#25757-rev & rem-JKK 

2011 S.D. 39

IN THE SUPREME COURT 

OF THE 

STATE OF SOUTH DAKOTA 

* * * * 

FLOYD DEMARAY and 

JAMES HAGEMANN, Plaintiffs and Appellees, 

v. 

DE SMET FARM MUTUAL 

INSURANCE COMPANY, Defendant and Appellant. 

* * * * 

APPEAL FROM THE CIRCUIT COURT OF 

THE THIRD JUDICIAL CIRCUIT 

LAKE COUNTY, SOUTH DAKOTA 

* * * * 

HONORABLE TIM D. TUCKER 

Judge 

* * * * 

MARK V. MEIERHENRY 

WILLIAM BLEWETT of 

Meierhenry & Sargent, LLP Attorneys for plaintiffs 

Sioux Falls, South Dakota and appellees. 

LARRY M. VON WALD of 

Beardsley, Jensen and Von Wald, Prof. LLC Attorneys for defendant 

Rapid City, South Dakota and appellant. 

* * * * 

 ARGUED ON MARCH 23, 2011 

 OPINION FILED 07/20/11 
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KONENKAMP, Justice. 

[¶1.] Insureds sued their insurance company for breach of its duty to defend 

in a pollution suit. The circuit court granted summary judgment for the insureds, 

ruling that it appeared from the face of the complaint brought by a third party 

against the insureds that the alleged claim, if true, fell within policy coverage, and 

therefore, the insurance company breached its duty to defend. On appeal, we 

reverse because the policy language is unambiguous, and the complaint asserted no 

claim that would arguably invoke coverage. 

Background 

[¶2.] On July 16, 2007, the Alvine Family Limited Partnership brought suit 

against Floyd Demaray and James Hagemann for negligence, res ipsa loquitur, 

nuisance, and trespass, alleging “repeated tortious activity in discharging of 

pollutants into lakes and streams” on Alvine’s property. The complaint also averred 

that Hagemann’s cattle operation, which is on land leased by Demaray, 

“intermittently ha[d] discharged and will continue to discharge animal and other 

wastes and process waste water” into lakes and streams on Alvine’s property. 

According to Alvine, “[t]he recreational, aesthetic and environmental interests [of 

its property] are being and will be adversely affected by [Hagemann’s] past and 

continuing illegal discharges.” Alvine sought an injunction banning any discharge 

of further pollutants, an order requiring Demaray and Hagemann to clean the 

water, and compensatory and punitive damages. 

[¶3.] Demaray and Hagemann own separate, but identical, insurance 

policies with De Smet Farm Mutual Insurance Company. On July 23, 2007, 
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Demaray and Hagemann notified De Smet of Alvine’s lawsuit. The next day De 

Smet gave notice by mail of its intent to decline defense of the suit. It asserted that 

it owed no duty to defend under the insurance contract because the alleged injury 

arose out of “the discharge, dispersal, release, or the escape of pollutants into or 

upon land, water or air.” Demaray and Hagemann obtained their own defense 

counsel. They defended the matter through trial, where a jury ruled in their favor. 

We affirmed in Alvine Family Limited Partnership v. Hagemann, 2010 S.D. 28, 780 

N.W.2d 507. 

[¶4.] In March 2010, Demaray and Hagemann sued De Smet alleging that 

the company breached its duty to defend them in the Alvine lawsuit. They sought 

indemnification for all costs and fees incurred as a result. On stipulated facts, both 

sides moved for summary judgment. While acknowledging that the insurance 

contract contains a pollution exclusion, Demaray and Hagemann argued that an 

exception to the exclusion invoked De Smet’s duty to defend. That exception covers 

“bodily injury or property damage arising out of the sudden and accidental 

discharge, dispersal, release or escape into or upon land . . . of pollutants used in or 

intended for use in normal and usual farming activities[.]” Relying on this same 

language, De Smet asserted that the alleged pollution was not from a “sudden and 

accidental” discharge, but from intermittent and repeated discharges, as stated in 

the Alvine complaint. 

[¶5.] The circuit court ruled that the Alvine complaint alleged a claim that, 

if proved true, would have fallen within the exception’s coverage. Thus, the court 

held that De Smet owed Demaray and Hagemann a duty to defend. It granted 
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Demaray and Hagemann’s motion for summary judgment. De Smet appeals 

asserting that the allegations in the Alvine complaint did not give rise to a duty to 

defend under the insurance policy. 

