Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-94-04120/USCOURTS-ca10-94-04120-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 

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PUBLISH 

UNITED STATES COURT OF 

TENTH CIRCUIT 

QUAKER STATE MINIT-LUBE, INC., 

Plaintiff-Appellant, 

vs. 

FIREMAN'S FUND INSURANCE COMPANY, 

THE AMERICAN INSURANCE COMPANY, 

NATIONAL SURETY CORPORATION, 

LIBERTY MUTUAL INSURANCE COMPANY, 

CONTINENTAL INSURANCE COMPANY, 

UNIGARD INSURANCE COMPANY, 

Defendants-Appellees. 

FILED . United States Court of Appca~ 

Tenth Circuit 

APPEALS 

APR 18 1995 

PATRICK FISHER 

Clerk 

No. 94-4120 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF UTAH 

(D.C. No. 91-C-461-J) 

Wiley E. Mayne (Steven W. Black with him on the brief), of Holland 

and Hart, Denver, Colorado, for Plaintiff-Appellant. 

Daniel A. Bartoldus of Rivkin, Radler & Kremer, Uniondale, New 

York, Barbara K. Berrett of Richards Brandt Miller & Nelson, Salt 

Lake City, Utah, (Lawrence A. Levy and Abbe L. Koplitz of Rivkin, 

Radler & Kremer, Uniondale, New York, Mark J. Williams of Hanson 

Epperson & Smith, Salt Lake City, Utah, Ford G. Scalley and John 

E. Hansen of Scalley & Reading, Salt Lake City, Utah, with them on 

the brief), for Defendants-Appellees. 

Before SEYMOUR, Chief Judge, ALDISERT,* and BALDOCK, Circuit 

Judges. 

BALDOCK, Circuit Judge. 

* The Honorable Ruggero J. Aldisert, Senior United States 

Circuit Judge for the Third Circuit, sitting by designation. 

Appellate Case: 94-4120 Document: 01019282513 Date Filed: 04/18/1995 Page: 1 
Plaintiff Quaker State Minit-Lube, Inc. filed this federal 

diversity action for a declaratory judgment against Defendants 

Fireman's Fund Insurance Company, American Insurance Company, 

National Surety Corporation, Liberty Mutual Insurance Company, 

Continental Insurance Company, and Unigard Insurance Company, 

seeking a determination that Defendants were obligated to defend 

and indemnify Plaintiff for environmental clean-up costs. 

Plaintiff appeals the district court's entry of summary judgment 

in favor of Defendants. We exercise jurisdiction under 28 U.S.C. 

§ 1291 and affirm. 

The district court set forth the undisputed facts underlying 

this controversy in Quaker State Minit-Lube, Inc. v. Fireman's 

Fund Ins. Co., 868 F. Supp. 1278 (D. Utah 1994); we restate, 

however, the facts relevant to the instant appeal. Plaintiff owns 

and operates a number of automobile service centers which provide 

simple vehicle maintenance, including engine oil changes. The 

service centers drain used engine oil into holding tanks for 

periodic sale to re-refiners or recyclers. Between 1977 and 1985, 

Plaintiff sold the used oil to Ekotek, Inc., which operated a 

facility in Salt Lake City, Utah (the "Ekotek Site") to recycle or 

re-refine used automobile and industrial oils. Ekotek reprocessed 

the used oil into lubricating products for resale. 

In the ordinary course of business between Plaintiff and 

Ekotek, Ekotek collected used oil from holding tanks at service 

centers operated by Plaintiff and transported the used oil to 

storage tanks at the Ekotek Site for later re-refining. At its 

site, Ekotek stored approximately 500,000 gallons of liquid 

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Appellate Case: 94-4120 Document: 01019282513 Date Filed: 04/18/1995 Page: 2 
containing hazardous substances in sixty above-ground storage 

tanks ranging from 2,900 gallons to 87,000 gallons, and in 475 

drums and 1,500 smaller containers. The Ekotek Site also included 

three surface impoundments, piles and pits of waste material, 

underground tanks, and an underground drain field. 

Unbeknownst to Plaintiff, prior to 1977 and during the years 

it conducted business with Ekotek, unknown amounts of used oil and 

other wastes were released onto the ground at the Ekotek Site, 

significantly contaminating the soil, surface water, and ground 

water. The record depicts numerous incidents, accidents, and 

practices at the Ekotek Site which resulted in discharges of used 

oil and other contaminants. Two accidents in the loading and 

unloading of Union Pacific Rail Road cars discharged approximately 

12,000 gallons of used oil. The majority of the used oil went 

underground in a trench designed to collect rainwater runoff from 

the rail siding. In 1981, between 6,000 and 10,000 gallons of 

used oil and approximately 700 gallons of motor oil additive were 

discharged onto the ground during a fire at the Ekotek Site. 

