Andersen v. Highland House Co.

[This decision has been published in Ohio Official Reports at 93 Ohio St.3d 547.]

ANDERSEN, ADMR., v. HIGHLAND HOUSE COMPANY ET AL., APPELLANTS;

INDIANA INSURANCE COMPANY, APPELLEE.

[Cite as Andersen v. Highland House Co., 2001-Ohio-1607.]

Insurance—Carbon monoxide emitted from a residential heater is not a

“pollutant” under the pollution exclusion of a commercial general

liability insurance policy unless specifically enumerated as such.

(No. 00-1214—Submitted May 15, 2001—Decided November 14, 2001.)

APPEAL from the Court of Appeals for Cuyahoga County, No. 75769.

__________________

SYLLABUS OF THE COURT

Carbon monoxide emitted from a residential heater is not a “pollutant” under the

pollution exclusion of a commercial general liability insurance policy

unless specifically enumerated as such.

__________________

ALICE ROBIE RESNICK, J.

{¶ 1} On March 7, 1997, Lisa Andersen died and Daniel Wojtala was

injured after inhaling carbon monoxide fumes from a faulty heating unit inside the

Highland House Apartments, a multiunit complex owned by appellant Highland

House Company (“Highland House”) and managed by appellant Renaissance

Management, Inc. (“RMI”). At the time of the accident, Highland House and RMI

were covered by commercial insurance policies issued by appellee Indiana

Insurance Company (“Indiana Insurance”). All of the policies contained pollution

exclusions.

{¶ 2} As a result of Andersen’s death, three lawsuits were filed. In the first

action, Andersen’s estate sued Highland House and RMI for wrongful death. In

the second action, Highland House and RMI sought a declaratory judgment that

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Indiana Insurance had a duty to defend and indemnify them in the wrongful death

action. In the third action, Indiana Insurance sought a declaratory judgment that it

did not have a duty to defend and indemnify Highland House and RMI. All three

cases were consolidated and the underlying tort claims were settled. Thereafter,

the trial court focused on the scope of policy coverage relative to the pollution

exclusions.

{¶ 3} Highland House and RMI moved for summary judgment, arguing that

the pollution exclusion language was ambiguous and should only be construed as

pertaining to environmental pollution. Conversely, Indiana Insurance contended

that the policy language was unambiguous and clearly excluded claims for death

and injuries related to residential carbon monoxide poisoning. The trial court ruled

in favor of Highland House and RMI, and Indiana Insurance appealed. The Eighth

District Court of Appeals reversed, finding that the policies precluded coverage.

The cause is now before this court upon the allowance of a discretionary appeal.

{¶ 4} The issue before us is whether the pollution exclusion language in the

present case precludes coverage for death and injuries stemming from residential

carbon monoxide poisoning. We hold today that Indiana Insurance does have a

duty to defend and indemnify the insureds because the policy language in question

does not clearly, specifically, and unambiguously state that coverage for residential

carbon monoxide poisoning is excluded. We, therefore, reverse the judgment of the

court of appeals.

{¶ 5} A grant of summary judgment is reviewed under a de novo standard.

Doe v. Shaffer (2000), 90 Ohio St.3d 388, 390, 738 N.E.2d 1243, 1245. In order to

resolve the coverage question, we must first review the pollution exclusion policy

language. In pertinent part, the exclusion states:

“2. Exclusions.

“This insurance does not apply to:

“* * *

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“f. Pollution

“(1) ‘Bodily injury’ or ‘property damage’ arising out of the actual, alleged

or threatened discharge, dispersal, seepage, migration, release or escape of

pollutants:

“(a) At or from any premises, site or location which is or was at any time

owned or occupied by, or rented or loaned to, any insured;

“* * *

“Pollutants means any solid, liquid, gaseous or thermal irritant or

contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and

waste.”

{¶ 6} In Dealers Dairy Products Co. v. Royal Ins. Co. (1960), 170 Ohio St.

336, 10 O.O.2d 424, 164 N.E.2d 745, paragraph one of the syllabus, the court

established that “[a] policy of insurance is a contract and like any other contract is

to be given a reasonable construction in conformity with the intention of the parties

as gathered from the ordinary and commonly understood meaning of the language

employed.” (Emphasis added.)

