American Casualty Co. v. Miller (159 Cal. App. 4th 501, 2008)

Opinion

KITCHING, J.

INTRODUCTION

A worker in a public sewer system was seriously injured when a furniture stripping business released methylene chloride into the sewer system where he was working. The trial court granted summary judgment to the insurer of the furniture stripping business on the basis of a pollution exclusion clause contained in a comprehensive general liability policy (the CGL policy). We affirm. The injured worker’s injuries arose from an event commonly thought of as environmental pollution. An ordinary insured would reasonably expect that the release of methylene chloride into a public sewer is environmental pollution. (MacKinnon v. Truck Ins. Exchange (2003) 31 Cal.4th 635 [3 Cal.Rptr.3d 228, 73 P.3d 1205] (MacKinnon).)

FACTUAL AND PROCEDURAL BACKGROUND

1. The Furniture Stripping Business

Defendant and appellant Michael Miller (Miller) owned a furniture stripping business called Stripper Herk located in Santa Monica, California. As part of the business, Stripper Herk generated wastewaters containing solvents, including methylene chloride, and generated hazardous wastes that accumulated in drums on the premises.

The City of Santa Monica (the City) issued Stripper Herk an “Industrial Wastewater Permit—Manufacturing Facility.” The permit allowed Stripper Herk to discharge wastewater from its premises into the City’s sewer. The permit, however, prohibited the discharge of any solvents, including methylene chloride, into the sewer.

2. The CGL Policy

Plaintiff and respondent American Casualty Company of Reading, PA (American Casualty), provided Miller, doing business as Stripper Herk, with a CGL policy, which was effective from April 26, 2002, to April 26, 2003.

Coverage A of the policy provided coverage for bodily injury and property damage with a limit of $1 million per occurrence. Under Coverage A, the policy provided coverage for “those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ ” caused by an occurrence during the policy period. The policy also obligated American Casualty “to defend the insured against any ‘suit’ seeking damages.”

3. The Pollution Exclusion

The CGL policy contained a pollution exclusion clause which provided in pertinent part that Coverage A did not apply to: “(1) ‘Bodily Injury’ or ‘property damage’ arising out of the actual, alleged, or threatened discharge, dispersal, seepage, migration, release or escape of ‘pollutants’: [