Prior to 1967, acid sludge produced in the re-refining 

process was discharged into a pit at the Ekotek Site, and was not 

subsequently removed. Beginning in November 1980, acid sludge was 

dumped directly on the ground in a different large, unlined, 

earthen pit. Acid sludge would remain in the pit up to a month 

before it was transported off site. Ekotek continued this cycle 

of dumping then disposing of acid sludge until at least 1985. 

Spent clay used in the.re-refining process accumulated on the 

ground at the Ekotek Site before it was periodically hauled away. 

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Appellate Case: 94-4120 Document: 01019282513 Date Filed: 04/18/1995 Page: 3 
Deposition testimony of former refinery employees depicted 

frequent accidental discharges of used oil and other substances at 

the Ekotek Site, including tank overflows from operator error, 

truck spills from driver error, and leaks from faulty equipment. 

Alex Bloomfield recalled significant tank spills each year he 

worked at Ekotek between 1978 and 1985. Keith Hitesman testified 

that waste oil would overflow onto the bare ground during the 

unloading process, and stated that in 1984 a hose pulled away when 

unloading, spilling 50 to 100 gallons of used oil. Hitesman also 

recalled a 2,000 to 3,000 gallon spill during a transfer in the 

containment area that contaminated the soil. James Blaser stated 

that in 1985 there was a large spill when a manhole was left off a 

tank and used oil flowed down the side of the tank and across the 

ground to the other end of the Ekotek Site. Blaser also recalled 

two or three incidents when water in the hot oil in tank 52 caused 

accidental overflows of approximately 500 gallons. Further, 

Blaser stated that he did not recall any year when there was not 

an accidental spill or mishap at the Ekotek Site. 

Scott Adair recalled runovers in the processing area at the 

Ekotek Site in 1980 or 1981 that released so much used oil that 

the spills flowed across the street. Adair remembered overflow 

incidents once or twice annually between 1978 and 1983 when acid 

sludge was loaded onto trucks. The spills released approximately 

500 to 2,000 gallons of oil and acid mixture on to the ground that 

flowed down the road. During cold weather, Adair stated that 

employees transferring sludge from a tank to a truck would go 

inside to warm up while the sludge drained into the truck. At 

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Appellate Case: 94-4120 Document: 01019282513 Date Filed: 04/18/1995 Page: 4 
times, the sludge would overflow "and it would be a river [of acid 

treated oil] running along that roadway." 

Other former Ekotek employees testified that the inferior and 

outdated equipment used to recycle the used oil persistently 

discharged contaminants on the Ekotek Site. Plate and frame 

filters would regularly "squirt oil all over the place" during 

daily operations. Broken or leaking process equipment was not 

repaired or replaced unless absolutely necessary. Leaky pumps 

were a facet of eve~day operations. 

Plant operators and supervisors stated that the ongoing 

failure of employees during the period of 1967 to 1988 to keep the 

site clean contributed to the contamination. Specifically, 

employees failed to empty buckets of oil, pump oil from catch 

basins, clean spilled oil, and prevent oil leaks from trucks, 

pumps, and other machinery. 

Employees testified that oily water regularly and routinely 

ran over from tanks, valves, dump trucks, catch basins, and 

earthen berms, and leaked onto the bare earth. Back-ups of oily 

water in the east tank area and in the wrecking yard occurred 

systematically. Further, frequent oil overflows contaminated the 

soil in two large retention areas in the northwest portion of the 

Ekotek Site. 

As a consequence of the numerous discharges of pollutants 

which occurred during the years the Ekotek Site was in operation, 

the soil, surface water, and ground water on or near the site 

became significantly contaminated with oil and other toxic 

substances. In 1988, the United States Environmental Protection 

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Appellate Case: 94-4120 Document: 01019282513 Date Filed: 04/18/1995 Page: 5 
Agency ("EPA") conunenced response activities involving the Ekotek 

Site pursuant to its authority under the Comprehensive 

Environmental Response, Compensation, and Liability Act of 1980 

("CERCLA"), 42 U.S.C. §§ 9601-9657, amended by Superfund 

Amendments and Reauthorization Act of 1986, Pub. L. 99-499, 100 

Stat. 1613 (1986). The EPA designated the Ekotek Site a CERCLA 

facility pursuant to 42 U.S.C. § 9601(9) because of contamination 

by hazardous substances as defined by 42 U.S.C. § 9601(a) (14), and 

ultimately placed the Ekotek Site on the National Priorities List 

or "Superfund List." See 40 C.F.R. § 300, App. B, at 214 (1994). 

