Case Name: DIMMITT CHEVROLET, INC., et al., Appellants, v. SOUTHEASTERN FIDELITY INSURANCE CORPORATION, Appellee
Court: Florida Supreme Court
Jurisdiction: Florida
Decision Date: 1993-07-01
Citations: 636 So. 2d 700
Docket Number: No. 78293
Parties: DIMMITT CHEVROLET, INC., et al., Appellants, v. SOUTHEASTERN FIDELITY INSURANCE CORPORATION, Appellee.
Judges: McDonald, SHAW, GRIMES and KOGAN, JJ., concur.
Reporter: Southern Reporter, Second Series
Volume: 636
Pages: 700–715

Head Matter:
DIMMITT CHEVROLET, INC., et al., Appellants, v. SOUTHEASTERN FIDELITY INSURANCE CORPORATION, Appellee.
No. 78293.
Supreme Court of Florida.
July 1, 1993.
Order Denying Rehearing and Clarification March 31, 1994.
Alan C. Sundberg and William F. McGowan, Jr. of Carlton, Fields, Ward, Emmanuel, Smith and Cutler, Tallahassee, and Thomas K. Bick and Joseph W. Dorn of Kilpatrick and Cody, Washington, DC, for appellants.
Robert E. Austin, Jr., Leesburg, and Hal K. Litchford and Kristyn D. Elliott, Orlando, for appellee.
Robert A. Butterworth, Atty. Gen. and Jeff G. Peters, Asst. Atty. Gen., Tallahassee, ami-cus curiae for State.
Jeffrey S. Kurtz, City Atty., Delray Beach, and Steven R. Berger and Bradley H. Trush-in of Wolpe, Leibowitz, Berger & Brotman, Miami, amicus curiae for City of Delray Beach.
Jeffrey A. Tew and Daniel A. Casey of Kirkpatrick and Lockhart, Miami, amici curiae for The American Fiber Mfrs Ass’n, The American Petroleum Institute, The Chemical Mfrs Ass’n, Intern. Business Machines Corp. and Olin Corp.
George K. Rahdert of Rahdert & Anderson, St. Petersburg, Luther T. Mun-ford of Phelps Dunbar, Jackson, MS; and Richard N. Dicharry and Pamela G. Michiels of Phelps Dunbar, New Orleans, LA, amicus curiae for John Richard Ludbrooke Youell on behalf of Underwriters at Lloyd’s, London.
Ronald L. Kammer of Hinshaw and Culbertson, Miami, and Thomas W. Brunner, James M. Johnstone and Lainie J. Simon of Wiley, Rein and Fielding, Washington, DC, amici curiae for Ins. Environmental Litigation Ass’n, Service Ins. Co., Florida Farm Bureau Ins. Co., and American Sur. & Cas. Co.
McDonald, SHAW, GRIMES and KOGAN, JJ., concur.
BARKETT, C.J., and OVERTON and HARDING, JJ., dissent.

Opinion:
ON MOTION FOR REHEARING GRANTED
PER CURIAM.
This cause is before the Court on the following certified question of law from the United States Court of Appeals in Industrial Indemnity Insurance Co. v. Crown Auto Dealerships, Inc., 935 F.2d 240 (11th Cir.1991):
WHETHER, AS A MATTER OF LAW, THE POLLUTION EXCLUSION CLAUSE CONTAINED IN THE COMPREHENSIVE GENERAL LIABILITY INSURANCE POLICY PRECLUDES COVERAGE TO ITS INSURED FOR LIABILITY FOR THE ENVIRONMENTAL CONTAMINATION THAT OCCURRED IN THIS CASE.
We have jurisdiction. Art. V, § 3(b)(6), Fla. Const. See also § 25.031, Fla.Stat. (1991); Fla.R.App.P. 9.150.
The court of appeals set forth the following statement of facts and procedural history of this case for our consideration.
The following facts, taken from the district court's opinion, Industrial Indem. Ins. Co. v. Crown Auto Dealerships, 731 F.Supp. 1517, 1518-19 (M.D.Fla.1990), are undisputed. Appellants Dimmitt Chevrolet, Inc. and Larry Dimmitt Cadillac, Inc. ("Dimmitt") operated two automobile dealerships. From 1974 through 1979, Dim-mitt sold the used crankcase oil generated by its business to Peak Oil Company ("Peak"). From 1954 to 1979, Peak recycled the oil at its plant in Hillsborough County, Florida for sale as used oil.
