ELR Citation: ELR 20932
No(s). 89-1949 (6th Cir. Jun 18, 1990)

The court holds that although Michigan case law precludes continuous or ongoing pollution occurrences from being within the "sudden and accidental" exception to the standard pollution exclusion clause in industrial liability insurance policies, discrete and isolated events that occur over a long time may still fit the exception. Defendant insurance company refused to defend or indemnify the insured in an action, complaining of continuous and ongoing pollution but where evidence also tended to show that the insured's polluting activities consisted of discrete and isolated events occurring over two decades. The court rules that its decision in FL Aerospace v. Aetna Casualty & Surety Co., 20 ELR 20582, establishes the law in Michigan diversity cases for interpreting sudden and accidental pollution occurrences, which includes a temporal element that precludes continuous or ongoing occurrences of pollution from being included in pollution exclusion exceptions. However, the court holds that because conflicting evidence was presented at trial as to whether the pollution occurrences were ongoing and continuous or discrete and isolated events, the district court improperly granted the insurer's motion for summary judgment. In remanding the case to the district court, the court observes that if evidence is presented showing that the discharges of pollutants were discrete polluting events, each short in duration and accidental in nature, the pollution alleged in the underlying action could properly fall within the sudden and accidental exception and would obligate the insurer to defend and indemnify. This is consistent with the Michigan principle of construing ambiguous terms in insurance policies in favor of the insured.

Counsel for Plaintiffs-Appellants
Antoinette Raheem
Honigman, Miller, Schwartz & Cohn
2290 First National Bldg., Detroit MI 48226
(313) 256-7800

Counsel for Defendants-Appellees
Robert Kamenec
900 Marquette Bldg., Detroit MI 48226
(313) 983-4813

Before: BOGGS and NORRIS, Circuit Judges; and EDWARDS, Senior Circuit Judge.