By February 1992, the EPA had formally identified 470 entities, 

including Plaintiff, as potentially responsible parties ("PRPs"), 

and informed the PRPs that they may be liable for response costs1 

incurred during the EPA's cleanup efforts at the Ekotek Site. 

Plaintiff, and a number of other businesses identified by the 

EPA as PRPs under CERCLA, formed the Ekotek Site Remediation 

Conunittee, which has funded the clean-up activities at the Ekotek 

Site pursuant to a consent decree entered with the EPA. As of 

January 15, 1993, the Conunittee has expended approximately 

$10,000,000.00 to cover response costs for the Ekotek Site. 

Further, the record reflects that total response and clean-up 

costs for the Ekotek Site may exceed $60,000,000.00. 

1 CERCLA imposes liability for response costs, including 

removal, remedial, investigatory, and "any other necessary costs" 

on "any person who by contract, agreement, or otherwise arranged 

for disposal or treatment, or arranged with a transporter for 

transport for disposal or treatment, of hazardous substances owned 

or possessed by such person, by any other party or entity, at any 

facility or incineration vessel owned or operated by another party 

or entity and containing such hazardous substances." 42 u.s.c. 

§9607(3). 

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Appellate Case: 94-4120 Document: 01019282513 Date Filed: 04/18/1995 Page: 6 
In order to defray a portion of its liability for the 

clean-up of the Ekotek Site, Plaintiff sought coverage from 

Defendant insurance companies that had sold it insurance policies 

during the years Plaintiff conducted business with Ekotek. 

Between 1980 and 1986, Plaintiff purchased various comprehensive 

general liability ("CGL") policies and primary garage liability 

policies from Defendants. The relevant coverage language in each 

policy is substantially similar, and obligates Defendants to 

defend and indemnify Plaintiff for liability claims for damages 

based on bodily injury or property damage caused by an occurrence. 

The policies define an occurrence as: "an accident, including 

continuous or repeated exposure to conditions, which results in 

bodily injury or property damage neither expected nor intended 

from the standpoint of the insured." Each policy also includes a 

qualified pollution exclusion clause which excludes coverage for: 

[B]odily injury or property damage arising out of the 

discharge, dispersal, release or escape of smoke, 

vapors, soot, fumes, acids, alkalis, toxic chemicals, 

liquids or gasses, waste materials or other irritants, 

contaminants or pollutants into or upon land, the 

atmosphere or any water course or body of water; but 

this exclusion does not apply if such discharge. 

dispersal, release or escape is sudden and accidental. 

(Emphasis added). Simply put, the clause excludes coverage for a 

pollution discharge which causes bodily injury or property damage 

unless the discharge is "sudden and accidental." 

On March 17, 1992, Plaintiff filed its second amended 

complaint seeking a declaratory judgment to enforce Defendants' 

obligations to provide coverage up to the liability limits set 

forth in each policy and arising from the response costs that had 

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Appellate Case: 94-4120 Document: 01019282513 Date Filed: 04/18/1995 Page: 7 
occurred and would occur in connection with the clean up of the 

Ekotek Site. Plaintiff and Defendants filed cross-motions for 

summary judgment. Plaintiff sought summary judgment on the 

grounds it had established, inter alia, the basic elements of 

coverage under the relevant terms of the policies, and that 

Defendants had failed to show that the pollution exclusion clause 

excluded coverage. Defendants sought summary judgement on the 

grounds that they had established, inter alia, that coverage was 

precluded to Plaintiff because the contamination resulted from a 

repetitive and continuous pattern of polluting activity over a 

thirty-year period at the Ekotek Site, and thus the discharges did 

not fall within the "sudden and accidental" exception to the 

pollution exclusion clause. 

On March 21, 1994, the district court, inter alia, granted 

summary judgment for Defendants, finding that they were not 

obligated to defend or indemnify Plaintiff for the clean-up costs 

incurred at the Ekotek Site because the pollution exclusion clause 

barred coverage for the claims at issue. Quaker State Minit-Lube, 

Inc., 868 F. Supp. at 1332. Specifically, the district court 

ruled "that the pattern of frequent, even routine occurrences 

involving the release or discharge of hazardous waste upon or into 

the ground at the Ekotek Site . . . cannot fairly be described as 

'sudden and accidental.'" Id. at 1329. Because the spills and 

leaks were common place events which occurred in the ordinary 

course of daily business at the Ekotek Site, the district court 

held that the discharges were not, as a matter of law, "sudden and 

accidental" despite the fact that some individual discharges, 

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Appellate Case: 94-4120 Document: 01019282513 Date Filed: 04/18/1995 Page: 8 
considered in isolation, were both sudden and accidental. Id. at 

1331-32. Consequently, because the discharges did not fall within 

the "sudden and accidental" exception, the district court ruled 

that the pollution exclusion clause relieved Defendants of the 

obligation to defend or indemnify Plaintiff for costs incurred in 

cleaning up the Ekotek Site. This appeal followed. 