{¶ 7} Indiana Insurance argues that carbon monoxide qualifies as a

“pollutant” in the instant case because it is a “gaseous * * * irritant or contaminant”

and that by definition, it is “a colorless odorless very toxic gas * * * formed as a

product of the incomplete combustion of carbon * * *.” Webster’s Third New

International Dictionary (1986) 336. Indiana Insurance further contends that

Highland House and RMI should have known that deaths and injuries caused by

carbon monoxide poisoning would not be covered based on the general definition

of “pollutants” provided in the policy. However, in Home Indemn. Co. of New York

v. Plymouth (1945), 146 Ohio St. 96, 32 O.O. 30, 64 N.E.2d 248, paragraph two of

the syllabus, this court stated that “[w]here exceptions * * * are introduced into an

insurance contract, a general presumption arises to the effect that that which is not

clearly excluded from the operation of such contract is included in the operation

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thereof.” (Emphasis added.) Thus, Plymouth reasons that if a policy does not

plainly exclude a claim from coverage, then an insured may infer that the claim will

be covered.

{¶ 8} In the case at bar, the policy in question never clearly excludes claims

for deaths or injuries caused by residential carbon monoxide poisoning. It is not

the responsibility of the insured to guess whether certain occurrences will or will

not be covered based on nonspecific and generic words or phrases that could be

construed in a variety of ways. Thus, in order to defeat coverage, “the insurer must

establish not merely that the policy is capable of the construction it favors, but

rather that such an interpretation is the only one that can fairly be placed on the

language in question.” Reiter, Strasser & Pohlman, The Pollution Exclusion Under

Ohio Law: Staying The Course (1991), 59 U.Cin.L.Rev. 1165, 1179. See Lane v.

Grange Mut. Cos. (1989), 45 Ohio St.3d 63, 65, 543 N.E.2d 488, 490 (“Where

provisions of a contract of insurance are reasonably susceptible of more than one

interpretation, they will be construed strictly against the insurer and liberally in

favor of the insured”).

{¶ 9} Furthermore, the genesis of the pollution exclusion does not support

the notion that it was created to preclude the kind of claim involved in this case. In

June 1970, the insurance industry “went on record as being ‘against’ intentional

polluters and promulgated the qualified pollution exclusion for insertion in all

comprehensive general liability (CGL) insurance policies.” (Footnotes omitted.)

Reiter, Strasser & Pohlman, supra, 59 U.Cin.L.Rev. at 1168. The insurance

industry explained that “[a]ccidental pollution continued to be insured under a CGL

policy, but deliberate polluters would remain uncovered, unable to use insurance to

avoid the financial consequences of their acts. On the basis of these representations,

nearly every state, including Ohio, allowed the introduction of this new, qualified

pollution exclusion.” (Footnotes omitted.) Id.

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January Term, 2001

{¶ 10} The exclusion disputed in the case at bar, the absolute pollution

exclusion, “was drafted during the early 1980s and was incorporated into the

standard form CGL [policies] in 1986.” Stempel, Reason and Pollution: Correctly

Construing the “Absolute” Exclusion in Context and in Accord With Its Purpose

and Party Expectations (1998), 34 Tort & Ins.L.J. 1, 5. The purpose of the new

exclusion was “to replace the 1973 ‘sudden and accidental’ exclusion because

insurers were distressed by judicial decisions holding that the 1973 exclusion did

not preclude coverage for gradual but unintentional pollution.” Id. Further, “[t]he

absolute exclusion was designed to bar coverage for gradual environmental

degradation of any type and to preclude coverage responsibility for government-

mandated cleanup[s].” Id.

{¶ 11} Based on the history and original purposes for the pollution

exclusion, it was reasonable for Highland House and RMI to believe that the

policies purchased for their multiunit complex would not exclude claims for injuries

due to carbon monoxide leaks. Thus, since insurance policies are interpreted

strictly against the insurer, “[i]t will not suffice for [Indiana Insurance] to

demonstrate that its interpretation is more reasonable than the policyholder’s.”