In 1983, the Environmental Protection Agency ("EPA") determined that Peak's oil operations had resulted in extensive soil and groundwater pollution at and around the plant site. Much of this pollution resulted from Peak's placement of waste oil sludge in unlined storage ponds. Chemicals from the sludge then leached into the soil and groundwater. Some of the pollution also derived from oil spills and leaks at the site, including a 1978 incident in which a dike collapsed and allowed oily wastewater to be released from a holding pond, and the occasional runoff of contaminated rainwater.
In July 1987, the EPA notified appellants that a release of hazardous substances had occurred at the Peak site and that appellants were potentially responsible parties ("PRP") for the costs of investigating and cleaning up the pollution. This liability is imposed, pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), 42 U.S.C. § 9607 et seq., on anyone who generates, transports, or disposes of hazardous substances. In February 1989, Dimmitt and other PRPs entered into two administrative orders with EPA. 'Without conceding liability, appellants agreed to undertake remedial measures at the Peak site.
Appellee Southeastern Fidelity Insurance Corporation ("Southeastern") provided comprehensive general liability ("CGL") insurance coverage to Dimmitt from 1972 through 1980. The policy covered Dimmitt
for all sums which the INSURED shall become legally obligated to pay as DAMAGES because of A. BODILY INJURY or B. PROPERTY DAMAGE to which this insurance applies, caused by an occurrence, and the Company shall have the right and duty to defend any suit against the INSURED seeking DAMAGES on account of such BODILY INJURY or PROPERTY DAMAGE, even if any of the allegations of the suit are groundless....
An "occurrence", is defined by the policy as
an accident including continuous or repeated exposure to conditions, which result in BODILY INJURY or PROPERTY DAMAGE neither expected nor intended from the standpoint of the INSURED....
However, the policy excluded coverage for
BODILY INJURY or PROPERTY DAMAGE arising out of the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids, or gases, waste materials . into or upon land, the atmo- sphere 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....
In October 1988, Southeastern filed a declaratory judgment action against Dim-mitt, seeking a declaration by the district court that Southeastern owed no duty to defend or indemnify Dimmitt under the CGL policy. Dimmitt filed a counterclaim seeking a contrary declaration. Both parties subsequently filed motions for summary judgment. The district court granted summary judgment in favor of Southeastern, reasoning that the pollution exclusion was not ambiguous and that the word "sudden" should be given a temporal meaning. Industrial Indem. Ins. Co. v. Crown Auto Dealerships, 731 F.Supp. 1517 (M.D.Fla.1990). Accordingly, the district court ruled that the pollution at the Peak site occurred over a period of years and therefore could not be considered "sudden." The district court subsequently denied without opinion Dimmitt's motion to alter or amend the judgment.
Crown Auto, 935 F.2d at 241-42 (footnotes omitted).
As noted by the court of appeals, Dimmitt Chevrolet, Inc. (Dimmitt) was not the actual cause of the pollution damage at issue. Its liability, however, is not in dispute in this case. The issue before us is whether Dim-mitt's comprehensive liability insurance policy was intended to cover hazardous waste pollution under the circumstances set forth in the court of appeals' opinion. The question turns on the meaning of the term "sudden and accidental" within the pollution exclusion clause of Dimmitt's policy.
Dimmitt asserts that the term "sudden and accidental" is ambiguous because it is subject to multiple definitions. Thus, because ambiguous terms within an insurance policy should be construed in favor of the insured, the policy should be construed in Dimmitt's favor. Dimmitt argues that the word "sudden" does not have a temporal meaning and that the term was intentionally written so as to provide coverage for unexpected and unintended pollution discharge.
Southeastern Fidelity Insurance Corporation (Southeastern) contends that the clause excludes coverage for all pollution except when the discharge or dispersal of the pollutant occurs abruptly and accidentally. As such, Southeastern asserts that it had no duty to defend or indemnify Dimmitt because the pollution by the actual polluter, Peak Oil Company (Peak), was gradual and occurred over a period of several years.
