
gases. These decisions are not unanimous - they often reach different conclusions,
9
and even decisions reaching similar results use different reasoning.
The parties' briefing cites extensively to decisions from other
jurisdictions. These decisions are illuminating, but we focus primarily on the text of
the specific insurance policy at issue in this case and the reasonable expectations of the
insured.
6
See Am. States Ins. Co. v. Koloms , 687 N.E.2d 72, 79-81 (Ill. 1997);
Morton Int'l, Inc. v. Gen. Accident Ins. Co. of Am. , 629 A.2d 831, 848-50 (N.J. 1993);
E. Joshua Rosenkranz, Note, The Pollution Exclusion Clause Through the Looking
EO. L.J. 1237, 125 1-52 (1986); Robert M. Tyler, Jr. & Todd J. Wilcox,
Glass, 74 G
Pollution Exclusion Clauses: Problems in Interpretation and Application Under the
Comprehensive General Liability Policy , 17 IDAHO L. R EV. 497, 499-500 (1981).
7
See JORDAN R. PLITT ET AL., supra note 5; Koloms, 687 N.E.2d at 8 1.
8 Chad G. Marzen, The Pollution Exclusion and Carbon Monoxide, 93 N.D.
EV. 219, 222-37 (2018).
L. R
9
Compare Midwest Fam. Mut. Ins. Co. v. Wolters , 831 N.W.2d 628, 636-
37 (Minn. 2013) (holding carbon monoxide is "pollutant" within plain language of
pollution exclusion), with Koloms, 687 N.E.2d at 79 (finding pollution exclusion
overbroad and narrowly construing exclusion according to its historical application in
industrial context), and Stoney Run Co. v. Prudential-LMI Com. Ins. Co. , 47 F.3d 34,
36-39 (2d Cir. 1995) (finding pollution exclusion ambiguous as to carbon monoxide in
residence and construing exclusion in light of historical use to exclude coverage in
industrial context), and Reg'l Bank of Colo., N.A. v. St. Paul Fire & Marine Ins. Co.,
35 F.3d 494, 498 (10th Cir. 1994) (concluding "an ordinary policyholder would not
reasonably characterize carbon monoxide emitted from a residential heater which
malfunctioned as 'pollution' ").
-6- 7752
----------------------- Page 7-----------------------
In Alaska "[t]he liability of an insurer is generally determined by the terms
of the policy it has issued."10
"Where an insurance company by plain language limits
11 "But because an insurance
the coverage of its policy, we recognize that restriction."
policy is a contract of adhesion, we construe it to give effect to the insured's reasonable
expectations."12 "In other words, '[t]he objectively reasonable expectations of
applicants and intended beneficiaries regarding the terms of insurance contracts will be
honored even though painstaking study of the policy provisions would have negated
13
those expectations.' "
Because the specific factual context in which the policy applies is
important to its interpretation, we exercise our discretion to slightly rephrase the
question certified to us by the Ninth Circuit. We ask: Does the pollution exclusion in
Overly and Summers's homeowners insurance policy bar coverage for injury arising
out of exposure to carbon monoxide emitted by an improperly installed home
appliance?
B. Our Decision In Whittier Properties Does Not Control This Case.
Although we have never before interpreted a pollution exclusion as
applied to carbon monoxide poisoning, we have interpreted a similarly worded
pollution exclusion in a commercial insurance policy. In Whittier Properties we held
that the pollution exclusion unambiguously barred coverage for losses due to gasoline
14
leaking from a gas station into the surrounding soil and water.
10
C.P. ex rel. M.L. v. Allstate Ins. Co., 996 P.2d 1216, 1222 (Alaska 2000);
see also Thompson v. United Servs. Auto. Ass'n, 542 P.3d 222, 226 ( Alaska 2024).
11
C.P. ex rel. M.L., 996 P.2d at 1222; see also Thompson, 542 P.3d at 226.