Reiter, Strasser & Pohlman, supra, 59 U.Cin.L.Rev. at 1179. See Am. Fin. Corp.

v. Fireman’s Fund Ins. Co. (1968), 15 Ohio St.2d 171, 174, 44 O.O.2d 147, 148,

239 N.E.2d 33, 35 (“[T]he insurer, being the one who selects the language, must be

specific in its use, and an exclusion from liability must be clear and exact in order

to be given effect”).

{¶ 12} The legal effect of the reasonable belief on the part of Highland

House and RMI is comparable to the effect of the reasonable-expectations doctrine.

{¶ 13} The Restatement of the Law 2d, Contracts (1981), Section 211,

Comment f, discusses the ambit of the reasonable-expectations doctrine:

“Terms excluded. * * * Although customers typically adhere to

standardized agreements and are bound by them without even appearing to know

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the standard terms in detail, they are not bound to unknown terms which are beyond

the range of reasonable expectation. * * * Similarly, a party who adheres to the

other party’s standard terms does not assent to a term if the other party has reason

to believe that the adhering party would not have accepted the agreement if he had

known that the agreement contained the particular term. * * * Reason to believe

may be inferred from the fact that the term is bizarre or oppressive, from the fact

that it eviscerates the non-standard terms explicitly agreed to, or from the fact that

it eliminates the dominant purpose of the transaction.”

{¶ 14} While we make no determination on the merits of the reasonable-

expectations doctrine, this rationale could apply to the case at bar. Highland House

and RMI are both involved in the rental property business. A major concern of

these two entities, and many owners and managers of commercial and residential

property, is deaths or injuries caused by carbon monoxide poisoning. To protect

themselves from any potential claims based on that hazard, the two companies were

covered by insurance policies. None of the policies identified carbon monoxide

poisoning as a hazard excluded from coverage. Based on the information given in

the policies, Highland and RMI reasonably believed that Indiana Insurance would

defend and indemnify them against claims related to potential premises hazards and

did not anticipate that such claims would be denied based on the pollution

exclusion.

{¶ 15} Other jurisdictions also recognize the importance of interpreting

ambiguities in insurance contracts in favor of the insured. In Davis v. M.L.G. Corp.

(Colo.1986), 712 P.2d 985, 989, the court, quoting Elliott Leases Cars, Inc. v.

Quigley (1977), 118 R.I. 321, 325-326, 373 A.2d 810, 812, stated: “ ‘If there

remains any doubt, the terms should be read in the sense which the insurer had

reason to believe they would be interpreted by the ordinary reader and purchaser.

The test to be applied is not what the insurer intended by his words, but what the

ordinary reader and purchaser would have understood them to mean.’ ” (Emphasis

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January Term, 2001

added.) In Regional Bank of Colorado, N.A. v. St. Paul Fire & Marine Ins. Co.

(C.A.10, 1994), 35 F.3d 494, 498, the court said that “[w]hile a reasonable person

of ordinary intelligence might well understand [that] carbon monoxide is a pollutant

when it is emitted in an industrial or environmental setting, an ordinary

policyholder would not reasonably characterize carbon monoxide emitted from a

residential heater which malfunctioned as ‘pollution.’ ” Although these cases are

not controlling, they do provide persuasive support for the underlying notion that

this particular policy language is ambiguous and therefore should be interpreted in

favor of the insured. As the final authority on Ohio law, we must take the

opportunity to prevent an absurd and unreasonable result—one that was never

clearly intended by Highland House or RMI and one that was never clearly

communicated by Indiana Insurance. The court in Am. States Ins. Co. v. Koloms

(1997), 177 Ill.2d 473, 492-493, 227 Ill.Dec. 149, 158, 687 N.E.2d 72, 81, best

described the real purpose of the pollution exclusion when it wrote: “Our review of

the history of the pollution exclusion amply demonstrates that the predominate

motivation in drafting an exclusion for pollution-related injuries was the avoidance

of the ‘enormous expense and exposure resulting from the “explosion” of

environmental litigation.’ (Emphasis added.) Weaver [v. Royal Ins. Co. of Am.

(1996)], 140 N.H. [780] at 783, 674 A.2d [975] at 977, quoting Vantage

Development Corp. v. American Environment Technologies Corp., 251 N.J.Super.

