Title: Kevin Peace v. Northwestern National Insurance Company
Citation: N/A
Docket Number: 1996AP000328
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: July 9, 1999

SUPREME COURT OF WISCONSIN 
 
 
Case No.: 
96-0328 
 
 
Complete Title 
of Case: 
 
 
Kevin Peace, a Minor, By His Guardian Ad  
Litem, Robert J. Lerner,  
 
Plaintiff-Joint-Appellant, 
 
v. 
Northwestern National Insurance Company,  
 
Defendant-Respondent-Petitioner, 
 
Djukic Enterprises, Inc.,  
 
Defendant-Joint-Appellant, 
State Farm General Insurance Company, Darrell 
Harding, Edmund J. Durand and Wisconsin 
Department of Health and Social Services,  
 
Defendants.  
 
ON REVIEW OF A DECISION OF THE COURT OF APPEALS 
Reported at:  215 Wis. 2d 165, 573 N.W.2d 197 
 
 
 
(Ct. App. 1997-Published) 
 
 
Opinion Filed: 
July 9, 1999 
Submitted on Briefs: 
 
Oral Argument: 
September 9, 1998 
 
 
Source of APPEAL 
 
COURT: 
Circuit 
 
COUNTY: 
Milwaukee 
 
JUDGE: 
Michael J. Barron 
 
 
JUSTICES: 
 
Concurred: 
Bradley, J., concurs (opinion filed) 
 
Dissented: 
Abrahamson, C.J., dissents (opinion filed) 
 
 
Crooks, J., dissents (opinion filed) 
 
 
Bablitch, J., joins 
 
Not Participating:  
 
 
ATTORNEYS: 
For the defendant-respondent-petitioner there 
were briefs by John R. Pendergast, Jr., and Crivello, Carlson, 
Mentkowski & Steeves, S.C., Milwaukee and oral argument by John 
R. Pendergast, Jr. 
 
 
 
 
 
For the plaintiff-joint appellant there was a 
brief by Robert J. Lerner, B. Michele Sumara and Perry, Lerner, 
Quindel & Saks, S.C., Milwaukee and oral argument B. Michele 
Sumara. 
 
 
For the defendant-joint appellant there was a 
brief by James E. Culhane and Davis & Kuelthau, S.C., Milwaukee 
and oral argument by James E. Culhane. 
 
 
Amicus curiae was filed by Susan R. Tyndall and 
Hinshaw & Culbertson, Milwaukeee for the Wisconsin Insurance 
Alliance and Civil Trial Counsel of Wisconsin. 
 
 
Amicus curiae was filed by Robert C. Burrell, R. 
Jeffrey Wagner and Borgelt, Powell, Peterson & Frauen, S.C., 
Milwaukee, of counsel, Laura A. Foggan, Daniel E. Troy, Howard M. 
Radzely and Wiley, Rein & Fielding, Washington, D.C., for the 
Insurance Environmental Litigation Association. 
 
 
Amicus curiae was filed by Peter G. Earle and 
Boyton & Earle, Milwaukee, Irene C. Warshauer and Anderson, Kill 
& Olick, P.C., New York, NY, of counsel, Amy Bach, counsel for 
Untied Policyholders, San Francisco, CA, for the United 
Policyholders. 
 
 
Amicus curiae was filed by Raymond R. Krueger, 
David V. Meany and Michael, Best & Friedrich, LLP, Milwaukee, of 
counsel, Howard S. Lindenberg, senior counsel for Federal Home 
Loan Mortgage Corporation, McLean, VA, for Federal Home Loan 
Mortgage Corporation and Fair Lending Coalition.  
 
No.  96-0328 
 
1 
 
NOTICE 
This opinion is subject to further editing and 
modification.  The final version will appear in 
the bound volume of the official reports. 
 
 
No. 96-0328 
 
STATE OF WISCONSIN               :        
        
 
 
 
 
IN SUPREME COURT 
 
 
Kevin Peace, a Minor, By His Guardian Ad 
Litem, Robert J. Lerner, 
 
 
Plaintiff-Joint-Appellant, 
 
 
v. 
 
Northwestern National Insurance Company, 
 
 
 
Defendant-Respondent-Petitioner 
 
v. 
Djukic Enterprises, Inc., 
 
 
Defendant-Joint-Appellant, 
State Farm General Insurance Company, 
Darrell Harding, Edmund J. Durand and 
Wisconsin Department of Health and Social 
Services, 
 
 
Defendants. 
 
FILED 
 
JUL 9, 1999 
 
Marilyn L. Graves 
Clerk of Supreme Court 
Madison, WI 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Reversed and 
cause remanded. 
¶1 
DAVID T. PROSSER, J.  Northwestern National Insurance 
Company (Northwestern) seeks review of a court of appeals' 
decision which reversed a circuit court grant of summary 
judgment to Northwestern.1  Northwestern asserts that the 
insurance policy it sold to Djukic Enterprises (Djukic) excludes 
coverage for personal injury claims arising from the ingestion 
                     
1 Peace v. Northwestern National Ins. Co., 215 Wis. 2d 165, 
573 N.W.2d 197 (Ct. App. 1997). 
No.  96-0328 
 
2 
of lead in flaked or chipped paint or dust present in an 
apartment Djukic rented to the minor plaintiff, Kevin Peace, and 
his mother.  The circuit court concluded that lead present in 
paint is a pollutant under the terms of Northwestern's pollution 
exclusion clause, and that when lead-based paint has chipped, 
flaked, or deteriorated into dust, that action is a discharge, 
dispersal, release, or escape under the policy's exclusion.  The 
court of appeals ultimately reversed, concluding that lead 
derived from paint chips, paint flakes and dust is not a 
pollutant or contaminant under the exclusion.  
¶2 
Based on the terms of the insurance policy at issue 
and the reasonable expectations of an insured property owner in 
1988, we conclude that lead present in paint in a residence is a 
pollutant.  We also conclude that when lead-based paint either 
chips, flakes, or deteriorates into dust or fumes, that action 
is a discharge, dispersal, release, or escape within the meaning 
of terms in the insurance policy.  We therefore reverse the 
court of appeals and hold that the pollution exclusion clause in 
this case bars the property owner's claim against its insurer 
for defense against a suit for bodily injuries arising from 
lead-based paint that chips, flakes, or deteriorates to dust on 
his property. 
FACTS 
¶3 
The complaint reveals the following:  Between the 
period of August 1987 and March 1989, Djukic, and at some point 
Darrell Harding and Edmund J. Durand, owned an apartment 
building on North 15th Street in Milwaukee.  Kevin Peace, a 
No.  96-0328 
 
3 
minor, lived with his mother in an apartment in that building 
during the relevant time period. 
¶4 
On November 3, 1988, a City of Milwaukee Health 
Department inspector visited the North 15th Street premises.  
That inspection, while not identifying a particular apartment at 
the premises, revealed the presence of loose, peeling, flaking, 
or chipped paint which contained a hazardous concentration of 
lead.  In a November 7 notice of ordinance violation addressed 
to Djukic, the city sanitarian advised Djukic that such 
conditions tend to cause lead poisoning.2  The sanitarian ordered 
Djukic to take immediate corrective action to protect the public 
health and permanently correct the hazardous conditions within 
30 days.  
¶5 
Approximately six weeks after the notice of ordinance 
violation 
was 
issued, 
Djukic 
obtained 
commercial 
general 
liability 
coverage 
for 
the 
15th 
Street 
property 
through 
Northwestern.  The policy was in effect from December 15, 1988, 
through March 10, 1989.3 
                     
2 Lead poisoning can cause brain damage, developmental 
disorders, kidney and liver disease; it contaminates the body by 
injecting 
impurities 
into 
the 
blood 
stream. 
 
Lefrak 
Organization, Inc. v. Chubb Custom Ins. Co., 942 F. Supp. 949, 
955 (S.D.N.Y. 1996).  "Children under the age of six, whose 
nervous 
systems 
are 
still 
developing, 
are 
particularly 
vulnerable to the damage caused by lead poisoning."  Juarez v. 
Wavecrest Management Team Ltd., 672 N.E.2d 135, 139 (N.Y. 1996). 
3 On February 6, 1989, Northwestern mailed a cancellation 
notice of the policy to Djukic, effective March 10, 1989, for 
underwriting reasons. 
No.  96-0328 
 
4 
¶6 
The policy provided coverage for "those sums that the 
insured becomes legally obligated to pay as damages because of 
'bodily injury' or 'property damage' to which this insurance 
applies."   
¶7 
The policy also excluded certain coverage.  The 
pollution 
exclusion 
clause 
excluded 
"'bodily 
injury' 
or 
'property damage' arising out of the actual, alleged or 
threatened 
discharge, 
dispersal, 
release 
or 
escape 
of 
pollutants: (a) At or from premises you own, rent or occupy. 
. . ."  The policy defined "pollutants" as "any solid, liquid, 
gaseous or thermal irritant or contaminant, including smoke, 
vapor, soot, fumes, acids, alkalis, chemicals and waste."4 
                     
4 The full text of the pertinent exclusion reads: 
2. Exclusions. 
   This insurance does not apply to: 
. . .  
f. 
(1) "Bodily injury" or "property damage" arising 
out of the actual, alleged or threatened discharge, 
dispersal, release or escape of pollutants: 
 
(a) At or from premises you own, rent or occupy; 
 
(b) At or from any site or location used by or for you 
or 
others 
for 
the 
handling, 
storage, 
disposal, 
processing or treatment of waste; 
 
(c) Which are at any time transported, handled, 
stored, treated, disposed of, or processed as waste by 
or for you or any person or organization for whom you 
may be legally responsible; or 
 
(d) At or from any site or location on which you or 
any contractors or subcontractors working directly or 
indirectly on your behalf are performing operations: 
 
No.  96-0328 
 
5 
PROCEDURAL HISTORY 
¶8 
On May 10, 1995, the guardian ad litem for Peace filed 
a 
complaint 
asserting 
that 
Djukic, 
Harding, 
and 
Durand 
negligently failed to comply with a City of Milwaukee ordinance 
prohibiting any lead-based nuisance from existing on the 
property,5 negligently failed to inspect and maintain the 
                                                                  
(i) if the pollutants are brought on or to the 
site 
or 
location 
in 
connection 
with 
such 
operations; or 
 
(ii) if the operations are to test for, monitor, 
clean up, remove, contain, treat, detoxify or 
neutralize the pollutants. 
 