Both sides also argue that the drafting history of pollution exclusion clauses favors their respective positions. In this regard, it should be noted that comprehensive general liability (CGL) policies are standard insurance policies developed by insurance industry trade associations, and these policies are the primary form of commercial insurance coverage obtained by businesses throughout the country. Before 1966, the standard CGL policy covered only property and personal injury damage that was caused by "accident." Broadwell Realty Servs., Inc. v. Fidelity & Casualty Co., 218 N.J.Super. 516, 528 A.2d 76, 84 (1987). In 1966 the insurance industry switched to "occurrence-based" policies in which the term "occurrence" was defined 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.' " Broadwell, 528 A.2d at 84 (quoting 3 Rowland H. Long, The Law of Liability Insurance App-53 (1966)). Beginning in 1970, the pollution exclusion clause at issue in this case was added to the standard policy. Finally, the policy was again changed in 1984 by the addition of what has been called an "absolute exclusion clause," which totally excludes coverage for pollution cleanup costs that arise from governmental directives. Kenneth S. Abraham, Environmental Liability Insurance Law 161 (1991).
Dimmitt argues that because many state insurance commissioners approved the 1970 addition of the pollution exclusion clause without ordering a reduction in premiums, this indicates that the clause did little more than clarify coverage. Southeastern counters by saying that the reason there was no premium reduction in 1970 was because there had been no premium increase when the coverage was expanded in 1966 to cover occurrences. Both parties also rely on conflicting statements made by insurance representatives who had appeared before state insurance commissions, as well as statements made by other insurance experts.
The policy language at issue here has been the subject of extensive litigation throughout the United States. There is substantial support for both parties' positions. On the one hand, the supreme courts of Colorado, Georgia, West Virginia, and Wisconsin have found the pollution exclusion clause to be ambiguous. In reaching their conclusions, these courts refer to the varying dictionary definitions of the word "sudden." They are also persuaded by the drafting history that the words "sudden and accidental" were intended to mean "unexpected and unintended."
On the other hand, the supreme courts of Massachusetts, Michigan, North Carolina, and Ohio have held that the word "sudden" has a temporal context. Therefore, when the word "sudden" is combined with the word "accidental," the clause means abrupt and unintended. A majority of federal courts of appeal appear to have adopted this view in construing policies in states in which the supreme court of that state has not yet set forth its position.
We are persuaded that the federal district judge properly construed Southeastern's pollution exclusion clause. The ordinary and common usage of the term "sudden" includes a temporal aspect with a sense of immediacy or abruptness. As stated by the court in Hybud Equipment Corp. v. Sphere Drake Insurance Co., 64 Ohio St.3d 657, 597 N.E.2d 1096, 1102 (1992):
As it is most commonly used, "sudden" means happening quickly, abruptly, or without prior notice. This is the plain and ordinary meaning of the word, and the context in which it is employed does not indicate that it should be given any other meaning.
See Sylvester Bros. Dev. Co. v. Great Cent. Ins. Co., 480 N.W.2d 368 (Minn.App.1992) (sudden means the incident at issue occurred relatively quickly rather than gradually over a long period of time).
Dimmitt points to dictionary definitions of "sudden" which also include the meaning of "happening or coming unexpectedly." Dictionaries are helpful insofar as they set forth the ordinary, usual meaning of words. However, as noted in New Castle County v. Hartford Accident & Indemnity Co., dictionaries are "imperfect yardsticks of ambiguity." 933 F.2d at 1193-94. Our duty is to determine whether the word "sudden" is ambiguous in the context of the specific insurance policy at issue.
The use of the word "sudden" can connote a sense of the unexpected. However, rather than standing alone in the pollution exclusion clause, it is an integral part of the conjunctive phrase "sudden and accidental." The term accidental is generally understood to mean unexpected or unintended. Hartford Accident & Indem. Co. v. United States Fidelity & Guar. Co., 962 F.2d 1484 (10th Cir.), cert. denied, — U.S. -, 113 S.Ct. 411, 121 L.Ed.2d 335 (1992). Therefore, to construe sudden also to mean unintended and unexpected would render the words sudden and accidental entirely redundant. This analysis is well stated in Northern Ins. Co. v. Aardvark Assocs., Inc.:
"To read 'sudden and accidental' to mean only unexpected and unintended is to rewrite the policy by excluding one important pollution coverage requirement— abruptness of the pollution discharge. The very use of the words 'sudden and accidental' reveal [sic] a clear intent to define the words differently, stating two separate requirements. Reading 'sudden' in its context, i.e. joined by the word 'and' to the word 'accident', the inescapable conclusion is that 'sudden', even if including the concept of unexpectedness, also adds an additional element because 'unexpectedness' is already expressed by 'accident.' This additional element is the temporal meaning of sudden, i.e. abruptness or brevity. To define sudden as meaning only unexpected or unintended, and therefore as a mere restatement of accidental, would render the suddenness requirement mere surplus-age."