12
C.P. ex rel. M.L., 996 P.2d at 1222.
13
Id. (alteration in original) (quoting Bering Strait Sch. Dist. v. RLI Ins. Co.,
873 P.2d 1292, 12 95 (Alaska 1994)).
14
Whittier Props., Inc. v. Alaska Nat 'l Ins. Co., 185 P.3d 84, 87, 90-91
(Alaska 2008).
- 7752
-7
----------------------- Page 8-----------------------
Garrison argues that this holding compels a similar conclusion for carbon
monoxide. Garrison's argument echoes the district court's reasoning in this case. The
district court concluded that in Whittier Properties we adopted a literal interpretation of
the pollution exclusion. Reading the exclusion and definition of pollutants literally, the
district court concluded carbon monoxide was a "pollutant" and that Wheeler's death
by carbon monoxide exposure was excluded.
The Whittier Properties decision does not compel a particular conclusion
in this case. That case involved a different substance, a different factual context, and a
different insurance policy. Although it provides some guidance here, it does not relieve
us of the duty to examine the policy at issue in this case in light of the insured's
reasonable expectations.
In Whittier Properties we considered whether an absolute pollution
exclusion in a commercial general liability policy excluded losses arising from gasoline
that leaked from pipes underneath a gas station into the surrounding groundwater and
15 The insured (the gas station) faced lawsuits from its neighbors and the State, but
soil.
the insurer refused to defend.16 The insured argued that the pollution exclusion was
ambiguous because it did not include the term "gasoline" in the definition of "pollutant"
and because gasoline was considered a "product" in other provisions of the policy.17
We disagreed.18 We held there was no ambiguity whether "gasoline is a pollutant
within the meaning of the policy exclusion" when it "escapes or reaches a location
where it is no longer a useful product."19 In reaching this conclusion, we quoted in a
footnote an amicus brief stating that "[o]ver 100 appellate court cases and 36
15
Id. at 87.
16
Id. at 87-88.
17
Id. at 89-91.
18
Id. at 90-91.
19
Id.
-8- 7752
----------------------- Page 9-----------------------
jurisdictions have ruled that pollution exclusions like the one at issue here
unambiguously bar coverage for harms caused by exposure to many different types of
20 This footnote cited a pair of cases showing the weight of authority
pollutants."
supporting our conclusion.21 Garrison argues that our analysis endorsed a "literal, plain
meaning interpretation" of the pollution exclusion. Garrison also suggests that in citing
those cases, we implicitly rejected a more limited reading of the pollution exclusion as
applying only to traditional industrial or environmental pollution.
The Whittier Properties decision did not go quite that far. In particular,
we are not persuaded by Garrison's suggestion that after Whittier Properties, the only
relevant question is whether a literal reading of the pollution exclusion and
accompanying definition includes carbon monoxide exposure. We did reject the
argument that the lack of express mention of gasoline in the definition of pollutants
22 But we did not rule that a literal reading of the pollution exclusion
created ambiguity.
is definitive in all cases, even when other provisions create uncertainty.
As for the two cases cited in the footnote, they were cited only for the
proposition that many courts had "ruled that pollution exclusions like the one at issue
here unambiguously bar coverage for harms caused by exposure to many different types
23
of pollutants." We did not go beyond the facts at issue in Whittier Properties to decide
that any exposure to any substance falling within the literal meaning of the term
20
Id. at 90 n.29 (alteration in original).
21
Id. (first citing Deni Assocs. of Fla. Inc. v. State Farm Fire & Cas. Ins.
Co., 711 So. 2d 1135, 1138-40 (Fla. 1998) (concluding pollution exclusion was
unambiguous as applied to ammonia fumes and chemical insecticide but declining to
adopt doctrine of reasonable expectations); and then citing Quadrant Corp. v. Am.