(2) Any loss, cost, or expense arising out of any 
governmental direction or request that you test for, 
monitor, clean up, remove, contain, treat, detoxify or 
neutralize pollutants. 
 
Pollutants means any solid, liquid, gaseous or thermal 
irritant or contaminant, including smoke, vapor, soot, 
fumes, acids, alkalis, chemicals and waste.  Waste 
includes materials to be recycled, reconditioned or 
reclaimed. 
 
5 The 1988 City of Milwaukee Ordinances provided in part: 
Chapter 66  TOXIC AND HAZARDOUS SUBSTANCES 
66-20. Definitions.  In this chapter: 
. . . 
6. 
ELEVATED 
BLOOD 
LEVEL 
is 
defined 
as 
a 
confirmed 
concentration of lead in whole blood of 25 micrograms per 
deciliter or greater, or the current level set by the U.S. 
Public Health Service, whichever is more restrictive. 
7.  LEAD BASED OBJECT means any surface or substance 
covered with a lead-based coating. 
No.  96-0328 
 
6 
apartment, and negligently failed to properly remove all lead-
based paint from the property.  The plaintiff also asserted that 
Djukic, Harding, and Durand rented the property in violation of 
Wis. Admin. Code § Ag 134.04(2)(b)4,6 because the property, by 
                                                                  
8. 
LEAD BASED SUBSTANCE means any substance whether gas, 
liquid, solid or any combination of the above that contains lead 
in excess of a level established by the commissioner. 
9. 
LEAD BASED SURFACE means any painted or coated 
surface, having a lead content greater than or equal to one 
milligram of lead per square centimeter in the dry surface as 
measured by an x-ray fluorescence analyzer or other approved 
recognized field or laboratory method. 
10. LEAD TOXICITY means an elevated blood lead level with 
an erythrocyte protoporphyrin level in whole blood of 35 
micrograms per deciliter or greater, or the current level 
set by the U.S. Public Health Service, whichever is more 
restrictive. 
. . . 
66-22.  Lead Poisoning Prevention and Control Regulations. 
1.  NUISANCE. Any lead based substance, surface or object 
which may contribute to an increased body burden of lead due to 
its condition, location or nature, or which is easily accessible 
to children, is declared a public health hazard and nuisance as 
defined in s. 80-1-2. 
2. PROHIBITED ACTS. a. No owner may create or allow to 
exist in or on their property any lead based substance, surface 
or object which is accessible to children, or may become 
accessible to children. 
6 Wisconsin Admin. Code § Ag 134.04 (1988) stated, in 
part: 
 
Ag 134.04 Disclosure requirements. 
. . .  
(2) CODE VIOLATIONS AND CONDITIONS AFFECTING HABITABILITY.  
Before entering into a rental agreement or accepting 
any earnest money or security deposit from the 
No.  96-0328 
 
7 
virtue of its deteriorated and poorly maintained surfaces which 
had been painted with lead-based paint, posed an unreasonable 
risk of personal injury. 
¶9 
In addition, the 
complaint 
alleged 
that Djukic, 
Harding, and Durand violated Wis. Stat. § 100.20(5) (1987-88)7 by 
failing to disclose to Kevin Peace or his mother the existence 
of such hazardous conditions.  Lastly, the complaint asserted 
that Djukic, Harding, and Durand breached an implied warranty of 
habitability.  The complaint alleged that defendants' actions 
caused Kevin Peace personal injury and substantial medical 
expense.  Specifically, Peace's complaint alleged that he 
                                                                  
prospective tenant, the landlord shall disclose to the 
prospective tenant: 
. . . 
(b) The following conditions affecting habitability, 
the existence of which the landlord knows or could 
know on basis of reasonable inspection, whether or not 
notice 
has 
been 
received 
from 
code 
enforcement 
authorities: 
. . .  
4. Any structural or other conditions in the dwelling 
unit or premises which constitute a substantial hazard 
to the health or safety of the tenant, or create an 
unreasonable risk of personal injury as a result of 
any reasonably foreseeable use of the premises other 
than negligent use or abuse of the premises by the 
tenant. 
 
7 Wisconsin Stat. § 100.20(5) (1987-88) provided: 
100.20 Methods of competition and trade practices 
(5)  Any person suffering pecuniary loss because of a 
violation by any other person of any order issued 
under this section may sue for damages therefor in any 
court of competent jurisdiction and shall recover 
twice the amount of such pecuniary loss, together with 
costs, including reasonable attorney’s fee. 
No.  96-0328 
 
8 
"sustained lead poisoning by ingesting lead derived from paint 
chips, paint flakes and dust that was contaminated with lead 
derived from lead based paint" at the apartment he shared with 
his mother. 
¶10 After Peace filed his complaint, Djukic tendered 
defense of the lawsuit to Northwestern.  Northwestern asserted 
that it had no coverage for the loss, and thus had no duty to 
defend Djukic.  Northwestern sought a summary judgment to 
confirm that it had no duty to defend.8  Northwestern based its 
denial of coverage and motion for summary judgment on the terms 
of the pollution exclusion clause in its policy. 
¶11 Djukic and its other liability insurer, State Farm 
General Ins. Co., filed a cross motion for summary judgment.  
Relying on cases from other jurisdictions, Djukic argued that 
lead paint is not a pollutant because lead was not an unwanted 
additive in the paint.  Instead, Djukic pointed out that lead 
was intentionally added to paint.  Djukic also argued that there 
was no "release" of a pollutant.  To fit the policy's definition 
of discharge, dispersal, release, or escape, Djukic asserted, 
                     
8  On October 13, 1995, the parties stipulated to a stay of 
discovery on the underlying tort claim until resolution of the 
summary judgment motion filed by Northwestern.  Northwestern 
sought summary judgment on two grounds: its pollution exclusion, 
and its expected or intended exclusion.  The latter exclusion 
excludes from coverage bodily injury or property damage expected 
or intended from the standpoint of the insured.  The scope of 
the expected or intended exclusion, as one of Northwestern's 
asserted bases for summary judgment, is not before us on this 
review. 
No.  96-0328 
 
9 
the pollutant had to move to an unintended location but such 
movement did not occur in this case. 
¶12 Peace argued that pollution exclusion clauses are 
intended to apply only to environmental pollution.  He also 
argued that the act of ingesting lead paint does not fit the 
exclusion's requirement that the pollutant "discharge, disperse, 
release or escape," nor does lead paint fit the definition of 
"pollutant" contained in the policy. 
¶13 At a hearing on November 27, 1995, the circuit court 
for Milwaukee County, Michael J. Barron, Judge, rendered an oral 
decision concluding that Northwestern had no duty to defend 
Djukic based on the policy's pollution exclusion clause.  The 
circuit court relied on United States Fire Ins. Co. v. Ace 
Baking Co., 164 Wis. 2d 499, 476 N.W.2d 280 (Ct. App. 1991), and 
its discussion of when a substance is considered a pollutant 
under the pollution exclusion clause.  The circuit court 
recognized that lead has a very toxic effect on children.  In 
addition, the circuit court concluded that the lead on Djukic's 
property was not confined to the area of intended use on the 
walls, but instead had dispersed. 
¶14 In a per curiam decision,9 the court of appeals 
affirmed the circuit court's entry of summary judgment, based in 
part on Vance v. Sukup, 207 Wis. 2d 578, 558 N.W.2d 683 (Ct. 
App. 1996), vacated, 211 Wis. 2d 529, 568 N.W.2d 297 (1997).  
                     
9 Peace v. Northwestern Nat'l Ins. Co., No. 96-0328, 
unpublished slip op. (Wis. Ct. App. Feb. 4, 1997).  
No.  96-0328 
 
10
The court of appeals concluded that lead was a contaminant under 
the pollution exclusion clause once the lead "escaped from the 
painted surfaces either by leaving the paint or because the 
paint itself chipped off."  Peace v. Northwestern Nat'l Ins. 
Co., No. 96-0328, unpublished slip op. at 5 (Wis. Ct. App. Feb. 
4, 1997) (quoting Vance, 207 Wis. 2d at 584).  The per curiam 
decision also relied on Vance to reject Peace's argument that 
pollution 
exclusion 
clauses 
apply 
only 
to 
environmental 
pollution and not to residential lead poisoning cases.  See 
Peace, slip op. at 5. 
¶15 Djukic and Peace jointly sought review of the per 
curiam decision.  This court held in abeyance that petition for 
review pending our review of the court of appeals decision in 
Donaldson v. Urban Land Interests, Inc., 205 Wis. 2d 408, 556 
N.W.2d 100 (Ct. App. 1996).  Following the release of Donaldson 
v. Urban Land Interests, 211 Wis. 2d 224, 564 N.W.2d 728 (1997), 
we summarily vacated the per curiam decision in Peace as well as 
the court of appeals published decision in Vance, and remanded 
to the court of appeals for reconsideration in light of 
Donaldson.  See Table, 211 Wis. 2d at 529. 
¶16 On November 18, 1997, after receiving supplemental 
briefs, a divided court of appeals reversed the circuit court's 
entry of summary judgment.  Peace v. Northwestern Nat'l Ins. 
Co., 215 Wis. 2d 165, 167, 573 N.W.2d 197 (Ct. App. 1997).  The 
majority concluded that the distinction between lead from 
"intact accessible painted surfaces" and lead from "paint chips, 
paint flakes and dust" was immaterial to a determination of 
No.  96-0328 
 