516, 525, 598 A.2d 948, 953 (1991). * * * We would be remiss * * * if we were

to simply look to the bare words of the exclusion, ignore its raison d’etre, and apply

it to situations which do not remotely resemble traditional environmental

contamination.” Based on this sound logic, and on other principles stated herein,

we hold that carbon monoxide emitted from a malfunctioning residential heater is

not a pollutant under the pollution exclusion of a comprehensive general liability

policy unless specifically enumerated as such. We, therefore, reverse the judgment

of the court of appeals and reinstate the judgment of the trial court.

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Judgment reversed.

DOUGLAS, F.E. SWEENEY, PFEIFER and LUNDBERG STRATTON, JJ., concur.

DOUGLAS, F.E. SWEENEY and LUNDBERG STRATTON, JJ., concur separately.

MOYER, C.J., and COOK, J., dissent.

__________________

DOUGLAS, J., concurring.

{¶ 16} I concur in the syllabus, judgment, and opinion of the majority. I

write further only to bring attention to evidence in the record that I believe shows

that Indiana Insurance intended these policies to provide coverage for accidents

involving carbon monoxide exposure. This evidence is in the form of an

“Apartment Evaluation Supplement” questionnaire completed by an underwriter

for Indiana Insurance in determining whether to issue insurance policies to

Highland House and RMI. The questionnaire was to be “used by the underwriter

to review * * * all the major underwriting standards important in the determination

if a risk qualifies for [insurance]” and was “meant to alert the underwriter to the

more common elements of underwriting this class of business.” Under the heading

“Premises Liability” the questionnaire asks whether carbon monoxide detectors are

provided in the apartments. (The word “some” was written next to this inquiry on

the questionnaire.) If, as Indiana Insurance asserts, the standard commercial

general liability insurance policy denies coverage for carbon monoxide exposure,

then why would the standard apartment evaluation supplement question whether

carbon monoxide detectors are provided in the apartments and why would the

underwriter feel compelled to answer the question? If carbon monoxide exposure

were not covered, then why would this information be “important in the

determination if a risk qualifies for [insurance]”? I believe that this questionnaire

clearly shows that Indiana Insurance intended its commercial general liability

policies of insurance to provide coverage for carbon monoxide exposure

notwithstanding its pollution exclusion. At a minimum, the underwriter’s request

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January Term, 2001

for this information from a potential insured supports the potential insured’s

reasonable belief that liability for such accidents would be covered by the policy.

F.E. SWEENEY and LUNDBERG STRATTON, JJ., concur in the foregoing

concurring opinion.

__________________

COOK, J., dissenting.

{¶ 17} Today’s majority relies upon questionable analytical foundations in

a strained attempt to find coverage where none exists. I therefore respectfully

dissent for the reasons that follow.

Interpretation of the Pollution Exclusion

{¶ 18} Each of the policy exclusions at bar states, with minor variations in

wording irrelevant to this court’s inquiry, that coverage does not extend to “

‘bodily injury’ or ‘property damage’ arising out of the actual, alleged or threatened

discharge, dispersal, seepage, migration, release or escape of pollutants.” A

“pollutant” is defined as “any solid, liquid, gaseous or thermal irritant or

contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and

waste.”

{¶ 19} Construing this language, the trial court held that the exclusion

applied “only to environmental discharge of traditionally environmental pollutants

and not to cases involving exposure to carbon monoxide produced by a defective

heating unit inside of a residential apartment unit.” The court of appeals rejected

this conclusion, holding that “the pollution exclusion in the insurance contract

issued to the insureds clearly and unambiguously precluded coverage for the claims

asserted by the injured parties.”

{¶ 20} I agree with the reasoning and conclusion of the court of appeals. It

is well settled that “insurance contracts must be construed in accordance with the

same rules as other written contracts.” Hybud Equip. Corp. v. Sphere Drake Ins.

Co., Ltd. (1992), 64 Ohio St.3d 657, 665, 597 N.E.2d 1096, 1102. Therefore, “if

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the language of the policy’s provisions is clear and unambiguous, this court may

not ‘resort to construction of that language.’ ” Id., quoting Karabin v. State Auto.