Analysis and Decision 

[¶6.] De Smet maintains that the circuit court erred when it interpreted the 

Alvine complaint to allege a claim for pollution discharge that was “sudden and 

accidental.” Because the Alvine complaint used words such as “intermittently,” 

“repeated,” “past,” and “continuing,” De Smet argues that such language cannot be 

construed to mean Alvine arguably alleged a claim for a “sudden and accidental” 

discharge or release. Moreover, De Smet faults the court for considering certain 

evidence from the Alvine trial in support of its decision. In that trial, testimony was 

given that a sudden rainstorm caused flooding and washed manure onto Alvine’s 

property. The court relied on this testimony to find support in the Alvine complaint 

that a sudden and unexpected pollution occurred. But De Smet contends that the 

focus must be on the initial discharge, not any subsequent migration of the 

pollution. 

[¶7.] Demaray and Hagemann contend that the Alvine complaint arguably 

asserted a cause of action for a sudden and accidental discharge. In their view, the 

Alvine complaint failed to allege that the discharges were intentional, thus it is 

immaterial that the words “intermittently,” “repeated,” and “continuing” were used. 

They claim that because the complaint alleged a cause of action for negligence, De 

Smet owed a duty to defend. Demaray and Hagemann also contend that the court 
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was entitled to consider the facts established at the underlying trial, which support 

that the alleged pollution was the result of a sudden and unexpected event. 

[¶8.] Statutory construction and insurance contract interpretation are 

questions of law reviewable de novo. Auto-Owners Ins. Co. v. Hansen Housing, Inc., 

2000 S.D. 13, ¶ 10, 604 N.W.2d 504, 509 (citations omitted). To ascertain whether a 

duty to defend exists we look to the complaint and “other evidence of record.” State 

Farm Fire & Cas. Co. v. Harbert, 2007 S.D. 107, ¶ 18, 741 N.W.2d 228, 234 (quoting

North Star Mut. Ins. Co. v. Kneen, 484 N.W.2d 908, 912 (S.D. 1992)); see also S.D. 

State Cement Plant Comm’n v. Wausau Underwriters Ins. Co., 2000 S.D. 116, ¶ 15, 

616 N.W.2d 397, 402. An insurer’s duty to defend is much broader than its duty to 

provide coverage. S.D. State Cement Plant Comm’n, 2000 S.D. 116, ¶ 15, 616 

N.W.2d at 402 (citation omitted). The duty to defend need only arguably appear on 

the face of the pleadings. Hawkeye-Sec. Ins. Co. v. Clifford, 366 N.W.2d 489, 491 

(S.D. 1985). Assuming the allegations in the complaint are true, if an alleged claim 

falls within policy coverage, a duty to defend exists. Id. Any doubts should be 

resolved in favor of the insureds. Id.

[¶9.] Demaray and Hagemann argue that De Smet has the burden of 

proving that (1) there was no duty to defend because the claims in the Alvine 

complaint clearly fall outside policy coverage, and (2) the exception to the policy 

exclusion did not apply. De Smet, on the other hand, asserts that Demaray and 

Hagemann bear the burden of proving that the exception to the exclusion invoked 

its duty to defend. Our case law is clear, the insurer bears the burden of proving 

that the allegations in the complaint clearly fall outside policy coverage, and 
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therefore, there is no duty to defend. State Farm Fire & Cas. Co., 2007 S.D. 107, ¶ 

18, 741 N.W.2d at 234 (quoting State Farm Mut. Auto Ins. Co. v. Wertz, 540 N.W.2d 

636, 638 (S.D. 1995)). However, if the insurer meets that burden, and the insured 

alleges that an exception applies, the insured bears the burden of proving that 

coverage exists through the exception. Fireman’s Fund Ins. Cos. v. Ex-Cell-O Corp., 

702 F. Supp. 1317, 1328-29 (E.D. Mich. 1988); see also St. Paul Fire and Marine Ins. 

Co. v. Warwick Dyeing Corp., 26 F.3d 1195, 1200 (1st Cir. 1994); Aydin Corp. v. 

First State Ins. Co., 959 P.2d 1213, 1216-17 (Cal. 1998). 

[¶10.] Here, the policies issued by De Smet to Demaray and Hagemann cover 

“property damage caused by an occurrence to which this coverage applies.” 

Coverage L – Personal Liability. Further, De Smet “will defend a suit seeking 

damages if that suit resulted from . . . property damage not excluded under this 

coverage.” Id. De Smet argues that its pollution exclusion precluded coverage. 