11
coverage under a pollution exclusion clause.  Id. at 171.  The 
majority read Donaldson to reject implicitly the premise of 
Vance and Ace Baking that lead becomes a contaminant only after 
it escapes from the painted surfaces.  Id. at 172-73.  Instead, 
the court of appeals majority relied on Donaldson's citation to 
a federal court's characterization of certain events as outside 
the scope of the pollution exclusion clause.  Id. at 173 (citing 
Pipefitters Welfare Educ. Fund v. Westchester Fire Ins. Co., 976 
F.2d 1037, 1044 (7th Cir. 1992)).  The Pipefitters court had 
characterized paint peeling off a wall, asbestos particles 
escaping during insulation work, and spray paint drifting off 
the mark as "everyday activities gone slightly, but not 
surprisingly, awry." 
¶17 Relying on the illustrations in Pipefitters, the court 
of appeals first concluded that when a child ingests lead from 
paint present on a painted surface or in paint chips, flakes, or 
dust, his or her injury arises from an activity gone slightly, 
but not surprisingly, awry.  Peace, 215 Wis. 2d at 174.  Next, 
the court of appeals used the vacated opinion in Vance to 
conclude that lead is not a contaminant in paint to which it was 
deliberately added.  Id. at 174.  For those reasons, the court 
of appeals reversed the judgment of the circuit court and held 
that Northwestern's pollution exclusion clause does not preclude 
coverage and that Northwestern had a duty under the policy to 
defend Djukic.  Id. at 175. 
No.  96-0328 
 
12
¶18 On March 17, 1998, we granted Northwestern's petition 
for review to clarify our approach to the interpretation of the 
pollution exclusion clause. 
¶19 The question before us is whether the circuit court 
properly granted summary judgment to Northwestern by concluding 
that the policy Djukic purchased did not provide coverage for 
bodily injury claims arising from ingestion of lead derived from 
lead-based paint that has chipped, flaked, or deteriorated into 
dust within a residence.  To answer this question, we first 
consider whether lead present in paint is a pollutant under the 
plain meaning of Northwestern's pollution exclusion clause.  If 
it is, we then consider whether, when lead-based paint chips, 
flakes, or deteriorates into dust or fumes, that action 
constitutes a discharge, dispersal, release, or escape under the 
policy.  Both inquiries must be answered in the affirmative for 
the pollution exclusion clause to preclude coverage, and for us 
to affirm the circuit court's grant of summary judgment.  See 
Donaldson, 211 Wis. 2d at 229. 
STANDARDS OF REVIEW 
¶20 We review summary judgment rulings independently, 
Green Spring Farms v. Kersten, 136 Wis. 2d 304, 315-17, 401 
N.W.2d 816 (1987), using the same methodology as that used by 
the circuit court.  Grams v. Boss, 97 Wis. 2d 332, 338-39, 294 
N.W.2d 473 (1980).  A motion for summary judgment must be 
granted 
when 
the 
pleadings, 
depositions, 
answers 
to 
interrogatories, and admissions on file, together with the 
affidavits, if any, establish that there is no genuine issue of 
No.  96-0328 
 
13
material fact, and the moving party is entitled to judgment as a 
matter of law.10  Wis. Stat. § 802.08(2) (1995-96).  Here, the 
parties all assert that there is no material fact in dispute 
with regard to the pollution exclusion claim.  We agree that 
there is no genuine issue of material fact and that the question 
presented is purely a question of law. 
¶21 Northwestern moved for summary judgment based on the 
terms of the insurance policy Djukic purchased.  Interpretation 
of an insurance policy is a question of law we review 
independently, without deference to the decisions of the circuit 
court and the court of appeals.  Kaun v. Industrial Fire & Cas. 
Ins. Co., 148 Wis. 2d 662, 667, 436 N.W.2d 321 (1989). 
ANALYSIS 
¶22 This case requires that we interpret the pollution 
exclusion clause as it applies to lead-based paint.  We must 
determine whether lead present in paint that chips, flakes, or 
deteriorates to dust or fumes is a "pollutant" that discharged, 
dispersed, released, or escaped within the meaning of terms in 
the pollution exclusion clause of the insurance policy.  
¶23 Interpretation 
of 
insurance 
contract 
language 
is 
governed by the same rules of interpretation and construction 
that govern other contracts.  Weimer v. Country Mut. Ins. Co., 
216 Wis. 2d 705, 721, 575 N.W.2d 466 (1998); Smith v. Atlantic 
                     
10 There are no depositions, answers to interrogatories or 
admissions in the record before us.  Thus, in this case, we 
review only the pleadings and affidavits to determine whether 
there is a genuine issue of material fact. 
No.  96-0328 
 
14
Mut. Ins. Co., 155 Wis. 2d 808, 810, 456 N.W.2d 597 (1990).  The 
primary object in contract interpretation is to ascertain and 
carry out the intent of the parties.  General Cas. Co. of 
Wisconsin v. Hills, 209 Wis. 2d 167, 175, 561 N.W.2d 718 (1997); 
Kremers-Urban Co. v. American Employers Ins. Co., 119 Wis. 2d 
722, 735, 351 N.W.2d 156, 163 (1984).  Policy language is 
interpreted according to its plain and ordinary meaning as 
understood by a reasonable insured.  Kremers-Urban, 119 Wis. 2d 
at 735. 
¶24 Terms or phrases in an insurance contract are not 
plain but ambiguous if "they are fairly susceptible to more than 
one construction."  Id. at 735.  An ambiguity has been described 
as "an intrinsically imprecise or uncertain" term; an ambiguity 
may also arise "because external factors have rendered the 
language chosen inadequate to resolve the problem at hand."  
James M. Fischer, Why are Insurance Contracts Subject to Special 
Rules of Interpretation?: Text Versus Context, 24 ARIZ. ST. L.J. 
995, 998 (Fall, 1992).  If coverage is ambiguous, an exclusion 
will be narrowly construed against the insurer.  Smith, 155 
Wis. 2d at 811.  However, this principle does not allow a court 
to eviscerate an exclusion that is clear from the face of the 
insurance policy.  Whirlpool Corp. v. Ziebert, 197 Wis. 2d 144, 
152, 539 N.W.2d 883 (1995).  See also Donaldson, 211 Wis. 2d at 
231 ("absent a finding of ambiguity, this court will not use the 
rules of construction to rewrite the language of an insurance 
contract"). 
I. 
No.  96-0328 
 
15
¶25 With these rules of interpretation in mind, we examine 
the question whether lead present in paint is plainly within the 
policy's definition of "pollutants." 
¶26 The term "pollutants" is defined in the policy.  
"Pollutants means any solid, liquid, gaseous or thermal irritant 
or contaminant, including smoke, vapor, soot, fumes, acids, 
alkalis, chemicals and waste.  Waste includes materials to be 
recycled, reconditioned or reclaimed." 
¶27 Under the policy, a pollutant includes the following: 
 (1) any solid irritant; (2) any liquid irritant; (3) any 
gaseous irritant; (4) any thermal irritant; (5) any solid 
contaminant; (6) any liquid contaminant; (7) any gaseous 
contaminant; and (8) any thermal contaminant. 
¶28 A 
number 
of 
words 
within 
the 
definition 
of 
"pollutants" are not defined in the policy.  When determining 
the ordinary meaning of these words, it is appropriate to look 
to the definitions in a non-legal dictionary.  Weimer, 216 Wis. 
2d at 723; Just v. Land Reclamation, 155 Wis. 2d 737, 456 N.W.2d 
570 (1990). 
¶29 A "contaminant" is defined as one that contaminates.  
American Heritage Dictionary of the English Language 406 (3d ed. 
1992).  "Contaminate" is defined as "1. To make impure or 
unclean by contact or mixture."  Id. at 406.   
¶30 An "irritant" is defined as the source of irritation, 
especially physical irritation.  Id. at 954.  "Irritation" is 
defined, in the sense of pathology, as "A condition of 
No.  96-0328 
 
16
inflammation, soreness, or irritability of a bodily organ or 
part."  Id. at 954. 
¶31 "Chemical," one of the examples of contaminants or 
irritants included in the policy's definition of "pollutants," 
is defined as "A substance with a distinct molecular composition 
that is produced by or used in a chemical process."  Id. at 327. 
 The dictionary also defines "chemistry" as "The science of the 
composition, structure, properties, and reactions of matter, 
especially of atomic and molecular systems.  2. The composition, 
structure, properties, and reactions of a substance."  Id. at 
328. 
¶32 "Lead" is also defined in the dictionary.  Lead is a 
"soft, malleable, ductile, bluish-white dense metallic element, 
extracted chiefly from galena and used in containers and pipes 
for corrosives, solder and type metal, bullets, radiation 
shielding, paints, and antiknock compounds."  Id. at 1023. 
¶33 "Lead" 
is 
a 
chemical 
element 
with 
particular 
properties.  It may be "used in a chemical process."  It clearly 
fits within the definition of "chemical."   
¶34 "Lead paint," which is composed of lead and other 
chemicals, starts out as a liquid and becomes a solid after it 
is applied and dries.  Over time, lead paint may chip and flake 
becoming solid "waste."  When it begins to deteriorate, it may 
give off "fumes."  When it begins to disintegrate, it becomes 
No.  96-0328 
 
17
dust – fine, dry particles of matter11 which, like smoke and 
soot, can float in the air affecting human respiration until it 
eventually settles on the ground. 
¶35 Lead poisoning from paint at residential properties is 
generally caused by the inhalation of lead-contaminated dust 
particles or toxic lead fumes through respiration or the 
ingestion of lead-based paint chips by mouth.12  The consequences 
can be disastrous for children: 
 
At 
high 
blood 
levels 
. 
. 
. 
lead 
may 
cause 
encephalopathy and death.  Survivors of encephalopathy 
may 
have 
lifelong 
severe 
disabilities, 
such 
as 
seizures 
and 
mental 
retardation. 
 
Lead 
toxicity 
affects almost every organ system, most importantly, 
the central and peripheral nervous systems, kidneys, 
                     
11 Dust is defined as "1. Fine, dry particles of matter.  2. 
A cloud of fine, dry particles.  3. Particles of matter regarded 
as the result of disintegration."  The American Heritage 
Dictionary of the English Language (3rd edition), p. 572. 
12  Lin-Fu, J., Vulnerability of Children to Lead Exposure 
and Toxicity, 289 N. ENG. J. MED. 1229, 1231 (1973). 
Statement on Childhood Lead Poisoning, 79 Pediatrics 457, 
459 (March 1987): 
A previously unforeseen, but increasingly recognized 
danger is that of improper removal of lead-based paint 
from older houses during renovation or, ironically, 
during cleaning to protect children.  Torches, heat 
guns, and sanding machines are particularly dangerous 
because they can create a lead fume.  Sanding not only 
distributes lead as a fine dust throughout the house 
but also creates small particles that are more readily 
absorbed than paint chips. . . .  Proper cleaning of 
the dust and chips produced in deleading must include 
complete removal of all chipping and peeling paint and 
vacuuming and thorough wet mopping, preferably with 
high-phosphate 
detergents. 
 