On appeal, Plaintiff maintains the district court erred by 

entering summary judgment in favor of Defendants. Specifically, 

Plaintiff contends the district court erred by: (1) improperly 

resolving an issue of material fact by concluding the numerous 

discrete discharges formed a pattern of discharges that were not 

"sudden and accidental"; (2) refusing to grant summary judgment in 

its favor although individual discharges were both "sudden and 

accidental"; (3) viewing the discharges from the perspective of 

the polluter rather than the perspective of the insured to 

determine if the releases were "sudden and accidental"; and (4) 

relying on policy as opposed to insurance law to grant summary 

judgment in favor of Defendants. 

"We review the district court's grant of summary judgment de 

novo, applying the same legal standard used by the district 

court." Frandsen v. Westinghouse Corp., 46 F.3d 975, 977 (lOth 

Cir. 1995). Summary judgment is proper only if "the pleadings, 

depositions, answers to interrogatories, and admissions on file, 

together with the affidavits, if any, show that there is no 

genuine issue as to any material fact and that the moving party is 

entitled to a judgment as a matter of law." Fed. R. Civ. P. 

56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 

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Appellate Case: 94-4120 Document: 01019282513 Date Filed: 04/18/1995 Page: 9 
(1986); Frandsen, 46 F.3d at 977. "All facts and reasonable 

inferences must be construed in the light most favorable to the 

nonmoving party." Allen v. Minnstar. Inc., 8 F.3d 1470, 1476 

(lOth Cir. 1993); see also Anderson v. Liberty Lobby. Inc., 477 

u.s. 242, 247 (1986). 

The issue presented in the instant case is narrow: whether 

the numerous pollution discharges over the years at the Ekotek 

Site were "sudden and accidental" within the meaning of the 

exception to the pcllution exclusion clause. In a case where 

jurisdiction is founded on diversity, we apply the law of the 

forum state. See Broderick Inv. Co. v. First Affiliated Sec., 

Inc., 912 F.2d 1238, 1241 (lOth Cir. 1990), cert. denied, 113 

S. Ct. 189 (1992). To date, the Utah Supreme Court has not 

addressed this issue of Utah state law. Thus, our duty is to 

determine, as best we can, how this issue would be resolved by the 

Utah Supreme Court, see Cincinnati Ins. Co. v. Flanders Elec. 

Motor Serv., 40 F.3d 146, 150 (7th Cir. 1994); Armijo v. Ex Cam, 

Inc., 843 F.2d 406, 407 (lOth Cir. 1988), by considering "state 

court decisions, decisions of other states, federal decisions, and 

the general weight and trend of authority." Armijo, 843 F.2d at 

407. "We review de novo the district court's rulings with respect 

to state law." Allen, 8 F.3d at 1476 (citing Salve Regina College 

v. Russell, 499 U.S. 225 (1991)). 

In Hartford Accident & Indem. Co. v. U.S. Fidelity and Guar. 

Co., 962 F.2d 1484 (lOth Cir.), cert. denied, 113 S. Ct. 411 

(1992), we construed "sudden and accidental" under Utah law "to 

mean temporally abrupt and unexpected or unintended." Id. at 

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Appellate Case: 94-4120 Document: 01019282513 Date Filed: 04/18/1995 Page: 10 
1486. In so doing, we rejected the reasoning of courts that have 

concluded that the phrase "sudden and accidental" is ambiguous 

because the term "sudden" functions as a synonym of "accidental."2 

We think the "annexation" of "sudden" to "accidental" is 

precisely the issue: reading "sudden" without a temporal 

component renders "accidental" redundant. While both 

conditions might include "unexpected" or "unintended," 

"sudden" cannot mean "gradual," "routine" or 

"continuous." ... Giving effect to every provision 

obliges us to construe "sudden" and "accidental" as 

separate, conditional requirements for coverage. 

