Insured's Summary Judgment Based on Ambiguous Language Reversed
The Arkansas Supreme Court reversed summary judgment granted to the insured based on ambiguous language in State Auto Prop. & Cas. Ins. Co. v. The Arkansas Dept. of Environmental Quality, No. 06-1480 (6/14/07).
This case is centered upon gasoline pollution at the Harbor General Store in Mt. Ida, Arkansas. In 2001, Harbor purchased an insurance policy from State Auto. The policy contained an exclusion for pollution-related damage. In 2004, the ADEQ discovered a substantial leak in Harbor's fuel-dispensing system. Adjacent property owners, through their living trust, filed a lawsuit in Montgomery County and obtained a $750,000 judgment against Harbor.
State Auto filed a lawsuit in Pulaski County seeking a declaration that it had no liability on the judgment against Harbor. The trust moved for summary judgment on grounds that the definition of "pollutant" was ambiguous. The trial court granted the motion, claiming the same definition was deemed ambiguous in Minerva Enterprises, Inc. v. Bituminous Cas. Corp., 851 S.W. 2d 403 (Ark. 1993) and Anderson Gas & Propane, Inc. v. Westport Ins. Corp., 140 S.W.3d 504 (Ark.App. 2004).
On appeal, State Auto urged the court to reverse Minerva, arguing that the majority of jurisdictions have held the pollution exclusion language to be unambiguous. The court rejected this argument. However, the court did reverse because, unlike the insurer in Minerva, State Auto submitted numerous exhibits to explain the ambiguous terms. It is important to note that the court just instructed the trial court to consider State Auto's exhibits; the summary judgment motion is still live on remand.
