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Doe Run Resources Corp. v. Lexington Insurance Co.

ELR Citation: 43 ELR 20136
Nos. 12-3498, (8th Cir., 06/13/2013)

The Eighth Circuit held that pollution exclusion clauses preclude an insurance company's duty to defend a lead producer in an underlying lawsuit alleging damages stemming from the release of hazardous wastes or toxic substances, but they do not preclude coverage in a lawsuit alleging that the lead producer distributed toxic substances for use as fill material and for use on roads, streets, and buildings. The case involves two lawsuits. In the first lawsuit, the plaintiffs asserted classic claims for damages caused by environmental pollution, all of which were covered by the policy's absolute pollution exclusion. The insurer, therefore, has no duty to defend. The second lawsuit alleged similar claims, and to the extent it alleged bodily injury or property damage resulting from the release of hazardous wastes or toxic substances, the pollution exclusions again bar coverage. But the complaint also alleged that the lead producer distributed lead fragments and other toxic substances into the community for use as fill material and for use on roads, streets, alleyways, driveways, in the foundation of homes and buildings, and even for use in children's sandboxes. But "distribute" is not among the transitive verbs that trigger the pollution exclusion, as it does not entail a "release." The second lawsuit also alleged that the producer caused bodily injury or property damage when it left one of its piles open and available for use by the general public without posting warning signs about the dangers of lead exposure. These allegations do not reference a release; rather, plaintiffs alleged that they came to the pollutants. The pollution exclusion clauses, therefore, do not apply to these claims.