States Ins. Co., 110 P.3d 733, 735, 743 (Wash. 2005) (en banc) (holding pollution
exclusion barred tenant's recovery for injury arising out of exposure to fumes from
sealant applied to neighboring deck)).
22
Id. at 90-91.
23
See id. at 90 n.29.
-9- 7752
----------------------- Page 10-----------------------
"pollutants" is excluded, in all factual contexts and regardless of other policy language.
Nor did we reject the argument that the pollution exclusion "applies only to traditional
industrial or outdoor environmental harms." Indeed, Whittier Properties involved
outdoor environmental pollution of the "traditional" sort: gasoline leakage from a gas
24 Therefore, the decision does not directly answer
station into the soil and groundwater.
the question posed by this case.
Finally, Whittier Properties is distinguishable in another important
respect. One reason we rejected the insured's argument that its reasonable expectations
supported coverage was evidence that it knew its policy did not cover damages from
25 There is no such evidence in this case.
leaking gas tanks.
C. An Insured Could Reasonably Expect Coverage For Injury Resulting
From Carbon Monoxide Exposure Due To An Improperly Installed
Water Heater.
When interpreting insurance contracts, we construe policy language in
accordance with "ordinary and customary usage."26 Coverage is construed "broadly
and exclusions narrowly, in favor of insureds."27 "Any ambiguous terms are to be
construed in favor of the insured."28 "[A]mbiguities only exist when there are two or
more reasonable interpretations of particular policy language."29
But "[c]onstruction of an insurance policy under the principle of
reasonable expectations does not depend on a prior determination of policy
24
Id. at 87.
25
Id. at 92.
26
Thompson v. United Servs. Auto . Ass'n , 542 P.3d 222, 226 ( Alaska 2024)
(quoting State Farm Mut. Auto. Ins. Co. v. Dowdy, 192 P.3d 994, 998 (Alaska 2008)).
27
Whittier Props., Inc., 185 P.3d at 88; see also Allstate Ins. Co. v. Teel , 100
P.3d 2, 4 (Alaska 2004).
28
Hahn v. GEICO Choice Ins. Co., 420 P.3d 1160, 1171 (Alaska 2018).
29
Id. (quoting State Farm Mut. Auto. Ins. Co. v. Houle, 269 P.3d 654, 658
(Alaska 2011)).
752
-10- 7
----------------------- Page 11-----------------------
ambiguity."30
We honor "[t]he objectively reasonable expectations of applicants and
intended beneficiaries regarding the terms of insurance contracts . . . even though
31
painstaking study of the policy provisions would have negated those expectations."
"However, since most insureds develop an expectation that every loss will be covered,
the reasonable expectation doctrine 'must be limited by something more than the
32
fervent hope usually engendered by loss.' " Therefore, to determine the reasonable
expectations of the parties, "we look to the language of the disputed policy provisions,
the language of other provisions of the insurance policy, relevant extrinsic evidence,
33
and case law interpreting similar provisions."
1. Terms of the pollution exclusion
The Estate highlights several aspects of the exclusion's language that, in
its view, support a reasonable interpretation that carbon monoxide poisoning from a
water heater does not fall within the exclusion. First, it argues that the six operative
terms in the exclusion - discharge, dispersal, release, escape, seepage, and migration
- are "environmental terms of art" that "describe the passage of a pollutant from a
container to the environment." It reasons that the plain language of the exclusion does
not bar coverage for injury when the water heater's "products of combustion," i.e.,
carbon monoxide, did not disperse. Second, focusing on the exclusion's subsections
related to testing, clean up, and detoxification, the Estate maintains that "[a] reasonable
layperson could read the exclusion and conclude that it only applied if the instance of
30
C.P. ex rel. M.L. v. Allstate Ins. Co., 996 P.2d 1216, 1222 (Alaska 2000).