2 The interpretation of the phrase "sudden and accidental" 

within the pollution exclusion clause has split the courts. See 

St. Paul Fire and Marine Ins. Co. v. Warwick Dyeing Corp, 26 F.3d 

1195, 1200 (1st Cir. 1994) (discussing split of authority). 

Generally, state courts divide on whether the term "sudden" in the 

phrase "sudden and accidental" is ambiguous because "sudden" 

arguably means "unexpected" or "unintended," both synonyms of 

"accidental," in addition to "abrupt" or "quick." Jurisdictions 

that conclude "sudden" is ambiguous generally interpret the phrase 

"sudden and accidental" in favor of the insured to mean 

"unexpected and unintended," but not "abrupt or quick and 

unexpected or unintended." See id. The highest courts of 

Colorado, Georgia, Illinois, New Jersey, Washington, West 

Virginia, and Wisconsin have ruled that the term "sudden" is 

ambiguous when read in conjunction with "accidental," and thus 

does not mean "abrupt" or "quick." See Hecla Mining Co. v. New 

Hampshire Ins. Co., 811 P.2d 1083 (Colo. 1991); Claussen v. Aetna 

Casualty & Sur. Co., 380 S.E.2d 686 (Ga. 1989); Outboard Marine 

Co. v. Liberty Mut. Ins. Co., 607 N.E.2d 1204 (Ill. 1992); Morton 

Int'l, Inc. v. General Accident Ins. Co., 629 A.2d 831 (N.J. 

1993), cert. denied, 114 S. Ct. 2764 (1994); Queen City Farms. 

Inc. v. Aetna Casualty & Sur. Co., 882 P.2d 703 (Wash. 1994); Joy 

Technologies, Inc. v. Liberty Mut. Ins. Co., 421 S.E.2d 493 (W. 

Va. 1992); Just v. Land Reclamation. Ltd., 456 N.W.2d 570 (Wis. 

1990). Courts that have concluded "sudden and accidental" means 

"unexpected and unintended" without reference to a temporal 

element of "abrupt" or "quick" interpret the pollution exclusion 

clause in favor of the insured, and conclude that instances of 

gradual or continuous pollution are "unexpected and unintended," 

and thereby within the exception to the pollution exclusion 

clause. ~, Queen City Farms, 882 P.2d at 721, 725; Hecla 

Mining Co., 811 P.2d at 1092; see also Sharon M. Murphy, Note, The 

"Sudden and Accidental" Exception to the Pollution Exclusion 

Clause in Comprehensive General Liability Insurance Policies: The 

Gordian Knot of Environmental Liability, 45 Vand. L. Rev. 161, 179 

(1992). 

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Appellate Case: 94-4120 Document: 01019282513 Date Filed: 04/18/1995 Page: 11 
Id. at 1489. Consequently, we ruled that the phrase "sudden and 

accidental" is unambiguous, and "means abrupt or quick and 

unexpected or unintended in the context of Utah law." Id. at 

1492. Thus, we concluded that "continuous or routine discharges 

of pollutants are not covered" within the "sudden and accidental" 

exception to the pollution exclusion clause because continuous 

discharges are not temporally abrupt or quick. Id. at 1486, 1492. 

As we observed in Hartford, the lead Utah state case on the 

issue supported our conclusion that "sudden and accidental" 

unambiguously means "abrupt and unexpected or unintended." In 

Gridley Assocs. v. Transamerica Ins. Co., 828 P.2d 524 (Utah Ct. 

App. 1992), the Utah Court of Appeals ruled that the pollution 

exclusion exception applied to a series of gasoline discharges 

caused by a clean break in an underground gasoline line. Noting 

that it was a case of first impression for a Utah appellate court, 

the court ruled that the term "sudden" in the phrase "sudden and 

accidental" has a plain, clear, unambiguous meaning of "immediacy, 

abruptness, and quickness." Id. at 527. Because the clean break 

in the gasoline line "resulted in an unexpected as well as an 

immediate and abrupt flow of gasoline from the severed line every 

time the pump was activated," the court concluded that the 

discharge was "sudden" under the insurance policy at issue. Id. 

Thus, the Utah Court of Appeals affirmed the entry of summary 

judgment in favor of the insured. 

We revisited the meaning of "sudden and accidental" under 

Utah law in Anaconda Minerals Co. v. Stoller Chern. Co., 990 F.2d 

1175 (lOth Cir. 1993). In Anaconda, we restated that "sudden and 

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Appellate Case: 94-4120 Document: 01019282513 Date Filed: 04/18/1995 Page: 12 
accidental" is unambiguous under Utah law, and means "abrupt or 

instantaneous" and "unexpected or unintended." Id. at 1177-78. 