That exclusion provides: “This policy does not apply to . . . property damage which 

results directly or indirectly from . . . the discharge, dispersal, release, or the escape 

of pollutants into or upon land, water or air.” EXCLUSIONS THAT APPLY TO 

COVERAGE L – PERSONAL LIABILITY, 19. The Alvine complaint alleged 

property damage resulting from the discharge of pollutants onto its land, which 

means Exclusion 19 applies. Therefore, De Smet has met its burden of proving that 

the alleged claims clearly fall outside policy coverage. 

[¶11.] Nonetheless, Demaray and Hagemann argue that an exception to the 

exclusion arguably implicates coverage. That exception provides: “Exclusion 19 . . . 

will not apply to . . . property damage arising out of the sudden and accidental 
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discharge, dispersal, release or escape . . . of pollutants used in or intended for use 

in the normal and usual farming activities on the insured premises.” Limited Farm 

Pollution Liability Coverage Endorsement. Therefore, if the Alvine complaint 

alleged a claim for discharge of pollutants that was arguably sudden and accidental, 

De Smet owed Demaray and Hagemann a duty to defend. 

[¶12.] The phrase “sudden and accidental” is not defined in the insurance 

policy. Neither have we defined this phrase. And while several courts in other 

jurisdictions have interpreted similar policy language, there is no prevailing view. 

Moreover, a review of the cases reveals that many turn on unique facts and 

procedural implications. Yet there are essentially two views espoused by the courts. 

The first approach concludes that “sudden and accidental” is ambiguous because 

“sudden” is essentially a synonym for “accidental,” both meaning unintended or 

unexpected, even though “sudden” also means “abrupt” or “immediate.”1 With this 

ambiguity, courts interpret the phrase “sudden and accidental” favorably for the 

insured, concluding that it means “unintended or unexpected” and not abrupt or 

immediate.

1. Hecla Mining Co. v. N. H. Ins. Co., 811 P.2d 1083, 1092 (Colo. 1991); 

Claussen v. Aetna Cas. & Sur. Co., 380 S.E.2d 686, 688 (Ga. 1989); Outboard 

Marine Co. v. Liberty Mut. Ins. Co., 607 N.E.2d 1204, 1218 (Ill. 1992); Morton 

Int’l, Inc. v. Gen. Accident Ins. Co., 629 A.2d 831, 871-72 (N.J. 1993); Queen 

City Farms, Inc. v. Cent. Nat’l Ins. Co., 882 P.2d 703, 720-21 (Wash. 1994); 

Just v. Land Reclamation, Ltd., 456 N.W.2d 570, 573 (Wis. 1990). 
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[¶13.] The second approach includes a temporal component by defining 

“sudden” as abrupt or immediate.2 These courts do not find the phrase “sudden and 

accidental” ambiguous simply because the word “sudden” has multiple dictionary 

definitions or because it is a synonym for accidental. See Cincinnati Ins. Co. v. 

Flanders Elec. Motor Serv., Inc., 40 F.3d 146, 152 (7th Cir. 1994) (“The existence of 

multiple dictionary definitions does not compel the conclusion that a term is 

ambiguous.”). Rather, to these courts, the word “sudden” must be examined in 

context with the insurance policy at issue. As one court explained, “The use of the 

conjunctive in the phrase ‘sudden and accidental’ indicates the drafters’ intent to 

define the two words differently, stating two separate requirements.” Sylvester 

Bros. Dev. Co. v. Great Cent. Ins. Co., 480 N.W.2d 368, 375 (Minn. Ct. App. 1992). 

Therefore, “[i]f ‘sudden’ meant ‘unexpected,’ ‘sudden’ would become superfluous and 

repetitious in the policies’ use of the phrase ‘sudden and accidental.’” Id.

2. Cincinnati Ins. Co. v. Flanders Elec. Motor Serv., 40 F.3d 146, 152-54 (7th 

Cir. 1994); Smith v. Hughes Aircraft Co., 22 F.3d 1432, 1437-38 (9th Cir. 

1994); Anaconda Minerals Co. v. Stoller Chem. Co., 990 F.2d 1175, 1178-79 

(10th Cir. 1993); Bureau of Engraving, Inc. v. Federal Ins. Co., 5 F.3d 1175, 

1177 (8th Cir. 1993); N. Ins. Co. v. Aardvark Assocs., Inc., 942 F.2d 189, 193-

94 (3d Cir. 1991); A. Johnson & Co. v. Aetna Cas. & Sur. Co., 933 F.2d 66, 72-

73 (1st Cir. 1991); New York v. AMRO Realty Corp., 936 F.2d 1420, 1428 (2d 

Cir. 1991); U.S. Fidelity & Guar. Co. v. Star Fire Coals, Inc., 856 F.2d 31, 34-

35 (6th Cir. 1988); Headley v. St. Paul Fire & Marine Ins. Co., 712 F. Supp. 