31
Id. (alteration omitted) (quoting Bering Strait Sch. Dist. v. RLI Ins. Co.,
873 P.2d 1292, 1295 (Alaska 1994)).
32
State Farm Fire & Cas. Co. v. Bongen, 925 P.2d 1042, 1047 (Alaska
1996) (quoting Millar v. State Farm Fire & Cas. Co., 804 P.2d 822, 826 (Ariz. App.
1990)).
33
C.P. ex rel. M.L., 996 P.2d at 1223.
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----------------------- Page 12-----------------------
pollution involved government ordered cleanup."34
Third, the Estate argues that "[a]
reasonable layperson could also conclude that 'pollution' in 'pollution exclusion' refers
to instances of what a reasonable layperson understands by the term pollution, i.e.,
traditional outdoor industrial pollution, not improperly vented indoor carbon
monoxide."
Garrison disputes the Estate's "container" interpretation, arguing that the
policy "simply does not say" that the exclusion applies only to pollutants that escape
from containers. Instead, Garrison argues, the six words of the exclusion connote
pollution by any "movement." Garrison also points out that "pollutants" is a defined
term meaning "any solid, liquid, gaseous or thermal irritant or contaminant, including
. . . fumes." It asserts that carbon monoxide is a gas, and that "given its toxic effect
upon inhalation, it reasonably falls within the 'fume' category of the 'gaseous . . .
contaminant' definition of this policy." Accordingly, Garrison argues, poisoning from
carbon monoxide emitted by an improperly installed water heater falls within the broad,
plain language of the pollution exclusion.
Garrison's interpretation is a reasonable reading of the ordinary and
customary usage of the words in the policy. Webster's Dictionary defines carbon
34
The Estate references this passage at the end of the policy's exclusion:
This includes any loss, cost or expense arising out of
any:
(1) Request, demand or order that any "insured" or
others test for, monitor, clean up, remove, contain,
treat, detoxify, or assess the effects of
"pollutants"; or
(2) Claim or suit by or on behalf of a governmental
authority for damages because of testing for,
monitoring, cleaning up, removing, containing,
treating, detoxifying or neutralizing, or in any way
responding to, or assessing the effects of
"pollutants".
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----------------------- Page 13-----------------------
monoxide as "a colorless, odorless, highly poisonous gas."35
"Contaminant" is defined
36
as "a substance that contaminates," and "contaminate" is defined as "to make impure,
37 "Irritant" is defined as "something
infected, corrupt . . . by contact" and to "pollute."
that causes irritation."38 One definition of "irritation" is "a condition of soreness or
inflammation in some organ or [bodily] part."39 It is reasonable to say that carbon
monoxide contaminates the air in residences and irritates those who inhale it.
The key question, then, is whether the Estate's narrower reading of the
exclusion is also reasonable. There is some logic to its point that the exclusion's use of
the general term "pollutants" has a particular connotation, notwithstanding the broad
way in which the term is defined. In Hahn v. GEICO Choice Insurance Company, we
reasoned that a defined term in an insurance policy "must have some bearing on the
40 The dispute centered upon whether the
meaning of the word that partially defines it."
injured person - a motorcyclist who was hit by the driver and bounced off the car's
hood - was "occupying" the car.41 The policy defined "occupying" to mean "in, upon,
getting into or getting out of."42 Although the motorcyclist was temporarily "upon" the
hood of the car, we rejected the argument that he was "occupying" it.43 We reasoned
that while a specific definition can broaden the meaning of a defined term, the
35
Carbon monoxide, WEBSTER 'S NEW WORLD DICTIONARY OF THE
AMERICAN LANGUAGE (2d ed. 1980).
36 Contaminant, id.
37 Contaminate, id.
38
Irritant, id.
39 Irritation , id.
40
420 P.3d 1160, 1171 (Alaska 2018).
41
Id. at 1163.
42
Id.
43
Id. at 1171.
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----------------------- Page 14-----------------------
relationship between terms goes both ways: the defined term shapes the meaning of the
words used to define it.44
So it is with "pollutants" and the words used to define that term.