Thus, we ruled that discharges of flue dust from a fertilizer 

plant that were continuous and gradual over a number of years were 

not "sudden and accidental" within the meaning of the insurance 

policy at issue. Id. at 1179. 

Our determination in Hartford and Anaconda that "sudden and 

accidental" unambiguously means "abrupt or quick and unexpected or 

unintended" under Utah law comports with the rulings of many state 

courts3 and the majority of federal courts4 that have faced the 

issue. Thus, under Utah law continuous, routine, or gradual 

discharges of pollutants are not "abrupt" or "quick" and thereby 

3 See Dimmitt Chevrolet, Inc. v. Southeastern Fidelity Ins. 

Corp., 636 So.2d 700 (Fla. 1993); Lumbermens Mut. Casualty Co. v. 

Belleville Indus., Inc., 555 N.E.2d 568 (Mass. 1990); Upjohn Co. 

v. New Hampshire Ins. Co., 476 N.W.2d 392 (Mich. 1991); Board of 

Regents of the University of Minn. v. Royal Ins. Co., 517 N.W.2d 

888 (Minn. 1994); Waste Management of the Carolinas. Inc. v. 

Peerless Ins. Co., 340 S.E.2d 374 (N.C. 1986); Hybud Equip. Corp. 

v. Sphere Drake Ins. Co., 597 N.E.2d 1096 (Ohio 1992), cert. 

denied, 113 S. Ct. 1585 (1993). 

4 See Cincinnati Ins. Co. v. Flanders Elec. Motor Serv., 40 

F.3d 146, 153-54 (7th Cir. 1994) (Indiana law); Aeroguip Corp. v. 

Aetna Casualty and Sur. Co., 26 F.3d 893, 894 (9th Cir. 1994) 

(California law); United States Fidelity & Guar. Co. v. Morrison 

Grain Co., 999 F.2d 489, 493 (lOth Cir. 1993) (Kansas law); Aetna 

Casualty & Sur. Co. v. General Dynamics Corp., 968 F.2d 707, 710 

(8th Cir. 1992) (Missouri law); Northern Ins. Co. v. Aardvark 

Assocs .. Inc., 942 F.2d 189, 193-94 (3d Cir. 1991) (Pennsylvania 

law); A. Johnson & Co. v. Aetna Casualty & Sur. Co., 933 F.2d 66, 

72 (1st Cir. 1991) (Maine law); New York v. AMRO Realty Corp., 936 

F.2d 1420, 1428 (2d Cir. 1991) (New York law); United States 

Fidelity & Guar. Ins. Co. v. Murray Ohio Mfg. Co., 875 F.2d 868 

(6th Cir. 1989) (construing Tennessee law by affirming district 

court in memorandum opinion); United States Fidelity & Guar. Co. 

v. Star Fire Coals, Inc., 856 F.2d 31, 34-35 (6th Cir. 1988) 

(Kentucky law); Great Lakes Container Corp. v. National Union Fire 

Ins. Co., 727 F.2d 30, 33-34 (1st Cir. 1984) (New Hampshire law). 

But see New Castle County v. Hartford Accident & Indem. Co., 933 

F.2d 1162, 1198-99 (3d Cir. 1991) (Delaware law). 

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Appellate Case: 94-4120 Document: 01019282513 Date Filed: 04/18/1995 Page: 13 
not "sudden" within the meaning of "sudden and accidental." See 

Anaconda, 990 F.2d at 1179; Hartford, 962 F.2d at 1489, 1492. 

Other courts have similarly determined that numerous discrete 

discharges of pollutants during routine business operations form a 

pattern of discharges that are not "sudden and accidental," and 

thereby not within the exception to the pollution exclusion 

clause.5 Additionally, the fact that individual discharges may 

have occurred both suddenly and accidentally when viewed in 

isolation does not alter the conclusion that the overall pattern 

5 See Flanders Elec. Motor Serv., 40 F.3d at 154 ("Because 

these releases of PCBs were commonplace events which occurred in 

the course of [the insured's] regular business, they cannot be 

considered sudden and accidental.") (Indiana law); Smith v. Hughes 

Aircraft Co., 22 F.3d 1432, 1438 (9th Cir. 1993) ("Therefore, 

under California law, non-sudden, continuous pollution does not 

qualify as an exception to the pollution exclusion in this 

case."); Morrison Grain Co, 999 F.2d at 493 (coverage was 

precluded under Kansas law where "discharge was not sudden and 

accidental, but a gradual dispersal or release of toxic chemicals 

or waste materials"); A. Johnson & Co., 933 F.2d at 75 n.14 ("It 

_seems beyond peradventure that the contamination of the site arose 

due to the continuing waste disposal practices of the McKin 

Company over a long period of time, and, as a concomitant of its 

regular business activity, falls squarely within the 'pollution 

exclusion' and was not 'sudden and accidental.'") (Maine law); 