This 
waste 
must 
be 
discarded in a secure site.  (Emphasis supplied). 
No.  96-0328 
 
18
and blood. . . .  Lead interferes with enzymes that 
catalyze the formation of heme.  It also inhibits both 
prenatal and postnatal growth.  Lead impairs hearing 
acuity.  Lead is a carcinogen in laboratory animals, 
and there is some evidence for carcinogenicity in 
workers exposed to lead but not in children. 
 
Although the impairment of cognition in young children 
. . . has been reported, no threshold has been 
identified. . . .  The relationship between lead 
levels and IQ deficits was found to be remarkably 
consistent.  A number of studies have found that for 
every 10 mug/dL increase in blood lead levels, there 
was a lowering of mean IQ in children by four to seven 
points.  (sources omitted) 
Lead Poisoning:  From Screening to Primary Prevention, 92 
Pediatrics 176, 177 (July 1993).   
¶36 There is also concern about lead poisoning in the 
workplace.  Lead poisoning may result in complaints of weakness, 
weight loss, lassitude, insomnia, and hypotension.  It may also 
disturb the gastrointestinal tract, including constipation, 
anorexia, and cause abdominal discomfort or actual colic which 
may be excruciating.  Anemia is frequently associated with lead 
poisoning.  The patient's gums may reveal a blue or blue-black 
line in the presence of poor dental hygiene.  See Nick H. 
Proctor, et al., Chemical Hazards of the Workplace 294 (2d ed. 
J.B. Lippincott Company 1988).13 
                     
13 In the early 1980s, Wisconsin passed a "Right to Know" 
law giving employees the right to request information from an 
employer 
about 
potentially 
dangerous, 
health-affecting 
substances used in the workplace.  Chapter 364, Laws of 1981.  
The law was similar to the older federal Occupational Safety and 
Health Act regulations.  The Wisconsin legislature cited 29 
C.F.R. Part 10, subpart Z in which there were numerous 
references to lead.  
No.  96-0328 
 
19
 
 
¶37 Lead is a solid contaminant.  Lead paint either is or 
threatens to be a solid or liquid contaminant.  Lead paint chips 
are a solid contaminant.  Lead paint fumes are a gaseous 
irritant or contaminant.  Lead paint dust is a solid (although 
sometimes an airborne) irritant or contaminant.  There is little 
doubt that lead derived from lead paint chips, flakes, or dust 
is an irritant or serious contaminant.14 
 
 
¶38 The plaintiff's complaint alleges that "between August 
1987 and March 1989, the plaintiff sustained lead poisoning by 
ingesting lead derived from paint chips, paint flakes and dust 
that was contaminated with lead derived from lead based paint at 
the premises located at 1102 North 15th Street, Milwaukee, 
Wisconsin."  (Emphasis added).  Peace's complaint suggests that 
the paint was contaminated by the lead.  Conceptually, we view 
the lead not as contaminating the paint but as giving the paint 
the potential to contaminate air, water, and the human body when 
it disperses.  Lead-based paint is an inchoate contaminant 
before it breaks down (unless it is directly discharged, say, 
                     
14 "Lead is an extremely toxic metal:  even a single atom of 
lead, once in the human body, binds to a protein and induces 
some damage; the greater the exposure, the more serious the 
effects.  Lead has no physiological function; any amount of body 
lead reflects environmental pollution."  Piomelli, S. Childhood 
Lead Poisoning in the '90s, 93 Pediatrics 508 (March 1994).  
"Lead is one of the most widespread environmental toxins facing 
American children."  Shannon, M. Lead Intoxication in Infancy, 
89 Pediatrics 87 (January 1992).  "Lead paint is a known 
carcinogen and highly dangerous environmental toxin."  Coyne, 
Lead Paint Abatement:  Who Should Pay?  2 WIS. ENVTL. L.J. 113, 
114 (Winter 1995). 
No.  96-0328 
 
20
into water); it becomes both an irritant and a contaminant after 
it breaks down into chips, flakes, dust, or fumes. 
II. 
 
¶39 The second issue is whether Peace's injuries arose out 
of the "discharge, dispersal, release or escape of pollutants. 
. . ." 
 
¶40 The words "discharge," "dispersal," "release," and 
"escape" are not defined in the policy, but they appear to 
describe the entire range of actions by which something moves 
from 
a 
contained 
condition 
to 
an 
uncontained 
condition.  
"Release" is a transitive verb.  "Discharge," "disperse," and 
"escape" 
are 
verbs 
that 
can 
be 
either 
transitive 
or 
intransitive.  This implies that the movement from a contained 
condition to an uncontained condition can be either intentional 
and purposeful or accidental and involuntary.  In its transitive 
form, the verb "discharge" is defined:  "To release, as from 
confinement. . . ."  In its intransitive form, the verb 
"discharge" is defined, in part, as "To pour forth, emit, or 
release contents."  The American Heritage Dictionary of the 
English Language (3rd edition), p. 530.  "Escape" is defined, in 
part, as "1. To break loose from confinement. . . .  2. To issue 
from confinement or an enclosure; leak or seep out. . . ."  Id. 
at 625. 
 
¶41 In Employers Cas. Co. v. St. Paul Fire & Marine Ins. 
Co., 52 Cal. Rptr. 2d 17, 23 (Cal. App. 2 Dist. 1996), the 
California Court of Appeals stated:  
 
No.  96-0328 
 
21
Words in an insurance policy are to be given their 
ordinary and popular meanings.  Therefore, we look to 
the ordinary meanings of discharge, dispersal, release 
and escape.  Discharge is a release, emission or 
issuance.  (Webster's New Collegiate Dict. (9th ed. 
1984) p. 360).  Dispersal is a scattering, spreading 
or distribution.  (Id. at p. 365).  Release is a 
liberation, freeing, or permitting to escape.  (Id. at 
p. 994).  Escape is a leaking or overflow.  (Id. at p. 
424).  These terms taken together constitute a 
comprehensive description of the processes by which 
pollutants may cause injury to persons or property. 
¶42 We believe the plain language of the policy covers the 
release of paint containing lead from a wall or ceiling into the 
air or onto the floor.15  "Common sense tells us that lead paint 
that never leaves a wall or ceiling does not cause harm.  
Implicit in the Negligence Complaint . . . must be an allegation 
that the lead paint somehow separated from the wall or ceiling, 
and entered the air, or fell on the floor, furniture or fixtures 
in the apartment."  Lefrak Organization, Inc. v. Chubb Custom 
Ins. Co., 942 F. Supp. 949, 954 (S.D.N.Y. 1996). 
¶43 The court of appeals adopted this theory in three 
cases, United States Fire Ins. Co. v. Ace Baking Co., 164 Wis. 
2d 499, 476 N.W.2d 280 (Ct. App. 1991); Vance v. Sukup, 207 Wis. 
2d 578, 558 N.W.2d 683 (Ct. App. 1996), vacated, 211 Wis.2d 529, 
568 N.W.2d 297 (1997); and Peace v. Northwestern Nat'l Ins. Co., 
                     
15 A 
major 
environmental 
problem 
can 
be 
created 
by 
uninformed or careless efforts to remove lead paint from painted 
surfaces.  See Shannon, Lead Intoxication in Infancy, 89 
Pediatrics 87 (January 1992) ("Home renovation, when not being 
done for the purpose of deleading, has been identified as a 
significant predictor of elevated lead levels in children.  Use 
of heat guns and sanding create particularly toxic lead fumes or 
lead dust which are efficiently absorbed after ingestion and/or 
inhalation."). 
No.  96-0328 
 
22
No. 96-0328, unpublished slip op. (Wis. Ct. App. Feb. 4, 1997), 
vacated, 211 Wis. 2d 529, 568 N.W.2d 297 (1997). 
¶44 In Ace Baking, an ice cream cone manufacturer stored 
ice cream cones in the same warehouse that stored a fabric 
softener containing the fragrance additive linalool.  The 
linalool contaminated the ice cream cones, causing them to smell 
and taste like soap.  The issue was whether the linalool was a 
pollutant and whether it had been released, discharged, or 
dispersed to cause property damage.  The court found that 
linalool was a pollutant because it was a foreign substance 
which had contaminated the cones.  The court then said: 
 
[I]t is a rare substance indeed that is always a 
pollutant; the most noxious of materials have their 
appropriate 
and 
non-polluting 
uses. 
 
Thus, 
for 
example, oil will "pollute" water and thus foul an 
automobile's radiator, 
but be essential 
for the 
engine's lubrication.  Conversely, water can "pollute" 
oil and thus foul the engine, but be essential for the 
automobile's radiator.  Here, although linalool is a 
valued ingredient for some uses, it fouled Ace 
Baking's products.  Accordingly it was a "pollutant" 
in relation to those products. 
Ace Baking, 164 Wis. 2d at 505 (emphasis in original). 
 
¶45 In Vance, the court built on its analysis in Ace 
Baking.  As here, Vance involved a minor allegedly injured by 
lead-based paint in his rented premises.  The court said: 
 
We agree with the trial court's conclusion . . . that 
lead is not a "contaminant" in paint to which it was 
added deliberately by the manufacturer, any more than 
the fragrance linalool in Ace Baking was a contaminant 
in the fabric softener. . . .  As we noted in Ace 
Baking, a substance's status as either a valued 
ingredient or a contaminant depends on where it is: 
. . . Once the lead escaped from the painted surfaces, 
No.  96-0328 
 
23
however, either by leaving the paint or because the 
paint 
itself 
chipped 
off, 
the 
lead 
became 
a 
"contaminant" – a substance that did not belong in its 
new environment, just as Ace Baking's linalool became 
a contaminant once it left the fabric softener. 
Vance, 207 Wis. 2d at 583-84. 
 
¶46 The court ruled that lead paint ingested from "intact 
accessible painted surfaces" had not discharged, dispersed, 
seeped, migrated, released, or escaped and thus was not covered 
by the pollution exclusion clause.  Id. at 585.  By implication, 
lead that had left "intact accessible painted surfaces" through 
paint chips, flakes, and dust had discharged, dispersed, 
released, or escaped. 
 