"Pollutants" and "pollute" have a commonly understood connotation. "Pollutant" is
defined as "something that pollutes," especially "a harmful chemical or waste material
45
That meaning lends support to an
discharged into the water or atmosphere."
interpretation of the exclusion that is somewhat narrower than any substance that
contaminates or irritates, such as an accidental discharge of bear repellant or scalding
water from a shower head - both of which fall under the literal definition of pollutants.
In addition, the terms used to describe the method by which "pollutants" cause harm,
such as "discharge" and "dispersal," are "terms commonly associated with
environmental law" that suggest a narrower interpretation, excluding coverage for the
46
kind of pollution that harms the environment.
This interpretation is reinforced, as the Estate points out, by the
subsections that follow. These subsections target liability for demands or damages
related to "testing for, monitoring, cleaning up, removing, containing, treating,
detoxifying or neutralizing, or in any way responding to, or assessing the effects of
47
'pollutants.' "
44
Id.
45
Pollutant, WEBSTER 'S NEW WORLD DICTIONARY OF THE AMERICAN
LANGUAGE (2d ed. 1980).
46
Essex Ins. Co. v. Avondale Mills, Inc., 639 So. 2d 1339, 1341-42 (Ala.
1994); see also Belt Painting Corp. v. TIG Ins. Co., 795 N.E.2d 15, 20-21 (N.Y. 2003)
(holding that pollution exclusion was ambiguous as applied to "ordinary paint or solvent
fumes that drifted a short distance from the area of the insured's intended use and
allegedly caused inhalation injuries to a bystander").
47
See Am. States Ins. Co. v. Koloms , 687 N.E.2d 72, 81 (Ill. 1997) (noting
development of pollution exclusion to exclude coverage for government cleanup).
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----------------------- Page 15-----------------------
The question is whether that connotation can reasonably be read to
exclude coverage for carbon monoxide poisoning. Not only is the definition of
"pollutants" broad, but the exclusion applies to loss arising from discharge of pollutants
"however caused and whenever occurring." When the pollution exclusion is considered
in isolation, the Estate's arguments struggle to gain traction against the breadth of the
exclusion's terms.
2. The language of other provisions of the policy
But we do not consider policy provisions in isolation. We consider them
48 An insured may
in light of "the language of other provisions of the insurance policy."
reasonably draw inferences from the way clauses are grouped together.49
The two exclusions that follow the pollution exclusion have a significant
effect on how a reasonable insured would interpret the pollution exclusion.
Immediately following the pollution exclusion are exclusions for liability "[a]rising out
of exposure to lead paint or other lead-based products" and " [a]rising out of exposure
to asbestos." Lead paint, lead-based products, and asbestos all fall within the policy's
literal definition of "pollutants." They are solid or liquid "contaminant[s]." And the
typical ways in which people are poisoned by these substances involves the kind of
"movement" described in the pollution exclusion: When lead paint chips come off the
windowsill, they are "release[d]," "escape," or "migrat[e]" from their original location.
When plumbing materials containing lead corrode, the lead is "discharge[d]" or
"release[d]" into the drinking water. Asbestos fibers, if not properly contained,
"dispers[e]" through the air, where they can be inhaled.
The express exclusions for exposure to these common household
"pollutants" lend support to a narrower interpretation of the pollution exclusion. A
reasonable insured could infer from these specific exclusions that exposure to toxic
48
C.P. ex rel. M.L. v. Allstate Ins. Co., 996 P.2d 1216, 1223 (Alaska 2000).
49
West v. Umialik Ins. Co., 8 P.3d 1135, 1138-39 (Alaska 2000).
