Insurance Co. of Illinois v. Stringfield: Lead-Based Paint - Insurance Pollution Exclusion Does Not Prevent Coverage
For two years, a young child, Lawrence Willis, and his mother Gloria lived in a Chicago apartment owned by Katalina Stringfield (the "Owner"). The Insurance Company of Illinois ("ICI") sold the Owner a general liability insurance policy covering the property. Gloria Willis filed a lawsuit alleging that Lawrence suffered lead poisoning because he had consumed lead-based paint and plaster which had separated from various exposed surfaces of the property. ICI claimed it had no duty to defend or indemnify the Owner, stating that the insurance policy contained a pollution exclusion which precluded coverage for this type of claim. The trial court agreed with ICI and ruled in its favor.
On appeal, the Appellate Court of Illinois explained that for an insurance company to rely on an exclusionary clause in a policy to deny coverage, that clause must be very clear, because any doubt as far as coverage will be resolved to the benefit of the insured. Ambiguous language is construed in the insured’s favor. The court began by examining the relevant portions of the ICI insurance policy, which states that the policy does not apply "(1) to bodily injury or property damage arising out of the actual, alleged or threatened discharge, dispersal, release or escape of pollutants: (a) at or from premises owned, rented or occupied by the named insured." Also, under the policy, "pollutants" are defined as "any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed."
The court considered the policy’s definition of "pollutant" and whether the lead-based paint in the apartment constitutes a "contaminant" under that definition. Applying the plain, ordinary meaning, it concluded that the term "contaminant" could be interpreted in more than one way and it was unclear whether it includes lead-based paint. In addition, the court stated that the plain, ordinary meaning of the word "pollutant" does not include lead-based paint. "A common understanding of a pollutant is a substance that ‘pollutes’ or renders impure a previously unpolluted object, as when chemical wastes leach into a clean water supply." Since the court found the insurance policy ambiguous, it construed it in favor of the insured - the Owner - and therefore, the court held that the pollution exclusion contained in the ICI policy did not preclude coverage for the child’s injuries. While courts in other jurisdictions, including Wisconsin, New York, New Hampshire, Maryland and Massachusetts have held that the same standard pollution exclusion language as that in the ICI policy does not preclude coverage for a child’s injuries arising from ingestion of lead-based paint, the courts applied a variety of analyses to arrive at this conclusion.
While this does not mean that ICI definitely will have to defend or indemnify the Owner, it does mean that the pollution exclusion clause itself does not prevent coverage. The appellate court reversed the trial court decision and remanded the case for further proceedings consistent with its findings.
Insurance Co. of Illinois v. Stringfield, 226 Ill. Dec. 525, 685 N.E.2d 980 (Ill. Ct. App. 1997)