Mut. Ins. Co. (1984), 10 Ohio St.3d 163, 167, 10 OBR 497, 499, 462 N.E.2d 403,

406. Rather, courts must give the words and phrases used in an insurance policy “

‘their natural and commonly accepted meaning, where they in fact possess such

meaning, to the end that a reasonable interpretation of the insurance contract

consistent with the apparent object and plain intent of the parties may be

determined.’ ” Id., quoting Tomlinson v. Skolnik (1989), 44 Ohio St.3d 11, 12, 540

N.E.2d 716, 717-718.

{¶ 21} Whether the carbon monoxide incident that occurred in this case fits

within the pollution exclusion therefore depends upon the meaning of the exclusion

language. The majority finds that the exclusions contain “nonspecific and generic

words or phrases that could be construed in a variety of ways.” This conclusion,

however, both devalues any suggestion that, absent contrary intent, some words

carry fixed meanings and favors conjuring ambiguity over objectivity.

{¶ 22} The exclusions’ heading is “pollution.” Two natural and commonly

accepted meanings of pollution are “1: the action of polluting [especially] by

environmental contamination with man-made waste; also: the condition of being

polluted 2: POLLUTANT.” (First emphasis added.) Merriam-Webster’s Collegiate

Dictionary (10 Ed.1999) 902. The dictionary definition of a “pollutant” is simply

“something that pollutes.” Id. As noted, the exclusions provide a more detailed

definition of “pollutants.”

{¶ 23} Carbon monoxide fits into both definitions of a pollutant, as its

commonly accepted meaning is “a colorless odorless very toxic gas CO that burns

to carbon dioxide with a blue flame and is formed as a product of the incomplete

combustion of carbon.” (Emphasis added.) Merriam-Webster’s Collegiate

Dictionary, supra, at 171. This definition falls within the exclusion’s definition of

pollution as “any * * * gaseous * * * irritant or contaminant, including * * * vapor,

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January Term, 2001

* * * fumes, * * * [and] chemicals.” One commonly accepted meaning of “vapor”

is “a substance in the gaseous state as distinguished from the liquid or solid state.”

(Emphasis added.) Id. at 1306. Similarly, a “fume” is “a smoke, vapor, or gas

[especially] when irritating or offensive” or “an often noxious suspension of

particles in a gas (as air).” (Emphasis added.) Id. at 472. These are not technical

definitions describing environmental terms of art. The words are neither

“nonspecific” nor “generic.” Rather, these are common words bearing commonly

accepted meanings available to any layperson. Therefore, I conclude both that

carbon monoxide falls within the foregoing definition of a “pollutant” and that the

policies clearly exclude coverage.

{¶ 24} Courts construing Ohio law have reached similar conclusions

regarding pollution exclusions. See Zell v. Aetna Cas. & Sur. Ins. Co. (1996), 114

Ohio App.3d 677, 683 N.E.2d 1154 (pollution exclusion precluded coverage for

fumes from weatherproofing materials); Air Prods. & Chems. v. Indiana Ins. Co.

(Dec. 23, 1999), Hamilton App. Nos. C-980947 and C-990009, unreported, 2000

WL 955600, at *6 (pollution exclusion precluded coverage for methane gas leak);

Owners Ins. Co. v. Singh (Sept. 21, 1999), Richland App. No. 98-CA-108,

unreported, 1999 WL 976249, at *3 (pollution exclusion was clear and

unambiguous so as to preclude coverage for carbon monoxide from a

malfunctioning furnace). See, also, Longaberger Co. v. United States Fid. & Guar.

Co. (S.D.Ohio 1998), 31 F.Supp.2d 595, affirmed (C.A.6, 1999), 201 F.3d 441

(unpublished disposition), opinion at 1999 WL 1252874 (both holding that under

Ohio law a similar pollution exclusion was not ambiguous and precluded coverage

for carbon monoxide released into a home by a furnace).