¶47 The implication was confirmed in the first Peace 
opinion, where the court of appeals said: 
 
We conclude that our recent decision, Vance v. Sukup 
. . . is dispositive of this case.  In Vance, we 
analyzed whether an insurer had a duty to defend based 
on whether there was coverage arising from a child's 
"ingesting lead derived from intact accessible painted 
surfaces, paint chips, paint flakes and dust that was 
contaminated with lead derived from lead based paint 
at the premises. . . .  We concluded that, analogous 
to the fabric softener in Ace Baking, lead paint was a 
contaminant 
under 
the 
pollution 
exclusion 
clause 
'[o]nce the lead escaped from the painted surfaces 
. . . either by leaving the paint or because the paint 
itself chipped off. . . .  We went on to conclude, 
however, that the insurer nevertheless had a duty to 
defend because the plaintiff's complaint had also 
alleged injury resulting from "intact" accessible 
painted surfaces.  By contrast, the Peace complaint 
fails to allege any injury resulting from lead other 
than that "derived from paint chips, paint flakes and 
dust." 
Peace, slip op. at 5. 
No.  96-0328 
 
24
¶48 After considering the analysis in these cases, we 
conclude that the pollution exclusion clause in Djukic's policy 
excludes bodily injury from the ingestion of lead in paint that 
chips, flakes, or breaks down into dust or fumes.  When the 
"pollutant" lead - once contained - begins to disperse, 
discharge, or escape from the containment of the painted 
surface, it falls within the plain language of the pollution 
exclusion clause.16   
¶49 The following courts have reached the same conclusion: 
Shalimar Contractors Inc. v. American States Insurance Co., 975 
F. Supp. 1450 (M.D. Ala. 1997); St. Leger v. American Fire & 
Casualty Ins. Co., 870 F. Supp. 641 (E.D. Pa. 1994), aff'd 
without opinion, 61 F.3d 896 (3rd Cir. 1995); Kaytes v. Imperial 
Casualty & Indemnity Co., No. Civ. A 93-1573, 1994 WL 780901 
(E.D. Pa. Jan. 6, 1994); Auto-Owners Ins. Co. v. Hanson, 588 
N.W.2d 777 (Minn. App. 1999); Oates by Oates v. State, 597 
N.Y.S.2d 550 (N.Y. Ct. Cl. 1993), appeal withdrawn after 
settlement, 615 N.Y.S. 2d 993 (1st Dep't 1994); cf. U.S. 
Liability Ins. Co. v. Bourbeau, 49 F.3d 786 (1st Cir. 1995). 
¶50 A contrary conclusion was reached in Sphere Drake Ins. 
Co. v. P.L.C. Realty Co., 990 F. Supp. 240 (S.D.N.Y. 1997); 
                     
16 In the many lead paint cases, courts have struggled with 
the metaphysical question of exactly what the "pollutant" is.  
We conclude that "lead" is always a solid contaminant or 
"pollutant" in the same way that a loaded pistol is a dangerous 
weapon, even when it is locked up in a gun case, and a mamba is 
a deadly poisonous snake, even when it is confined in a reptile 
house. 
No.  96-0328 
 
25
Lefrak Organization, Inc. v. Chubb Custom Ins. Co., 942 F. Supp. 
949 
(S.D.N.Y. 
1996); 
Insurance 
Company 
of 
Illinois 
v. 
Stringfield, 685 N.E.2d 980 (Ill. App. 1997); Sullins v. 
Allstate Ins. Co., 667 A.2d 617 (Md. 1995); Atlantic Mutual Ins. 
Co. v. McFadden, 595 N.E.2d 762 (Mass. 1992); Weaver v. Royal 
Ins. Co. of America, 674 A.2d 975 (N.H. 1996); Byrd v. 
Blumenreich, 722 A.2d 598 (N.J. Super. Ct. App. Div. 1999); 
General Accident Ins. Co. v. Idbar Realty Corp., 622 N.Y.S. 2d 
417 (N.Y. Sup. Ct. 1994); Generali-U.S. Brands v. Caribe Realty 
Corp., 612 N.Y.S. 2d 296 (N.Y. Sup. Ct. 1994); Cepeda v. 
Varveris, 651 N.Y.S. 2d 185 (N.Y. App. Div. 1996); G.A. Ins. Co. 
v. Naimberg Realty Assoc., 650 N.Y.S. 2d 246 (N.Y. App. Div. 
1996). 
III. 
¶51 The first argument against the position we have taken 
is that the policy is ambiguous - that it can be given two 
different interpretations, one that provides coverage and one 
that does not.  As noted above, a finding of ambiguity is 
generally fatal to the insurer because ambiguity will be 
interpreted in favor of the insured, inasmuch as the insurer 
wrote the words in the policy. 
¶52 The first published case to interpret the pollution 
exclusion clause with respect to lead paint was Atlantic Mutual 
Ins. Co. v. McFadden, 595 N.E.2d 762 (Mass. 1992).  The court 
declared that the pollution exclusion clause was ambiguous: 
 
We conclude that an insured could reasonably have 
understood the provision at issue to exclude coverage 
No.  96-0328 
 
26
for injury caused by certain forms of industrial 
pollution, but not coverage for injury allegedly 
caused by the presence of leaded materials in a 
private residence. . . .  There simply is no language 
in the exclusion provision from which to infer that 
the provision was drafted with a view toward limiting 
liability 
for 
lead 
paint-related 
injury. 
 
The 
definition of "pollutant" in the policy does not 
indicate that leaded materials fall within its scope. 
Id. at 764.  This language was cited with approval by the 
Maryland court in Sullins, 667 A.2d at 620, and the conclusion 
has been repeated several times. 
¶53 However, in St. Leger v. American Fire & Casualty Ins. 
Co., 870 F. Supp. 641 (E.D. Pa. 1994), one of the first cases 
following McFadden, the court disagreed.  "Courts must not 
torture the policy language in order to 'create ambiguities 
where none exist.'"  Quoting from Kaytes v. Imperial Casualty & 
Indem. Co., No. 93-1573 (E.D.Pa. Jan. 6, 1994), the St. Leger 
court said:  "'[l]ead is a chemical that irritates and 
contaminates.' . . .  This is widely understood."  St. Leger, 
870 F. Supp. at 643. 
¶54 By contrast, while the court in Sullins, 667 A.2d 617, 
acknowledged that the interpretation of the clause by the 
insurer was reasonable,17 it asserted that the terms in the 
policy were susceptible to other interpretations.  It said:  
"While lead is clearly 'toxic,' a reasonably prudent layperson 
                     
17 The reasonableness of the interpretation was also noted 
by the court in Weaver v. Royal Ins. Co. of America, 674 A.2d 
975, 977 (N.H. 1996).  The court in Lefrak Organization, Inc. v. 
Chubb Custom Ins. Co., 942 F. Supp. 949, 955 (S.D.N.Y. 1996), 
also admitted the policy could be read to include lead paint as 
a "pollutant." 
No.  96-0328 
 
27
may not view lead as a 'chemical.' . . .  A reasonably prudent 
layperson may also interpret the terms 'contaminant' and 
'pollutant' as not including lead paint."  Sullins, 667 A.2d at 
620 (emphasis in original). 
¶55 This view was rebutted in U.S. Liab. Ins. Co. v. 
Bourbeau, 49 F.3d 786 (1st Cir. 1995), where the court said: 
 
In our view, the language of the Absolute Pollution 
Exclusion clause is clear and unambiguous on its face. 
 It is plainly intended to be an absolute bar to 
coverage for "any form of pollution."  The most 
notable aspect of the exclusion is its breadth - it 
applies to all releases of pollutants, as opposed to 
only those which are not "sudden and accidental." 
. . .  After reading this definition of pollutant, we 
do not see how an objectively reasonable insured would 
expect to be covered for contamination of property 
caused by the removal and discharge of lead paint 
chips.  In our view, an objectively reasonable person 
reading the Absolute Pollution Exclusion clause would 
consider lead paint both a "solid . . . contaminant" 
and a "toxic chemical."  An objectively reasonable 
person would also consider lead paint chips "materials 
to be disposed of" or "waste."  A reading of the 
specifically listed pollutants would only buttress 
this 
interpretation. 
 
The non-exclusive 
list of 
irritants and contaminants provides the insured a 
potpourri of pollutants to consider, from smoke to 
toxic chemicals.  We fail to see how an objectively 
reasonable insured could possibly believe that "smoke, 
vapor, 
soot, 
[and] 
fumes" 
would 
be 
considered 
pollutants while lead paint would not.  
Bourbeau, 49 F.3d at 788-89 (emphasis in original). 
 
¶56 Language inevitably creates some ambiguity.  See 
Harnischfeger Corp. v. Harbor Ins. Co., 927 F.2d 974, 976 (7th 
Cir. 1991), where the court said: 
 
Drafters cannot anticipate all possible interactions 
of fact and text, and if they could the attempt to 
cope with them in advance would leave behind a 
No.  96-0328 
 
28
contract more like a federal procurement manual than 
like a traditional insurance policy. 
Whether the nuances and imprecision of general language equal 
ambiguity as a matter of law is a determination influenced by 
perception and perspective.  A court must do its best to 
ascertain the objective expectations of the parties from the 
language in the policy. 
¶57 In two recent decisions involving lead paint, courts 
have adopted a plain reading approach as opposed to a technical 
reading approach in their focus on the pollution exclusion 
clause.  In Shalimar Contractors, Inc. v. American States Ins. 
Co., 975 F. Supp. 1450, 1456-57 (M.D. Ala. 1997), the court 
said: 
 
The Plaintiff does not assert that any particular 
language in the present [pollution] exclusion is 
ambiguous.  The Plaintiff offers no contention that 
any word or phrases in this exclusion could be 
reasonably 
interpreted 
by 
people 
of 
ordinary 
intelligence to have two contradictory meanings. . . . 
¶58 After reviewing such cases as Lefrak, Sullins, and 
McFadden, the court declared: 
 
The court finds . . . that such a laborious reading of 
the terms "discharge, disperal, (sic) release and 
escape" and "pollution" is not permitted under Alabama 
law.  According to the Alabama Supreme Court, the 
terms of an insurance exclusion "should be given the 
meaning that a person of ordinary intelligence would 
reasonably think the language had."  Under that 
directive, the court finds that the terms in an 
insurance exclusion cannot be defined by resort to the 
highly technical and specific definitions under the 
environmental laws, such as those contained in the 
Code of Federal Regulations. . . .  The court agrees 
with American that it cannot be seriously contended 
No.  96-0328 
 