942 F.2d 189, 192 (3d Cir.1991) (quoting Lower Paxton Township v. United States Fidelity & Guar. Co., 383 Pa.Super. 558, 557 A.2d 393, 402 (1989)). As expressed in the pollution exclusion clause, the word sudden means abrupt and unexpected.
We reject Dimmitt's suggestion that the policy is ambiguous because the term accident is included both within the definition of occurrence and in the pollution exclusion provision. We concur with the response to this argument stated in United States Fidelity & Guaranty Co. v. Star Fire Coals, Inc., 856 F.2d 31, 34 (6th Cir.1988):
We do not find the pollution clause to be riddled with ambiguities despite the best efforts of Star Fire to create them. Specifically, we believe the district court erred when it treated the pollution exclusion and the "occurrence" definition provisions as interchangeable. Though the district court recognized that the issue before it was "whether Star Fire's release of coal dust falls within the policy exclusion provision," the court failed to explicate the language of the exclusion and ruled in favor of Star Fire on the basis of the "occurrence" definition. We have no difficulty reconciling the two provisions. We believe the "occurrence" definition results in a policy that provides coverage for continuous or repeated exposure to conditions causing damages in all cases except those involving pollution, where coverage is limited to those situations where the discharge was "sudden and accidental." We fully agree with the conclusion that this "language is clear and plain, something only a lawyer's ingenuity could make ambiguous." American Motorists Insurance Co. v. General Host Corp., 667 F.Supp. 1423 (D.Kan.1987). "It's strange logic to perceive ambiguity" in this clause. Waste Management of Carolinas, Inc. v. Peerless Insurance Co., 315 N.C. 688, 340 S.E.2d 374 (1986).
In the final analysis, we construe this policy to mean that (1) basic coverage arises from the occurrence of unintended damages, but (2) such damages as arise from the discharge of various pollutants are excluded from the basic coverage, except that (3) dam-' ages arising from the discharge of these pollutants will fall within the coverage of the policy where such discharge is sudden and accidental. See Liberty Mut. Ins. Co. v. Triangle Indus., Inc., 957 F.2d 1153 (4th Cir.), cert. denied, — U.S. -, 113 S.Ct. 78, 121 L.Ed.2d 42 (1992).
Because we conclude that the policy language is unambiguous, we find it inappropriate and unnecessary to consider the arguments pertaining to the drafting history of the pollution exclusion clause.
Applying the policy language to the facts of this ease, we hold that the pollution damage was not within the scope of Southeastern's policy. The pollution took place over a period of many years and most of it occurred gradually. With respect to the 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 when he said:
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. As one court observed: "contamination . by disposing of chemicals in the lagoon, or by annual careless spillage onto the ground surface cannot be sudden, or unexpected and accidental . " American Mutual Liability Ins. v. Neville Chemical, 650 F.Supp. 929, 933 (W.D.Pa.1987); Grant-Southern Iron & Metal Co. v. CNA Insurance Co., 669 F.Supp. 798 (E.D.Mich.1986) (polluting air emissions caused by the sporadic or continuous break down of pollution equipment were not sudden and accidental).
Industrial Indem. Ins. v. Crown Auto Dealerships, 731 F.Supp. 1517, 1521 (M.D.Fla.1990). See also Lumbermens Mut. Casualty Co. v. Belleville Indus., Inc., 407 Mass. 675, 555 N.E.2d 568 (1990).
We answer the certified question in the affirmative and return the record to the Eleventh Circuit.
It is so ordered.
MCDONALD, SHAW and KOGAN and HARDING, JJ., concur.
GRIMES, J., concurs with an opinion.
OVERTON, J., dissents with an opinion, in which BARKETT, C.J. and HARDING, J., concur.
. Hecla Mining Co. v. New Hampshire Ins. Co., 811 P.2d 1083 (Colo.1991); Claussen v. Aetna Casualty & Sur. Co., 259 Ga. 333, 380 S.E.2d 686 (1989); Joy Technologies, Inc. v. Liberty Mut. Ins. Co., 187 W.Va. 742, 421 S.E.2d 493 (1992); Just v. Land Reclamation Ltd., 155 Wis.2d 737, 157 Wis.2d 507, 456 N.W.2d 570 (1990).