745, 748 (D.S.D. 1989); Dimmitt Chevrolet, Inc. v. Se. Fidelity Ins. Corp., 636 

So.2d 700, 704 (Fla. 1993); Lumbermens Mut. Cas. Co. v. Belleville Indus., 

Inc., 555 N.E.2d 568, 572 (Mass. 1990); Upjohn Co. v. N. H. Ins. Co., 476 

N.W.2d 392, 397 (Mich. 1991); Bd. of Regents of the Univ. of Minn. v. Royal 

Ins. Co., 517 N.W.2d 888, 892 (Minn. 1994); Hybud Equip. Corp. v. Sphere 

Drake Ins. Co., Ltd., 597 N.E.2d 1096, 1102-03 (Ohio 1992). 
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[¶14.] From our review of the divergent cases, we are persuaded by those 

courts finding “sudden and accidental” unambiguous. Recognizing that “sudden” 

has multiple dictionary definitions, we construe “sudden” in the context of “sudden 

and accidental” as used in this insurance contract.3 Such interpretation leads us to 

deduce that “sudden” has a temporal meaning. To conclude otherwise effectively 

eliminates the word “sudden” from the policy. It is our duty to construe an 

insurance contract according to its plain meaning. Am. Family Mut. Ins. v. Elliot, 

523 N.W.2d 100, 102 (S.D. 1994). If Demaray and Hagemann establish that the 

Alvine complaint arguably alleged property damage arising from the abrupt or 

immediate and unexpected or unintended discharge of pollutants, De Smet 

breached its duty to defend.4

 (continued . . .) 

3. Webster’s dictionary defines the adjective “sudden” as (1) “happening, 

coming, made, or done quickly, without warning, or unexpectedly”; (2) 

“occurring without transition from the previous form, state, etc.; abrupt[.]” 

Webster’s Encyclopedic Unabridged Dictionary of the English Language, 

1420 (1994). 

4. De Smet argues that the only “discharge” this Court should look to is the 

initial discharge of pollutants onto Demaray and Hagemann’s land, and “not 

the movement of the manure from the cattle operation to Alvine’s land.” As 

support, however, De Smet only cites cases involving industrial waste 

dumping, where the insured intentionally discharged pollutants onto land, 

which later caused property damage. See LaFarge Corp. v. Travelers Indem. 

Co., 118 F.3d 1511 (11th Cir. 1997); Transamerica Ins. Co. v. Duro Bag Mfg. 

Co., 50 F.3d 370 (6th Cir. 1995); St. Paul Fire & Marine Ins. Co. v. Warwick 

Dyeing Corp., 26 F.3d 1195 (1st Cir. 1994); Hyde Athletic Indus., Inc. v. Cont’l 

Cas. Co., 969 F. Supp. 289 (E.D. Pa. 1997); Upjohn Co. v. Aetna Cas. & Sur. 

Co., 850 F. Supp. 1342 (W.D. Mich. 1993); Travelers Cas. & Sur. Co. v. 

Superior Court, 75 Cal. Rptr. 2d 54 (Cal. Ct. App. 1998); Standun, Inc. v. 

Fireman’s Fund Ins. Co., 73 Cal. Rptr. 2d 116 (Cal. Ct. App. 1998). Because 

the facts of this case are not similar to industrial waste dumping (i.e., the 

release of animal waste as a biological process), we decline to address De 
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__________________ 

(. . . continued) 

[¶15.] The Alvine complaint sought various forms of damages and costs for 

Demaray and Hagemann’s “repeated tortious activity in discharging of pollutants” 

onto Alvine’s property. (Emphasis added.) The complaint asserted that the lakes 

and drainage are “and will be adversely affected by [Demaray and Hagemann’s] 

past and continuing illegal discharges.” (Emphasis added.) In its fact section, 

Alvine claimed that Demaray and Hagemann “intermittently have discharged and 

will continue to discharge animal and other waste and process waste water from 

[Hagemann’s] operation into the lakes and drainages located” on Alvine’s property. 

(Emphasis added.) 

[¶16.] Specifically related to its negligence cause of action, Alvine alleged 

that Demaray and Hagemann breached their duty to operate their production in a 

“safe, competent and prudent manner.” This breach, Alvine contended, has “carried

on and will carry on . . . and will continue to cause [Alvine] damages[.]” (Emphasis 

added.) To support its claim of res ipsa loquitor, Alvine asserted that (1) the 

pollution discharge “would not ordinarily be expected to occur absent someone’s 

negligence,” (2) Demaray and Hagemann “were at all relevant times” in control of 

the cattle operation, and (3) the discharge of pollutants was not from Alvine’s 

conduct.