29
that lead is not a pollutant within the meaning of the 
pollution exclusion. 
American States, 975 F. Supp. at 1457. 
¶59 In Auto-Owners Ins. Co. v. Hanson, 588 N.W.2d 777 
(Minn. Ct. App. 1999), the court followed Board of Regents v. 
Royal Ins. Co., 517 N.W.2d 888 (Minn. 1994), where the court 
applied "a non-technical, plain-meaning approach to interpreting 
a pollution exclusion, and found that asbestos fibers qualified 
as an 'irritant' where the policy precluded from coverage 
damages caused by the 'discharge, dispersal, release or escape 
of . . . irritants.' . . .  The court stated that it would be 'a 
disservice to the English language if we were to say that 
asbestos fibers, which are a health hazard because of their 
irritant effects on the human body, were not an irritant.'" Id. 
at 779.  The court indicated that it would follow an ordinary 
meaning approach in analyzing the clause with respect to lead 
paint.  "We must read these cases [like Sphere Drake Ins. Co.] 
in the shadows of Royal, where the court rejected the terms-of-
art approach."  Auto-Owners, 588 N.W.2d at 780. 
¶60 Looking at the text of the pollution exclusion clause 
in relation to the facts of this case, we conclude that the 
clause is not ambiguous.  The key term in the clause - 
"pollutants" - is specifically defined in the policy; the 
definition cannot be undone by different notions of "pollution" 
outside the policy, unrelated to the policy language, unless 
such a "reading" produced absurd results.  In the text here, the 
words are not fairly susceptible to more than one construction. 
No.  96-0328 
 
30
 The pollution exclusion clause does not become ambiguous merely 
because the parties disagree about its meaning, Sprangers v. 
Greatway Ins. Co., 182 Wis. 2d 521, 537, 514 N.W.2d 1 (1994), or 
because they can point to conflicting interpretations of the 
clause by different courts.  If the existence of differing court 
interpretations inevitably meant ambiguity, then only the first 
interpretation by a court would count. 
¶61 Our decision in Donaldson v. Urban Land Interests, 
Inc., 211 Wis. 2d 224, 564 N.W.2d 728 (1997), is not 
inconsistent with this conclusion.  Donaldson was a "sick 
building" case in which Hanover Insurance Company attempted to 
exclude liability for the consequences of an inadequate air 
exchange system in a building.  The building defect caused an 
excessive accumulation of carbon dioxide in the work area.  
Hanover attempted to categorize exhaled carbon dioxide as a 
pollutant, justifying its invocation of the pollution exclusion 
clause.  This court disagreed.  We approved the analysis of 
Judge Daniel Anderson of the court of appeals, who dissented, 
saying that "a reasonable insured would not expect [the clause] 
to include the avoidance of liability for the accumulation of 
carbon dioxide in an office because provisions were not made for 
introducing fresh air into the office."  Id. at 229.  (citation 
omitted) 
¶62 This court found the pollution exclusion clause did 
not apply to the particular facts of that case.  We stated:  
"The pollution exclusion clause at issue here was intended . . . 
to have broad application.  However, we are not satisfied that 
No.  96-0328 
 
31
this fact brings exhaled carbon dioxide unambiguously within the 
policy definition of 'pollutant.'  Instead, we agree with Judge 
Anderson's dissent that the pollution exclusion clause does not 
plainly and clearly alert a reasonable insured that coverage is 
denied for personal injury claims that have their genesis in 
activities as fundamental as human respiration."  Id. at 231-32. 
 The 
court 
contrasted 
exhaled 
carbon 
dioxide 
with 
the 
nonexhaustive list of pollutants in the pollution exclusion 
clause and observed that exhaled carbon dioxide is universally 
present and generally harmless in all but the most unusual 
circumstances.  Id. at 234.  The same cannot be said for lead 
paint chips, flakes, and dust.  They are widely, if not 
universally, understood to be dangerous and capable of producing 
lead poisoning.18  The toxic effects of lead have been recognized 
                     
18 "The problem of childhood lead poisoning caused by the 
ingestion of lead-based paints has reached epidemic proportions 
in most of our large cities. . . .  The accessibility to flaking 
or peeling lead-based paint and to broken plaster, along with 
the lack of knowledge among parents that ingestion of such 
substances is dangerous and even lethal, is responsible for lead 
poisoning. . . .  Lead poisoning is a kind of pollution, a man-
made disease. . . .   It is a needless cause of mental 
retardation and death in young children."  LEAD-BASED PAINT 
POISONING PREVENTION ACT, S. Rep. No. 1432, 91st Cong., 2nd Sess. 
1970, 
U.S.C.C.A.N. 
6131. 
 
See 
also 
Council 
of 
Planning 
Librarians:  Lead Poisoning in Urban Children:  An Annotated 
Bibliography, October 1976.  This publication lists 241 articles 
dating from November, 1943 to June, 1975 concerning lead 
poisoning.  "The serious health hazard posed to children by 
exposure to lead-based paint is by now well established."  
Juarez, 672 N.E.2d at 139. 
No.  96-0328 
 
32
for centuries.19  Reasonable owners of rental property understand 
their obligation to deal with the problem of lead paint. 
IV. 
¶63 A second and related argument against our conclusion 
is that, although the words in the exclusion may be plain, an 
insured would not anticipate any literal application of those 
words to a lead paint injury; rather, a reasonable insured would 
expect coverage.  This argument has several parts.  First, it is 
argued, the exclusion does not expressly apply to lead paint-
related injuries.  Second, no widely-used consumer products or 
household products are enumerated in the exclusion.  Third, the 
words "discharge", "dispersal," "release," and "escape" are 
environmental terms of art.  Thus, a reasonable insured could 
have understood the exclusion to preclude coverage for injury 
caused by industrial pollution but not for injury arising from 
leaded materials in a residence.  Finally, it is unreasonable to 
apply the pollution exclusion clause to routine incidents such 
as paint peeling off a wall. 
A. 
¶64 Once again, the term "pollutants" is defined as "any 
solid, liquid, gaseous or thermal irritant or contaminant, 
including smoke, vapor, soot, fumes, acids, alkalis, chemicals 
                     
19  In the second century B.C., Greek physician Dioscorides 
said that "lead makes the mind give way."  Lead Poisoning:  From 
Screening to Primary Prevention, 92 Pediatrics 176 (July, 1993). 
 "Lead poisoning was described in the second century B.C. by the 
Greek physician-poet Nicander."  46 Am Jur Proof of Facts 2d 
150, 154 (1986). 
No.  96-0328 
 
33
and 
waste. 
 
Waste 
includes 
materials 
to 
be 
recycled, 
reconditioned or reclaimed."  While it is true that the 
definition makes no specific reference to lead or to any 
consumer or household products, it is also true that the 
definition in the exclusion does not mention any heavy metals or 
other notorious pollutants, covering them instead by broad 
language.20 
B. 
¶65 Throughout the country, injured parties and insured 
parties have resorted to the history of the pollution exclusion 
clause in an effort to show that it was intended to apply to 
industrial 
pollution 
and 
that 
the 
terms 
"discharge," 
"dispersal," "release," and "escape" are environmental terms of 
art. 
¶66 In Sphere Drake Ins. Co. v. Y.L. Realty Co., 990 F. 
Supp. 240, 243 (S.D.N.Y. 1997), the court summarized its view of 
the law as follows: 
 
                     
20 In Oates by Oates v. State, 597 N.Y.S.2d. 550, 553-54 
(N.Y. Ct. Cl. 1993), the court said:   
[The question is] whether lead paint is a pollutant 
within the definition.  CUNY argues that it is not 
because neither lead nor paint nor lead paint are 
specifically listed in the definition section of the 
policy as pollutants. . . .  It is indisputable, 
however, 
that 
lead 
paint 
is 
a 
chemical 
and 
a 
contaminant that can irritate or poison . . . and 
falls within the general tenor of the specifically 
listed pollutants.  Moreover, what would CUNY have 
USF&G do:  list every harmful chemical known to man in 
the definition section.  At some point, reality must 
be incorporated by reference. 
No.  96-0328 
 
34
Several courts recently have interpreted pollution 
exclusion clauses similar to the one at issue here.  
The overwhelming trend in these cases has been to hold 
that such clauses do not exclude contaminants such as 
lead paint poisoning. . . .  These courts have held, 
and 
this 
Court agrees, 
that pollution 
exclusion 
clauses refer only to industrial and environmental 
pollution. . . .  The language of the exclusion clause 
supports this interpretation.  The clause discusses 
injuries caused by "discharge, dispersal, release or 
escape of pollutants."  These are terms of art in 
environmental law, generally used to describe the 
improper disposal or containment of hazardous waste.  
Tufco Flooring, 409 S.E.2d at 699. 
¶67 The problem in dealing with this argument is that it 
calls for construction of the pollution exclusion clause based 
on materials outside the four corners of the policy.  In most 
jurisdictions, courts interpreting insurance contracts do not go 
outside the four corners of the policy unless and until they 
find ambiguity in the policy's terms.  Cf. Stanhope v. Brown 
County, 90 Wis. 2d 823, 848, 280 N.W.2d 711 (1979).  However, 
once 
a 
court 
finds ambiguity in 
the 
policy, 
it 
almost 
automatically rules against the insurer.  The Catch-22 in 
insurance cases is that once ambiguity has been found, the 
insurer will lose even if the insurer has the better argument 
about how to construe its clause based on evidence outside the 
insurance contract. 
¶68 Because we conclude that the clause is not ambiguous, 
we have no duty to explore materials outside the policy.  
Nonetheless, in the interest of intellectual integrity, the 
argument deserves response. 
¶69 The history of the pollution exclusion clause was set 
out in a recent law review article:  Shelly and Mason, 
No.  96-0328 
 
35
Application of the Absolute Pollution Exclusion to Toxic Tort 
Claims: 
 
Will 
Courts 
Choose 
Policy 
Construction 
or 
Deconstruction?  33 TORT & INS. L.J. 749 (1998).   
¶70 In 
1966, 
comprehensive 
general 
liability 
(CGL) 
insurance policies contained a broad coverage clause reading: 
 
The company will pay on behalf of the insured all sums 
which the insured shall become legally obligated to 
pay as damages because of bodily injury or property 
damage caused by accident. 
Quoted in Greenlaw, The CGL Policy and the Pollution Exclusion 
Clause:  Using the Drafting History to Raise the Interpretation 
Out of the Quagmire, 23 COLUM. J.L. & SOC. PROBS. 233, 235 (1990). 
 