. Lumbermens Mut. Casualty v. Belleville Indus., Inc., 407 Mass. 675, 555 N.E.2d 568 (1990); Upjohn v. New Hampshire Ins. Co., 438 Mich. 197, 476 N.W.2d 392 (1991); Waste Management of the Carolinas, Inc. v. Peerless Ins. Co., 315 N.C. 688, 340 S.E.2d 374 (1986); Hybud Equip. Corp. v. Sphere Drake Ins. Co., 64 Ohio St.3d 657, 597 N.E.2d 1096 (1992).
. E.g., Liberty Mut. Ins. Co. v. Triangle Indus., Inc., 957 F.2d 1153 (4th Cir.) (construing New Jersey law), cert, denied, - U.S. -, 113 S.Ct. 78, 121 L.Ed.2d 42 (1992); Aetna Casualty & Sur. Co. v. General Dynamics Corp., 968 F.2d 707 (8th Cir.1992) (construing Missouri law); Hartford Accident & Indem. Co. v. United States Fidelity & Guar. Co., 962 F.2d 1484 (10th Cir.) (construing Utah law), cert. denied, - U.S. - , 113 S.Ct. 411, 121 L.Ed.2d 335 (1992); Northern Ins. Co. v. Aardvark Assocs., 942 F.2d 189 (3d Cir.1991) (construing Pennsylvania law); A. Johnson & Co. v. Aetna Casualty & Sur. Co., 933 F.2d 66 (1st Cir.1991) (construing Maine law); New York v. AMRO Realty Corp., 936 F.2d 1420 (2d Cir.1991) (construing New York law); FL Aerospace v. Aetna Casualty & Sur. Co., 897 F.2d 214 (6th Cir.) (construing Michigan law), cert. denied, 498 U.S. 911, 111 S.Ct. 284, 112 L.Ed.2d 238 (1990); United States Fidelity & Guar. Co. v. Murray Ohio Mfg. Co., 875 F.2d 868 (6th Cir.1989) (construing Tennessee law by affirming without opinion 693 F.Supp. 617 (M.D.Tenn.1988)); United States Fidelity & Guar. Co. v. Star Fire Coals, Inc., 856 F.2d 31 (6th Cir.1988) (construing Kentucky law); Great Lakes Container Corp. v. National Union Fire Ins. Co., 727 F.2d 30 (1st Cir.1984) (construing New Hampshire law). Contra CPC Int'l, Inc. v. Northbrook Excess & Surplus Ins. Co., 962 F.2d 77 (1st Cir.1992) (also construing New Jersey law); New Castle County v. Hartford Accident & Indem. Co., 933 F.2d 1162 (3d Cir.1991) (construing Delaware law).
. See E. Joshua Rosenkranz, Note, The Pollution Exclusion Clause Through the Looking Glass, 74 Geo.L.J. 1237, 1240 (1986), in which the author laments that some courts have "ignored the insurers' intent and distorted the phrase 'sudden and accidental' beyond recognition." He states that "courts have extended the coverage of policies containing the pollution exclusion 'to mean just what they choose it to mean.' " Id.
. Our conclusion that sudden has a temporal dimension when used in conjunction with the term accidental is consistent with this Court's precedent in construing the statutory definition of sudden accident in workers' compensation cases. Spivey v. Battaglia Fruit Co., 138 So.2d 308 (Fla.1962); Meehan v. Crowder, 158 Fla. 361, 28 So.2d 435 (1946).
.Likewise, we also reject the dissenters' argument that the term "sudden and accidental" in the pollution exclusion clause should be given the same interpretation as certain courts have construed the term in boiler and machinery policies. The most obvious flaw in this argument is that it ascribes universal meaning to the phrase "sudden and accidental" regardless of the context of its use. Significantly, boiler and machinery policies provide coverage for damage that is sudden and accidental; Southeastern's pollution exclusion applies the phrase to the causative agent — the discharge. Further, we note that the Massachusetts Supreme Court specifically rejected its own prior decision in New England Gas & Electric Ass'n v. Ocean Accident & Guarantee Corp., 330 Mass. 640, 116 N.E.2d 671 (1953), the lead case relied upon by the dissenters, as authority for compelling the sudden and accidental language in pollution exclusion clauses to be construed in the same manner as in boiler and machinery policies. Lumbermens Mut. Casualty Co. v. Belleville Indus., Inc., 407 Mass. 675, 555 N.E.2d 568 (1990).