{¶ 25} Courts in other jurisdictions have reached the same conclusion

regarding the scope of such pollution exclusions. See, e.g., Deni Assoc. of Florida,

Inc. v. State Farm Fire & Cas. Ins. Co. (Fla.1998), 711 So.2d 1135, 1138, quoting

Am. States Ins. Co. v. F.H.S., Inc. (S.D.Miss.1991), 843 F.Supp. 187, 190 (“The

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court reiterates that it is not free to rewrite the terms of the insurance contract where

that contract is not ambiguous”); W. Am. Ins. Co. v. Band & Desenberg

(M.D.Fla.1996), 925 F.Supp. 758, 761 (“The majority of courts that have reviewed

these absolute [pollution] exclusions have found them to be unambiguous and have

enforced then in accordance with their plain language”). See, also, 9 Russ &

Segalla, Couch on Insurance (3 Ed.1997) 127-36 to 127-37, Section 127:14, fn. 30

(collecting cases that have found “absolute” pollution exclusions unambiguous),

and 127-39, Section 127:15 (noting that the majority view regards such exclusions

as unambiguous). Accordingly, I would hold that the pollution exclusions at issue

herein clearly and unambiguously preclude coverage.

Historical Context of the Exclusion

{¶ 26} The majority relies upon “the genesis of the pollution exclusion” to

conclude that “[b]ased on the history and original purposes for the pollution

exclusion, it was reasonable for Highland House and RMI to believe that the

policies purchased for their multiunit complex would not exclude claims for injuries

due to carbon monoxide leaks.” Without citing a basis for doing so, the majority

apparently credits Highland House and RMI as having had knowledge of the

historical development of absolute pollution exclusions at the time they purchased

the relevant policies and accepts this as informing the relevant policy language. But

Indiana Insurance argues that Highland House and RMI failed to produce summary

judgment evidence in the record supporting this “historical context” argument.

{¶ 27} By focusing on supposed after-the-fact knowledge of the insureds,

the majority narrows the meaning of the pollution exclusions beyond that conveyed

by the common understanding of the words. The policy language itself, however,

offers no reason to eschew the dictionary uses of these common words in favor of

discerning the meaning from the historical development of pollution exclusions.

The text of the policy exclusions guides judicial interpretation. Nothing in the text

of the policies limits application of the exclusions to environmental-type pollution.

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January Term, 2001

{¶ 28} Instead, as noted, the exclusions contain ordinary words that on their

face bear the broad application understood by the court of appeals here. To collapse

the exclusions’ broad meaning in the way the majority does contradicts axiomatic

contract principles. See Hybud Equip. Corp., 64 Ohio St.3d at 665, 597 N.E.2d at

1102 (court cannot engage in construction of policy language when language is

clear and unambiguous). See, also, Madison Constr. Co. v. Harleysville Mut. Ins.

Co. (1996), 451 Pa.Super. 136, 144, 678 A.2d 802, 806 (declining to divine the

public policy behind an exclusion where “the policy language is clear and

unambiguous” and where such an exercise would “ ‘convolute the plain

meaning of a writing merely to find an ambiguity,’ ” quoting O’Brien Energy Sys.,

Inc. v. Am. Employers’ Ins. Co. [1993], 427 Pa.Super. 456, 462, 629 A.2d 957,

960).

Reasonable-Expectations Doctrine

{¶ 29} Despite the foregoing substantive deficiencies, the majority

nonetheless finds the effect of Highland House’s and RMI’s alleged history-based

belief “comparable to the effect of the reasonable-expectations doctrine.” While

then professing to “make no determination on the merits of the reasonable-

expectations doctrine,” the majority proceeds in the following pages to find that the

doctrine’s rationale could apply to the case at bar. Such dicta serve only to confuse

the state of insurance law in Ohio.

{¶ 30} In its earliest formation, the reasonable-expectations doctrine arose

from two principles: that “an insurer will be denied any unconscionable advantage

in an insurance transaction,” and that “the reasonable expectations of applicants and

intended beneficiaries [of an insurance policy] will be honored.” Keeton, Insurance

Law Rights at Variance With Policy Provisions (Part One) (1970), 83 Harv.L.Rev.

961. See, also, Keeton, Insurance Law Rights at Variance With Policy Provisions

(Part Two) (1970), 83 Harv.L.Rev. 1281. Courts have disagreed over the scope

and operation of this doctrine. See, generally, Swisher, A Realistic Consensus

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Approach to the Insurance Law Doctrine of Reasonable Expectations (2000), 35

Tort & Ins.L.J. 729; Henderson, The Doctrine of Reasonable Expectations in

Insurance Law After Two Decades (1990), 51 Ohio St.L.J. 823; Ware, A Critique

of the Reasonable Expectations Doctrine (1989), 56 U.Chi.L.Rev. 1461.