Star Fire Coals, 856 F.2d at 35 ("Thus, we believe that such 

pollution exclusion clauses apply to the release of wastes and 

pollutants taking place on a regular basis or in the ordinary 

course of business.") (Kentucky law); Great Lakes Container, 727 

F.2d at 33 (ruling that discharge was not sudden and accidental 

under New Hampshire law where pollution occurred "as a concomitant 

of [the insured's] regular business activity"). 

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Appellate Case: 94-4120 Document: 01019282513 Date Filed: 04/18/1995 Page: 14 
of discharges was not "sudden and accidental."6 Simply put, 

courts should not engage in a microanalysis of discrete discharges 

which are claimed to be "sudden and accidental" when the 

discharges otherwise arise as commonplace events which occur in 

the course of daily business.? 

The United States District Court for the Middle District of 

Florida addressed a factual situation similar to the instant case 

in Industrial Indem. Ins. Co. v. Crown Auto Dealerships. Inc., 731 

F. Supp. 1517 (M.D. Fla 1990). In Crown Auto Dealerships, the 

insured, an operator of two automobile dealerships, performed 

engine oil changes for its customers. Crown Auto sold the used 

oil to Peak Oil Company, an oil recycler. Unbeknownst to Crown 

Auto, activities at Peak Oil Company's recycling facility from the 

mid-1950's until it closed in 1986 had contaminated the soil and 

groundwater in the area. Contamination resulted from the storage 

of used oil in sludge ponds, and "accidental spills and leaks of 

6 See Flanders Elec. Motor Serv., 40 F.3d at 154 ("The fact 

that one or more of these spills or leaks may have occurred 

suddenly and accidentally does not alter our conclusion."); 

Hughes Aircraft Co., 22 F. 3d at 1438 ("The district c.ourt properly 

rejected Hughes' effort to 'break down its long-term waste 

practices into temporal components in order to find coverage where 

the evidence unequivocally demonstrates that the pollution was 

gradual.'"); Ray Indus., 974 F.2d at 768 (rejecting the insured's 

argument that each release in an ongoing pattern of releases "was 

sudden, when viewed in isolation" because "under this theory, all 

releases would be sudden; one can always isolate a specific moment 

at which pollution actually enters the environment"); A. Johnson & 

Co., 933 F.2d at 75 ("Mere speculation under these circumstances 

that any individual instance of disposal, including leaks, 

occurred 'suddenly' cannot contradict a reasonable reading of the 

allegations that the entire pattern of conduct was not a 'sudden 

and accidental' occurrence."). 

7 See. e.g., Ray Indus., 974 F.2d at 768; A. Johnson & Co., 933 

F.2d at 75. 

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used oil and other substances at the site," and "surface runoff of 

contaminants from the process area and sludge retention ponds 

during precipitation events." Id. at ·1521. When the EPA 

identified Crown Auto as a PRP, Crown Auto sought coverage in a 

declaratory judgment action from the insurance company that had 

sold it a CGL policy with a pollution exclusion clause identical 

to the clause at issue in the instant case. Id. at 1518-19. The 

district court first determined that "sudden and accidental" means 

"abrupt" and "unexpected or unintended" under Florida law. Id. at 

1520. The district court concluded that because the discharges of 

pollutants were routine events in Peak Oil's regular business 

operations, the releases were not "sudden and accidental": 

These spills and leaks appear to be common place 

events which occurred in the course of daily business, 

and therefore cannot, as a matter of law, be classified 

as "sudden and accidental." That is, these "occasional 

accidental spills" are recurring events that took place 

in the usual course of recycling the oil. 

Id. at 1521. Consequently, the district court entered summary 

judgment in favor of the insurance company, finding that the 

pollution exclusion clause barred coverage for the contamination 

at the Peak Oil site. Id. at 1522. 

On appeal in Crown Auto, the Eleventh Circuit certified the 

issue to the Florida Supreme Court. Indus. Indem. Ins. Co. v. 

Crown Auto Dealerships. Inc., 935 F.2d 240 (11th Cir. 1991). The 

Florida Supreme Court held that the pollution damage at the Peak 

Oil site was not within the scope of the CGL insurance coverage. 

