Jump to Navigation
Jump to Content

State v. Underwriters at Lloyd's London

ELR Citation: 37 ELR 20004
Nos. No. E037627, (Cal. App. 4th Dist., 12/28/2006)

An appellate court reversed a lower court decision holding that insurers need not indemnify the state for damage caused to third parties due to the discharge of pollutants from the Stringfellow Acid Pits waste disposal site. The trial court granted summary judgment in favor of the insurers based on exclusions in their policies for liability based on pollution and on the discharge of pollutants into a watercourse. But the record raised a triable issue as to whether the discharge fell within the sudden and accidental exception to the pollution exclusion clause. In addition, the watercourse exclusion fails to specify whether a discharge that enters a watercourse and from there pollutes the land falls within the exclusion. Because it is ambiguous, the language should be construed in favor of the insured and expand coverage to a discharge that damages the soil, even if the discharge initially enters a watercourse. When the language is construed that way, there is at least a triable issue as to whether the exclusion applies.