{¶ 31} Some courts, for example, adhere to the belief that the doctrine

operates in instances of ambiguity, permitting a court to grant coverage “if ‘the

policyholder, upon reading the contract language is led to a reasonable expectation

of coverage.’ ” Meridian Mut. Ins. Co. v. Kellman (C.A.6, 1999), 197 F.3d 1178,

1183, quoting Fire Ins. Exchange v. Diehl (1996), 450 Mich. 678, 687, 545 N.W.2d

602, 606; Max True Plastering Co. v. United States Fid. & Guar. Co. (Okla.1996),

912 P.2d 861, 868-869. See, also, Ware, 56 U.Chi.L.Rev. at 1467-1468, fn. 32

(collecting cases using this approach). Other courts have adopted a more expansive

understanding of the doctrine in which “even an unambiguous policy may be

‘interpreted according to the reasonable expectations of the insured.’ ” (Emphasis

added.) Nelson v. Becton (C.A.8, 1991), 929 F.2d 1287, quoting Atwater Creamery

Co. v. W. Natl. Mut. Ins. Co. (Minn.1985), 366 N.W.2d 271, 277. See, also, Ware,

56 U.Chi.L.Rev. at 1469-1472, fn. 40 (collecting cases adopting a “fine-print”

approach in which terms buried in a policy will not be enforced when they conflict

with an insured’s reasonable expectations) and 1472-1475, fn. 54 (collecting cases

adopting a “whole-transaction” approach in which courts will also consider

insurers’ marketing patterns and general practices in deciding whether policy terms

should be enforced). This court has mentioned the doctrine recently in Davidson v.

Motorists Mut. Ins. Co. (2001), 91 Ohio St.3d 262, 269-270, 744 N.E.2d 713, 719.

{¶ 32} Setting aside the curious technique of devoting several pages of an

opinion to a doctrine that the opinion expressly declines to rely upon, it is unclear

what form of the rejected doctrine the majority finds potentially applicable to this

case. The majority cites both Highland House’s and RMI’s alleged belief of

coverage (without record evidence) and “the importance of interpreting ambiguities

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January Term, 2001

in insurance contracts in favor of the insured.” If the majority were confident in its

decision that the exclusions are indeed ambiguous, it is equally unclear why the

majority would resort to discussing parties’ beliefs when Ohio already recognizes

that courts shall construe ambiguous insurance contract language in favor of the

insured and strictly against the insurer. See, e.g., Faruque v. Provident Life & Acc.

Ins. Co. (1987), 31 Ohio St.3d 34, 31 OBR 83, 508 N.E.2d 949, syllabus.

{¶ 33} In any event, I would not reach the questions of the applicability and

the scope of the reasonable-expectations doctrine here because the facts of this case

would not support it. That is, even if Highland House and RMI subjectively

believed that coverage would extend to a carbon monoxide leak, such an

expectation must nonetheless have been objectively reasonable under the doctrine.

And given that the language employed in the pollution exclusion on its face is not

limited to environmental-type pollution, I would conclude that this subjective

expectation of coverage is not objectively reasonable under the terms of the

policies.

{¶ 34} For the foregoing reasons, I would hold that the pollution exclusions

in the insurance policies preclude coverage. Because Indiana Insurance was

entitled to judgment as a matter of law, I would affirm the judgment of the court of

appeals.

MOYER, C.J., concurs in the foregoing dissenting opinion.

__________________

Benesch, Friedlander, Coplan & Aronoff, LLP, David W. Mellot and Mark

D. Tucker, for appellants.

Green & Green and Thomas M. Green, for appellee.

Robert P. Rutter, urging reversal for amicus curiae Ohio Academy of Trial

Lawyers.

Davis & Young and David J. Fagnilli, urging affirmance for amicus curiae

Insurance Environmental Litigation Association.

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Baker, Dublikar, Beck, Wiley & Mathews and James P. Hanratty, urging

affirmance for amicus curiae Ohio Association of Civil Trial Attorneys.

__________________

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