Dimmitt Chevrolet. Inc. v. Southeastern Fidelity Ins. Corp., 636 

So.2d 700 (Fla. 1993). In so doing, the court quoted the analysis 

of the district court and concluded, "[w]ith respect to the 

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pollution which resulted from oil spills and leaks at the site as 

well as from occasional runoff of contaminated rain water, we 

agree with the analysis of the federal district judge in this 

case." Id. at 705. Thus, the Florida Supreme Court concluded 

that the recurring discharges made during the usual course of 

business at the Peak Oil site did not fall within the ambit of the 

"sudden and accidental" exception to the pollution exclusion 

clause. Id. 

The undisputed facts in the instant case compel a similar 

result. The contamination at the Ekotek Site resulted from years 

of storage practices and accidents with used oil that released 

pollutants into the soil, surface water, and ground water. Based 

on the record before us, including the deposition testimony of 

former Ekotek employees, spills, leaks, accidents, and other 

mishaps with used oil were frequent and familiar occurrences at 

the Ekotek Site. Because the accidental spills, leaks, and other 

releases were routine and commonplace events which occurred during 

regular business operations at the Ekotek Site, the discharges 

cannot as a matter of law be considered "sudden and accidental." 

~, Flanders Elec. Motor Serv., 40 F.3d at 154; A. Johnson & 

Co., 933 F.2d at 75 n.14; Crown Auto Dealerships, 731 F. Supp. at 

1521. 

Further, the fact that individual discharges viewed in 

isolation may have occurred suddenly and accidentally does not 

alter our conclusion that the spills, leaks, and accidents that 

released used oil at the Ekotek Site were routine events which 

occurred as a concomitant of regular business operations, and 

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thereby were not "sudden and accidental." See Flanders Elec. 

Motor Serv., 40 F.3d at 154 ("The fact that one or more of these 

spills or leaks may have occurred suddenly and accidentally does 

not alter our conclusion."); Hughes Aircraft Co., 22 F.3d at 1438 

("The district court properly rejected Hughes' effort to 'break 

down its long-term waste practices into temporal components in 

order to find coverage where the evidence unequivocally 

demonstrates that the pollution was gradual.'"). Thus, we reject 

Plaintiff's argument that the district court should have, 

seriatim, considered each discharge in isolation to determine 

whether it was "sudden and accidental." See Ray Indus., 974 F. 2d 

at 768-69 ("[U]nder this theory, all releases would be sudden; one 

can always isolate a specific moment at which pollution actually 

enters the environment."). We therefore conclude the district 

court did not err in granting summary judgment against Plaintiff 

when it determined that based on the undisputed facts the numerous 

discrete discharges formed a pattern that was not "sudden and 

accidental."8 

Finally, the district court did not err when it viewed the 

discharges from the viewpoint of the actual polluter, i.e., 

Ekotek, as opposed to the viewpoint of Plaintiff to determine if 

the discharges were "sudden and accidental." The pollution 

exclusion clause does not require that the insured make the 

"discharge, dispersal, release or escape" of contaminants. 

8 Because we conclude the district court properly entered 

summary judgment in favor of Defendants based on sound legal 

principles, we reject Plaintiff's argument that the district court 

improperly relied on policy considerations in resolving this 

dispute. 

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Rather, the plain language of the clause excludes coverage for 

"bodily injury or property damage arising out of the discharge" 

regardless of whether the insured actively caused or intended the 

discharge. Thus, "[w]hat the insured intends or foresees is of no 

consequence." Morrison Grain Co., 999 F.2d at 493; accord Warwick 

Dyeing Corp., 26 F.3d at 1202 ("We thus see nothing in the policy 

to indicate that the exclusion is limited to discharges by the 

insured."); Aardvark Assocs., 942 F.2d at 194. We therefore 

reject Plaintiff's argument that the district court improperly 

viewed the discharges at the Ekotek Site from the perspective of 

the polluter rather than the perspective of the insured when it 

determined that the releases were not "sudden and accidental." 

In sum, we believe the Utah Supreme Court would, if presented 

with this record, conclude that the recurring spills, leaks, and 

accidents with used oil at the Ekotek Site were not "abrupt or 

quick and unexpected or unintended," and thereby not "sudden and 

accidental" within the meaning of the pollution exclusion clause. 

Because the contamination of the Ekotek Site was not "sudden and 

accidental," but resulted from recurring spills and leaks in the 

usual course of recycling used oil at the Ekotek Site, the 

pollution exclusion clauses in the insurance polices at issue bar 

coverage for Plaintiff's property damage claims. Accordingly, we 

AFFIRM the district court's entry of summary judgment in favor of 

Defendants. 

AFFIRMED. 

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