Summary
The South Dakota Supreme Court considered whether an insurer breached its duty to defend insureds in a pollution-related lawsuit. The court held that the policy's pollution exclusion was unambiguous and that the underlying complaint alleged repeated and continuing discharges, not a sudden and accidental discharge within the exception to the exclusion. The court reversed the circuit court's judgment and directed entry of summary judgment for the insurer, while denying appellate attorney's fees.
Holdings
- The allegations in the underlying complaint asserted property damage resulting from the discharge of pollutants onto land, so the policy's pollution exclusion applied and De Smet met its burden of showing that the alleged claims clearly fell outside basic policy coverage.
- In the context of this policy, "sudden and accidental" is unambiguous and requires both a temporal component—an abrupt or immediate discharge—and an unexpected or unintended component.
- The complaint did not arguably allege a sudden and accidental discharge of pollutants, so De Smet had no duty to defend and did not breach the insurance contract.
- Evidence that a rainstorm may have caused sudden flooding and migration of manure did not create an arguable duty to defend where the underlying complaint alleged long-term, routine, repeated, and continuing discharges.
- The insureds were not entitled to appellate attorney's fees because they identified no statute or rule authorizing an award in the appeal.
Questions Presented
- Whether the allegations in the underlying pollution complaint arguably asserted a claim for property damage arising from the sudden and accidental discharge of pollutants, thereby triggering De Smet's duty to defend.
- Whether the circuit court could rely on evidence from the underlying trial, including testimony concerning a rainstorm and flooding, to find an arguable duty to defend.
- Whether the insureds were entitled to appellate attorney's fees.
Disposition
reversed_and_remanded
Cases Cited (38)
- Alvine Family Limited Partnership v. Hagemann, 2010 S.D. 28, 780 N.W.2d 507(followed as procedural background)
- Auto-Owners Ins. Co. v. Hansen Housing, Inc., 2000 S.D. 13, ¶ 10, 604 N.W.2d 504, 509(followed)
- State Farm Fire & Cas. Co. v. Harbert, 2007 S.D. 107, ¶ 18, 741 N.W.2d 228, 234(followed)
- North Star Mut. Ins. Co. v. Kneen, 484 N.W.2d 908, 912 (S.D. 1992)(followed)
- S.D. State Cement Plant Comm’n v. Wausau Underwriters Ins. Co., 2000 S.D. 116, ¶ 15, 616 N.W.2d 397, 402(followed)
- Hawkeye-Sec. Ins. Co. v. Clifford, 366 N.W.2d 489, 491 (S.D. 1985)(followed)
- State Farm Mut. Auto Ins. Co. v. Wertz, 540 N.W.2d 636, 638 (S.D. 1995)(followed)
- Fireman’s Fund Ins. Cos. v. Ex-Cell-O Corp., 702 F. Supp. 1317, 1328-29 (E.D. Mich. 1988)(persuasive)
- St. Paul Fire and Marine Ins. Co. v. Warwick Dyeing Corp., 26 F.3d 1195, 1200 (1st Cir. 1994)(persuasive)
- Aydin Corp. v. First State Ins. Co., 959 P.2d 1213, 1216-17 (Cal. 1998)(persuasive)
Showing top 10 of 38.
Cited In (0)
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Court Document
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