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----------------------- Page 16-----------------------
substances commonly found within the home does not fall within the pollution
exclusion. In the same vein, the asbestos and lead exclusions' use of the broad term
"exposure" contrasts with the six "movement" words in the pollution exclusion -
"discharge, dispersal, release, escape, seepage or migration." "Exposure" means any
50 This lends support to the Estate's argument
contact with the substance in question.
that the six "movement" words in the pollution exclusion refer to the kinds of movement
of toxic substances associated with environmental pollution, rather than inhalation or
ingestion of toxic substances in the home. Indeed, it is telling that Garrison argues the
movement words are exceedingly broad - covering "all such types and degrees of
51 - while also suggesting that they might be narrow enough to allow
movement"
coverage for smoke inhalation from a fire inside the house. Garrison's attempt to have
it both ways underscores how a reasonable insured might view the pollution exclusion
more narrowly than its literal meaning, considered in isolation.
3. Relevant extrinsic evidence
The parties have not identified any relevant extrinsic evidence, so this
factor is not applicable.
4. Case law interpreting similar provisions
As noted above, courts around the country have interpreted similarly or
identically worded pollution exclusions in cases with facts similar to this one. To
summarize broadly, there are two camps. The first camp includes decisions concluding
that carbon monoxide poisoning falls within the plain meaning of the words in the
pollution exclusion. The second camp comprises cases rejecting this approach based
on a mix of rationales.
50
See Exposure, MERRIAM-WEBSTER 'S COLLEGIATE DICTIONARY (10th ed.
1999) (defining "exposure" as "the fact or condition of being exposed").
51 For this proposition, Garrison quotes Madison Constr. Co. v. Harleysville
Mut. Ins. Co. , 735 A.2d 100, 108 (Pa. 1999).
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Cases in the first camp generally observe that carbon monoxide is a gas
that can poison people who inhale it, and then conclude that these facts are encompassed
52 These courts sometimes support this
by the plain terms of the pollution exclusion.
conclusion by pointing out that many state and federal regulatory authorities refer to
carbon monoxide as a form of pollution.53 Some courts acknowledge the history of the
clause but maintain that it does not warrant reading limitations into the policy that are
not otherwise reflected in the plain language.54 These courts generally apply a literal
interpretation to the operative terms of the policy (discharge, escape, release, disperse,
etc.).55 For example, one court concluded that confinement of carbon monoxide in an
apartment due to a blocked vent fell within the language of the policy - "discharge,
dispersal, seepage, migration, release, or escape"56 - because the "normal emission of
carbon monoxide from an apartment furnace falls within the plain meaning of the
terms."57
Cases in the second camp, holding that the pollution exclusion does not
bar coverage for carbon monoxide exposure in the home, rely on a broader set of
52
See, e.g., Reed v. Auto-Owners Ins. Co., 667 S.E.2d 90, 92 (Ga. 2008);
Nautilus Ins. Co. v. Country Oaks Apartments, Ltd., 566 F.3d 452, 455-58 (5th Cir.
2009) (applying Texas law); Midwest Fam. Mut. Ins. Co. v. Wolters, 831 N.W.2d 628,
637-38 (Minn. 2013).
53
See, e.g., Midwest Fam. Mut. Ins. Co., 831 N.W.2d at 637.
54
See, e.g., Reed, 667 S.E.2d at 92 (concluding "[n]othing in the text of the
pollution exclusion clause supports" reading clause in light of its historical purpose);
Bituminous Cas. Corp. v. Sand Livestock Sys., Inc., 728 N.W.2d 216, 222 (Iowa
2007) ("Although the court in Koloms looked beyond the bare language of the exclusion
to find ambiguity, we find it inappropriate and unwise to do so. An ambiguity exists
only if the language of the exclusion is susceptible to two interpretations." (internal
quotation marks omitted)).
55
See, e.g., Nautilus Ins. Co., 566 F.3d at 456-58.
56
Id. at 453-54.
57
Id. at 453, 457.