[¶17.] Alvine’s third cause of action, nuisance, alleged that the discharge of 

pollutants “has polluted and contaminated and will continue to pollute and 

Smet’s argument. Regardless, neither the initial discharge of pollutants by 

the cattle operation, nor the manure’s migration was sudden and accidental. 
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contaminate the lakes and drainages on [Alvine’s] property and is a nuisance that 

invades [Alvine’s] right to [the] use and enjoyment of [its] own land.” (Emphasis 

added.) Alvine also alleged a claim for trespass, asserting that the pollution “has 

and will result in an interference with the use of an intrusion upon” Alvine’s water 

and property. (Emphasis added.) Finally, Alvine sought injunctive relief, 

contending that “[a]s a result of [Demaray and Hagemann’s] discharge of pollutants 

which continues to come from [their] leasing and renting of land and the cattle 

operation, [Alvine’s] property and the lakes and drainages . . . will continue to be 

invaded.” (Emphasis added.) 

[¶18.] No language in the Alvine complaint arguably supported a cause of 

action for a “sudden and accidental” discharge of pollutants. “Intermittently” 

cannot be construed to mean abrupt or immediate. The complaint clearly made 

claims against Demaray and Hagemann for “past and continuing” and “repeated” 

discharges that “will continue.” There is no immediacy or abruptness with a 

discharge that is intermittent, repeated, and likely to continue. Further, the 

“common, basic underlying theory to all of the claims” against Demaray and 

Hagemann was the discharge of pollutants onto Alvine’s property. See S.D. State 

Cement Plant Comm’n, 2000 S.D. 116, ¶ 23, 616 N.W.2d at 406. Therefore, the fact 

that the complaint stated a cause of action for negligence will not alone invoke De 

Smet’s duty to defend. 

[¶19.] Nonetheless, Demaray and Hagemann emphasize that certain facts 

from the underlying trial support that coverage was arguable under the Alvine 

complaint. During the Alvine trial, testimony was given that a rainstorm possibly 
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caused a sudden flooding, which transferred manure to Alvine’s property. 

Notwithstanding that the circuit court went beyond the parties’ stipulated facts and 

outside the record, as the transcript from the Alvine trial was not part of the record 

here, the evidence that a rainstorm caused a sudden flooding and migration of 

pollutants did not implicate De Smet’s duty to defend. The Alvine complaint alleged 

causes of action against Demaray and Hagemann for long-term and routine 

discharges of pollutants. “[T]he majority of courts . . . decline to microanalyze an 

insured’s long-term, routine disposal of [pollutants] in order to find discrete sudden 

and accidental polluting events.” Travelers Cas. & Sur. Co. v. Superior Court, 75 

Cal. Rptr. 2d 54, 66 (Cal. Ct. App. 1998); see also LaFarge Corp. v. Travelers Indem. 

Co., 118 F.3d 1511, 1516-17 (11th Cir. 1997); A. Johnson & Co., Inc. v. Aetna Cas. & 

Sur. Co., 933 F.2d 66, 75 (1st Cir. 1991); U.S. Fid. & Guar. Co. v. Star Fire Coals, 

856 F.2d 31, 34-35 (6th Cir. 1988). The claimed damages in this case arose out of 

and from the alleged migration of pollutants originally discharged on Demaray’s 

land. There was no claim that Demaray and Hagemann’s discharges were sudden 

or accidental. 

[¶20.] Because nothing in the Alvine complaint stated an arguable claim for a 

sudden and accidental discharge of pollutants, De Smet did not breach its duty to 

defend Demaray and Hagemann, and the circuit court erred when it granted 

Demaray and Hagemann’s motion for summary judgment. The judgment is 

reversed, and the circuit court is directed to grant summary judgment for De Smet. 

[¶21.] Demaray and Hagemann moved for appellate attorney’s fees. They 

cite no statute or rule allowing fees in this appeal. See SDCL 15-26A-87.3 (fees may 
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be awarded where such are allowed). With no statute allowing fees in this case, 

Demaray and Hagemann’s request is denied. 

[¶22.] Reversed and remanded. 

[¶23.] GILBERTSON, Chief Justice, and ZINTER and SEVERSON, Justices, 

and RUSCH, Retired Circuit Court Judge, concur. 

[¶24.] RUSCH, Retired Circuit Court Judge, sitting for MEIERHENRY, 

Retired Justice, disqualified.