¶71 In 1970, the standard CGL policy was revised to 
include a Qualified Pollution Exclusion, which excluded coverage 
for claims: 
 
Arising out of the discharge, dispersal, release or 
escape of smoke, vapors, soot, fumes, acids, alkalis, 
toxic chemicals, liquids or gases, waste materials or 
other irritants, contaminants or pollutants into or 
upon the 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 in original) 
33 TORTS & INS. L.J. at 752. 
¶72 In 1985, 
an Absolute Pollution Exclusion 
clause 
replaced the Qualified Pollution Exclusion clause.  Id. at 753. 
The words of the new model clause are nearly identical to the 
clause in the Northwestern policy.  The Absolute Pollution 
Exclusion (1) dropped the phrase "but this exclusion does not 
apply if such discharge, dispersal, release or escape is sudden 
and accidental;" (2) dropped the phrase "into or upon the land, 
No.  96-0328 
 
36
the atmosphere or any water course or body of water;" (3) 
restructured the exclusion and added four conditional phrases 
including the key phrase "at or from premises you own, rent or 
occupy;" and (4) dropped the adjective "toxic" before the word 
"chemicals."  The Shelley-Mason article provides an explanation 
why these changes were made.  We do not have to adopt their 
explanations in order to comprehend that the 1985 revision 
substantially broadened the pollution exclusion and made it 
applicable to premises owned, rented, or occupied by the 
insured.  Removing the adjective "toxic" before the noun 
"chemical" had the effect of expanding the number of chemicals 
regarded as pollutants.  We find these undisputed changes in the 
clause inconsistent with the proposition that the clause, after 
revision, was intended to apply solely to industrial pollution. 
 We agree with the court in Oates by Oates v. New York, 597 
N.Y.S.2d 550, 553 (N.Y. Ct. Cl. 1994), when it said:  "In all 
candor, we cannot imagine a more unambiguous statement of intent 
than, after being told by the courts that 'land, atmosphere and 
water course' imply industrial pollution, to replace such 
language with 'premises you own, rent or occupy.'" 
¶73 The seminal case relied upon by McFadden acknowledged 
the 
changes 
in 
the 
CGL 
but 
denied 
that 
they 
had 
any 
significance.  West American Insurance Co. v. Tufco Flooring 
East, Inc., 409 S.E.2d 692 (N.C. Ct. App. 1991), stated: 
 
[T]he pollution exclusion applies only to discharges 
into the environment.  Both the historical purpose 
underlying 
the 
pollution 
exclusion 
and 
operative 
policy terms indicate that a discharge into the 
No.  96-0328 
 
37
environment 
is 
necessary 
for 
the 
clause 
to 
be 
applicable. 
 
The historical purpose of the pollution exclusion 
limits the scope of the exclusion to environmental 
damage.  When the pollution exclusion was first 
instituted in the early 1970's, it applied, by its own 
terms, only to discharges of pollutants "into or upon 
land, the atmosphere or any water course or body of 
water. . . ." 
 
. . . 
 
In 1985, the insurance industry amended the pollution 
exclusion clause in the standard commercial liability 
policy in order to clarify certain issues that had 
arisen regarding the interpretation of the provision. 
. . .  Even though the new pollution exclusion does 
omit language requiring the discharge to be "into or 
upon land, the atmosphere or any water course or body 
of water" . . . this Court . . . refuses to change the 
historical limitation that the pollution exclusion 
clause does not apply to non-environmental damage. 
West American, 409 S.E.2d at 699. 
 
¶74 Then the court went on to assert that the terms 
employed in the clause "imply that there must be a discharge 
into the environment before coverage can be properly denied."  
Id. 
 
The operative terms in the version of the pollution 
exclusion 
clause 
at 
issue 
in 
this 
case 
are 
"discharge," "dispersal," "release," and "escape."  
While they are not defined in the policy, the terms 
"discharge" 
and 
"release" 
are 
terms 
of 
art 
in 
environmental law and include "escape" by definition 
and "dispersal" by concept.  (emphasis supplied) 
Id.  To support this sweeping claim, the court cited federal 
regulations interpreting the Resource, Conservation and Recovery 
Act (RCRA), Section 1004(3), namely, 40 C.F.R. § 260.10 (1990); 
and § 101(22) of the Comprehensive Environmental Response, 
No.  96-0328 
 
38
Compensation, and Liability Act of 1980 (CERCLA), 42 U.S.C. 
§ 9601(22) (1988).  Id. at 699-700. 
 
¶75 The 
Resource, Conservation 
and Recovery Act was 
approved in 1976,21 and the Comprehensive Environmental Response, 
Compensation, and Liability Act of 1980 was approved in 1980.22  
The Qualified Pollution Exclusion clause used the four terms at 
issue in 1970.  The two authorities cited by the court do not 
prove the hypothesis that these four common terms are terms of 
art for industrial pollution. 
 
¶76 A quick check of the Wisconsin Statutes shows that 
these terms are used in many situations completely unrelated to 
the environment, including criminal law.  Citing a multitude of 
criminal justice statutes that use these common terms would not 
transform the terms into criminal justice terms of art. 
C. 
 
¶77 The final contention is that it is unreasonable to 
apply the pollution exclusion clause to routine incidents such 
as paint peeling off a wall.  For this proposition, Peace cites 
Pipefitters Welfare Educ. Fund v. Westchester Fire Ins. Co., 976 
F.2d 1037, 1043-44 (7th Cir. 1992), where the court said: 
 
Without 
some 
limiting 
principle, 
the 
pollution 
exclusion clause would extend far beyond its intended 
scope, and lead to some absurd results. . . . 
 
To redress this problem, courts have taken a common 
sense approach when determining the scope of pollution 
                     
21 Pub.L. 94-580, October 21, 1976, 90 Stat. 2795. 
22 Pub.L. 96-510, December 11, 1980, 94 Stat. 2767. 
No.  96-0328 
 
39
exclusion 
clauses. 
. . . 
[citing 
three 
cases, 
including McFadden]  The bond that links these cases 
is plain.  All involve injuries resulting from 
everyday 
activities 
gone 
slightly, 
but 
not 
surprisingly, awry.  There is nothing unusual about 
paint peeling off a wall, asbestos particles escaping 
during the installation or removal of insulation, or 
paint drifting off the mark during a spray-painting 
job. 
 
A 
reasonable 
policyholder, 
these 
courts 
believed, 
would 
not 
characterize 
such 
routine 
incidents as pollution.   
¶78 More urgency was expressed toward the problem of lead 
poisoning from paint in an award-winning law review article by 
Martha R. Mahoney, who wrote: 
 
Six hundred seventy-five thousand American children 
are estimated to have blood lead levels indicating 
lead toxicity.  Four to five million more have blood 
lead levels associated with impaired neurological and 
intellectual functions. 
 
The 
two 
most 
important 
sources of exposure among children are lead-based 
paint and household dust. 
Martha R. Mahoney, Four Million Children at Risk:  Lead Paint 
Poisoning Victims and the Law, 9 STAN. ENVTL. L.J.  46-47 (1990). 
 The scope and gravity of lead poisoning prompted the United 
States Department of Health and Human Services to say in 1991 
that 
childhood 
lead 
poisoning 
was 
"the 
most 
important 
environmental health problem for young children."  92 Pediatrics 
176 (1993). 
 
¶79 Even though substantial progress has been made in 
reducing the sources of lead contamination, the Committee on 
Environmental Health of the American Academy of Pediatrics 
issued a report in 1998 which stated, in part, that "lead 
remains a common, preventable environmental health threat."  
Screening for Elevated Blood Lead Levels, 101 Pediatrics 1072 
No.  96-0328 
 
40
(1998). 
 
The 
Environmental 
Protection 
Agency, 
Office 
of 
Pollution Prevention and Toxics, continues to issue publications 
warning homeowners of the importance of lead abatement in homes 
built before 1978. 
 
¶80 This court could devote pages to a twentieth century 
history of the evolving awareness of lead poisoning in the home 
and workplace and the role of lead-based paint in this national 
problem.  By the mid-1980s, recognition of the problem was 
widespread.23  Congress had passed the Lead-Based Paint Poisoning 
Prevention Act of 1971, strengthened it in 1973, and revised it 
again 
in 
1988. 
 
States, 
including 
Wisconsin, 
had 
taken 
legislative action.24  Many local governments, including the City 
                     
23 Antwaun A. v. Heritage Mut. Ins. Co., No. 97-0332, op. at 
12-13 (S. Ct. July 7, 1999) (of even date), cites additional 
legislation identifying the dangers associated with lead paint. 
    