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rationales. Some cases find the plain language of the exclusion to be overbroad and
narrowly construe it according to its historical application in traditional environmental
58 Most conclude that the pollution exclusion is ambiguous as to carbon
litigation.
monoxide toxicity in a residential setting.59 Unlike cases in the first camp, these cases
acknowledge that facially unambiguous provisions may be contextually ambiguous -
that an ambiguity appears "when a provision is applied to a particular claim."60
To resolve the ambiguity, some cases rely heavily on the history of the
clause to conclude that the term "pollutants" is limited to forms of "traditional
61 or that this is a reasonable interpretation from the insured's
environmental pollution,"
perspective.62 But in our view, the history of the pollution exclusion is not relevant to
how a reasonable insured would interpret the policy. Most reasonable people are not
aware of the drafting history of clauses in insurance policies.
58
See, e.g., Am. States Ins. Co. v. Koloms, 687 N.E.2d 72, 79-82 (Ill. 1997).
59
See, e.g., Am. Nat 'l Prop. & Cas. Co. v. Wyatt, 400 S.W.3d 417, 426 (Mo.
App. 2013); Stoney Run Co. v. Prudential-LMI Com. Ins. Co., 47 F.3d 34, 38-39 (2d
Cir. 1995); Century Sur. Co. v. Casino W., Inc., 329 P.3d 614, 617-18 (Nev. 2014);
Thompson v. Temple, 580 So. 2d 1133, 1135 (La. App. 1991).
60
Motorists Mut. Ins. Co. v. RSJ, Inc. , 926 S.W.2d 679, 680 (Ky. App. 1996)
(alteration omitted) (quoting St. Paul Fire & Marine Ins. Co. v. Powell- Walton-
Milward, Inc., 870 S.W.2d 223, 227 (Ky. 1994)); see Thompson, 580 So. 2d at 1135
("[W]hen there is any doubt about the meaning of an agreement, the court must
ascertain the common intention of the parties, rather than adhering to the literal sense
of the terms."); see also Stoney Run Co., 47 F.3d at 37 (explaining that "[a]n
exclusionary clause . . . can be ambiguous in one context and not in another").
61
See, e.g., Koloms, 687 N.E.2d at 80-82.
62
See, e.g., Century Sur. Co., 329 P.3d at 617-18; see also Stoney Run Co.,
47 F.3d at 39.
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Other courts in the second camp resolve the contextual ambiguity by
focusing on the pollution exclusion's terms. For example, some courts have concluded
63
that the operative terms (discharge, escape, etc.) are terms of art in environmental law .
These courts also connect the broad terms "contaminant" and "irritant" to
the term they define - "pollutants."64 Under this approach, the key question is whether
a reasonable policyholder would characterize the particular irritant or contaminant at
issue as a "pollutant" under the particular facts of the case.65 For example, in Langone
v. American Family Mutual Insurance Co . the Wisconsin Court of Appeals reasoned
that because carbon monoxide is frequently present in the home and only becomes
dangerous due to ventilation defects causing high concentrations, a reasonable insured
66 An insured "could reasonably expect
may not view carbon monoxide as a "pollutant."
coverage for damages caused by an accumulation of a substance that is routinely
67 The Missouri Court of Appeals used similar reasoning in American
present."
National Property & Casualty Co. v. Wyatt, describing carbon monoxide as
63
See e.g., Koloms, 687 N.E.2d at 81-82; Wyatt, 400 S.W.3d at 426; W. Am.
Ins. Co. v. Tufco Flooring E., Inc., 409 S.E.2d 692, 699-700 (N.C. App. 1991); W. All.
Ins. Co. v. Gill, 686 N.E.2d 997, 999 (Mass. 1997) ("[T]he terms in the pollution
exclusion, such as 'discharge,' 'dispersal,' 'release,' and 'escape,' are terms of art in
environmental law which generally are used with reference to damage or injury caused
by improper disposal or containment of hazardous waste.").
64
See Reg'l Bank of Colo., N.A. v. St. Paul Fire & Marine Ins. Co., 35 F.3d
494, 498 (10th Cir. 1994); Wyatt, 400 S.W.3d at 424-25; Langone v. Am. Fam. Mut.
Ins. Co ., 731 N.W.2d 334, 339-340 (Wis. App. 2007).
65
See Wyatt, 400 S.W.3d at 425 ("It seems far more reasonable that a
policyholder would understand the exclusion as being limited to irritants and
contaminants commonly thought of as pollution and not as applying to every possible
irritant or contaminant imaginable." (quoting Reg'l Bank of Colo., N.A., 35 F.3d at
498)); see also MacKinnon v. Truck Ins. Exch., 73 P.3d 1205, 1216 (Cal. 2003) (quoting
Reg'l Bank of Colo., N.A., 35 F.3d at 498) (same).
66 731 N.W.2d at 340.
67 Id.
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"contextually ambiguous" because it "does not have the harmful effect of an irritant or
contaminant unless or until it accumulates to certain levels."68
The court also observed
that "carbon monoxide poisoning is one of the more significant and well-known risks
69 The court concluded that "[a]bsent clear and
of injury related to homeownership."
unambiguous exclusion of liability for such injuries, a reasonable person purchasing a
homeowners or tenants insurance policy would certainly expect coverage for this risk
70
to be included."
A key distinction between the camps is that courts in the first camp
generally apply a plain meaning approach to insurance contracts. By contrast, most
courts in the second camp apply a doctrine of the insured's reasonable expectations that
is similar to our own. For that reason, we find the analyses in those cases viewing the
specific terms of the exclusion through the lens of the insured's reasonable expectations,
like Wyatt and Langone, most persuasive.
5. Application
In light of the preceding discussion, we conclude that an insured would
reasonably expect coverage for liability for poisoning by carbon monoxide from a
defectively installed water heater. The literal terms of the pollution exclusion are broad,
but the term "pollutants" has a narrower connotation that is reinforced by the clauses
addressing liability for monitoring and detoxification. The specific exclusions for
exposure to lead and asbestos, "pollutants" that are commonly found within the home,
supports an insured's reasonable expectation that harm from exposure to carbon
monoxide, which is also often found within the home and causes no harm absent a
defect or failure, is not an excluded harm.
68
400 S.W.3d at 425 (quoting Langone , 731 N.W.2d at 337).
69
Id. at 426-27.
70
Id. at 427.
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D. We Decline To Address Other Arguments By The Estate.
In its briefing to us, the Estate raises two arguments that go beyond the
scope of the certified question. First, it asks us to rule that Garrison breached its duty
to defend the insureds from the Estate's claims, and therefore that the insurance
company is now precluded from litigating the extent or existence of liability. Second,
it asks us to hold that the "dominant proximate cause doctrine" mandates coverage in
this case. Generally speaking, this doctrine provides that when the dominant cause of
a loss is insured, the insurer may not deny coverage based on an uncovered, secondary
71 The doctrine was relied on to uphold coverage in a recent Washington Supreme
risk.
Court case with facts similar to this one.72
We decline the invitation to go beyond the certified question and express
no opinion on those issues.
CONCLUSION
Our answer to the certified question is that the pollution exclusion in the
homeowners insurance policy issued by Garrison does not exclude coverage for injury
arising out of exposure to carbon monoxide emitted by an improperly installed home
appliance.
71
AS 21.36.096 ("An insurer may not deny a claim if a risk, hazard, or
contingency insured against is the dominant cause of a loss and the denial occurs
because an excluded risk, hazard, or contingency is also in a chain of causes but operates
on a secondary basis.").
72
See Xia v. ProBuilders Specialty Ins. Co., 400 P.3d 1234, 1240-42 (Wash.
2017) (en banc) (applying "efficient proximate cause rule" under Washington law to
conclude policy provided coverage for loss).
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