24 Wisconsin Stat. § 151.03 (1987-88), part of the Toxic 
Substances subchapter of the Environmental Health chapter, 
forbid any person from applying lead-bearing paints to any 
exposed surface on the inside of a dwelling, the exposed surface 
of a structure used for the care of children, or any fixture or 
other object placed in or upon any exposed surface of a dwelling 
and ordinarily accessible to children.  Wisconsin Stat. § 151.03 
was subsequently amended by 1993 Act 27, § 431, and renumbered 
as Wis. Stat. § 254.12. 
No.  96-0328 
 
41
of 
Milwaukee, 
had 
enacted 
ordinances 
and 
developed 
lead 
poisoning prevention and screening programs.25 
¶81 We do not believe it is necessary to detail all the 
articles in professional journals as well as newspapers, popular 
magazines, and business publications, and all the government 
reports and regulations, to support our conclusion that by the 
mid-1980s, an ordinary property owner could not reasonably 
expect to purchase a standard liability insurance policy with a 
pollution exclusion clause, and thereby shift to the insurer 
liability 
for 
personal 
injuries 
arising 
from 
a 
person's 
ingestion of lead in chipped or flaked paint or dust at or from 
the insured premises.  The phrase "at or from premises you own, 
rent, or occupy" directly counters the notion that the policy is 
confined to industrial pollution, for there is not much 
familiarity with industrial pollution from rented apartments. 
¶82 Djukic 
received 
a 
citation 
from 
the 
City 
of 
Milwaukee's Bureau of Inspection and Environmental Health six 
weeks before Djukic purchased the Northwestern policy.  This 
citation would not ordinarily help explain the pollution 
                     
25 In August 1987, Milwaukee Mayor Henry Maier suggested the 
fight against lead poisoning required a new city ordinance that 
would force building owners to remove lead based paint.  Don 
Behm, Unsafe lead levels found in 10% of children tested, Milw. 
J., August 24, 1987.  This led to a new ordinance adopted in 
1988 that stated, in part:  "Any lead based substance, surface 
or object which may contribute to an increased body burden of 
lead due to its condition, location or nature, or which is 
easily accessible to children, is declared a public health 
hazard and nuisance as defined in s. 80-1-2."  Milwaukee 
Ordinance 66-22 (April 1, 1988).     
No.  96-0328 
 
42
exclusion clause.  However, we note that the citation said in 
part: 
 
A recent inspection of premises at the above address 
disclosed the presence of loose, peeling, flaking or 
chipped 
paint 
which 
contained 
a 
hazardous 
concentration of lead.  These conditions tend to cause 
a disease known as lead poisoning.  You are hereby 
notified that each condition listed below is a 
violation . . . and immediate corrective action is 
required to protect the public health.  You are hereby 
directed 
to 
permanently 
correct 
these 
hazardous 
conditions. . . .  For your information, a brochure 
dealing with the permanent elimination of lead paint 
hazards is enclosed. . . . 
 
A reinspection will be made after an elapse of thirty 
days following service of this order. . . .  (emphasis 
supplied) 
¶83 Northwestern's pollution exclusion clause reads in 
part: 
 
The policy excludes coverage for:  
 
. . . 
 
(2) Any loss, cost, or expense arising out of any 
governmental direction or request that you test for, 
monitor, clean up, remove, contain, treat, detoxify 
or neutralize pollutants.  (emphasis supplied) 
¶84 A reasonable insured property owner would not believe 
that this quoted exclusion did not apply to the kind of 
corrective action ordered in the citation. 
V. 
¶85 In interpreting the pollution exclusion clause in 
Djukic's insurance policy, we conclude that lead present in 
paint in a residential property is a pollutant.  We further 
conclude that when lead-based paint either chips, flakes, or 
No.  96-0328 
 
43
deteriorates to dust, that action is a discharge, dispersal, 
release, or escape within the meaning of the terms in the 
policy.  As a result, the policy excludes coverage for lead 
poisoning injuries arising out of the ingestion of lead derived 
from lead-based paint chips, flakes, or dust.  Accordingly, the 
decision of the court of appeals is reversed and the cause is 
remanded to the circuit court. 
By the Court.—The decision of the court of appeals is 
reversed and the cause remanded. 
96-0328.awb 
 
1 
¶86 ANN 
WALSH 
BRADLEY, 
J. (Concurring).  I 
join the 
majority opinion.  I write separately only to respond to the 
interpretation of Donaldson v. Urban Land Interests. Inc., 211 
Wis. 2d 224, 564 N.W.2d 728 (1997), rendered by Justice Crooks’ 
dissent, and to address that dissent’s mischaracterization of 
the majority opinion. 
¶87 According to the dissent, the majority opinion is 
“blatant[ly] inconsisten[t]” with Donaldson.  Justice Crooks’ 
dissent at 5.  I disagree.  Rather, I am convinced that any 
inconsistency between Donaldson and the majority opinion is the 
result of that dissent’s errant reading of Donaldson. 
¶88 The dissent asserts that the majority opinion is 
inconsistent with Donaldson because the opinion concludes that 
the pollution exclusion clause is unambiguous when “only two 
years ago [this court concluded] that the very same clause is 
ambiguous.” 
 
Justice 
Crooks’ 
dissent 
at 
4 
(emphasis 
in 
original).  However, that is not what this court said in 
Donaldson.  We said: 
 
The pollution exclusion clause at issue here was 
intended . . . to have broad application.  However, we 
are not satisfied that this fact brings exhaled carbon 
dioxide unambiguously within the policy definition of 
“pollutant.”  Donaldson, 211 Wis. 2d at 231-32. 
The focus of our inquiry was on the substance at issuecarbon 
dioxidenot on the terms of the policy. 
¶89 Indeed, the unique substance at issue drove this 
court’s decision in Donaldson.  Quite simply, the involuntary 
exhaling of carbon dioxide cannot reasonably be considered the 
96-0328.awb 
 
2 
“release” of “pollution.”  As we said in Donaldson, the 
pollution exclusion clause of the policy does not encompass 
“claims that have their genesis in activities as fundamental as 
human respiration.”  Donaldson, 211 Wis. 2d at 232. 
¶90 In assessing coverage for the release of a pollutant, 
the act of human breathing is in sharp contrast to the peeling 
of lead paint from residential surfaces.  Lead is a substance 
that has been recognized for centuries as harmful.  It is a 
substance that is heavily restricted by the modern regulatory 
state.  As the majority correctly points out, while lead may 
have been intentionally added to paint, its release from the 
painted surface in the form of dust or chips is the release of a 
pollutant. 
¶91 Finally, I address the mischaracterization of the 
majority opinion as an “apparent assault on child victims of 
lead poisoning.”  Justice Crooks’ dissent at 15.  Such an attack 
obfuscates rather than illuminates the discussion.  This case is 
not about whether one is for or against “child victims.”  It is 
about the interpretation of an exclusionary clause in a policy 
of insurance.   
¶92 In interpreting the language of this insurance policy 
it should make no difference if those seeking coverage are 
children or adults.  It should make no difference if the claim 
involves one child or many children.  The interpretation of the 
language of an insurance policy should not be influenced in such 
a result-oriented way.  Accordingly, I concur.  
 
No. 96-0328.ssa 
 
1 
¶93 SHIRLEY S. ABRAHAMSON, CHIEF JUSTICE (dissenting).    
As the majority opinion carefully documents, courts around the 
country have divided over the proper interpretation of the 
pollution exclusion clause.  Majority op. at 24-25.  When 
numerous courts disagree about the meaning of language, the 
language cannot be characterized as having a plain meaning.  
Rather, the language is ambiguous; it is capable of being 
understood in two or more different senses by reasonably well-
informed persons even though one interpretation might on careful 
analysis seem more suitable to this court.  Lincoln Savings 
Bank, S.A. v. DOR, 215 Wis. 2d 430, 452, 573 N.W.2d 522 (1998) 
(Abrahamson, C.J., concurring). 
¶94 I would hold that a reasonable person in the position 
of the insured would reasonably expect liability coverage.  The 
pollution exclusion clause does not plainly and clearly alert a 
reasonable insured that coverage is denied for personal injury 
claims arising from lead paint.  Therefore the pollution 
exclusion clause should be construed narrowly against the 
insurer with any ambiguity resolved in favor of coverage.  
Donaldson v. Urban Land Interests, Inc., 211 Wis. 2d 224, 230, 
564 N.W.2d 728 (1997). 
¶95 For this reason, I dissent. 
 
No. 96-0328.npc 
 
1 
¶96 N. PATRICK CROOKS, J. (dissenting).   The result of 
the majority opinion is to deprive young Kevin Peace, and, in 
many instances, other child victims of lead poisoning, of an 
effective remedy for their harm.  By stripping landlords who may 
have been negligent concerning lead-based paint of insurance 
coverage, the majority guarantees that, frequently, no damages 
will ever be collected for such children.  In reaching its 
conclusion, the majority fails to apply the proper method for 
analyzing whether an insurer has a duty to defend, disregards 
this court's two-year-old decision in Donaldson v. Urban Land 
Interests, Inc., 211 Wis. 2d 224, 564 N.W.2d 728 (1997), and 
ignores the well-established principle that insurance policies 
are to be interpreted from the perspective of the reasonable 
insured with any ambiguities construed in the insured’s favor.  
¶97 Somewhere in the course of its lengthy discussion, the 
majority loses sight of the issue in front of this court:  
whether 
summary 
judgment 
was 
appropriately 
granted 
to 
Northwestern on the issue of Northwestern's duty to defend its 
insured in this action.  There is no analysis whatsoever of the 
duty to defend in the majority opinion.  This court has recently 
and often explained the method to be employed by courts when 
analyzing whether an insurer has a duty to defend.26  The 
                     
26 See, e.g., Wausau Tile, Inc. v. County Concrete Corp., 
___Wis. 2d___, 593 N.W.2d 445, 459 (1999); Doyle v. Engelke, 219 
Wis. 2d 277, 284-85, 580 N.W.2d 245 (1998); General Cas. Co. v. 
Hills, 209 Wis. 2d 167, 176 & n.11, 561 N.W.2d 718 (1997); 
Newhouse ex rel. Skow v. Citizens Sec. Mut. Ins. Co., 176 Wis. 
2d 824, 834-35, 501 N.W.2d 1 (1993); School Dist. of Shorewood 
v. Wausau Ins. Cos., 170 Wis. 2d 347, 364, 488 N.W.2d 82 (1992). 
No. 96-0328.npc 
 
2 
question in such an analysis is not whether the claim is 
actually covered under the insurance policy.  See General Cas. 
Co. v. Hills, 209 Wis. 2d 167, 176 & n.11, 561 N.W.2d 718 
(1997).  See also School Dist. of Shorewood v. Wausau Ins. Cos., 
170 Wis. 2d 347, 364, 488 N.W.2d 82 (1992).  "The duty to defend 
is broader than the duty to indemnify, because the duty to 
defend 
is 
triggered 
by 
arguable, 
as 
opposed 
to 
actual, 
coverage."  General Cas., 209 Wis. 2d at 176 n.11.   
¶98 In determining whether there is a duty to defend, a 
court must compare the allegations in the complaint to the 
relevant insurance policy.  See id.; Shorewood, 170 Wis. 2d at 
364-65.  An insurer has a duty to defend whenever the 
allegations in the complaint would, if proved, result in a 
"possibility of recovery that falls under the terms and 
conditions of the insurance policy."  General Cas., 209 Wis. 2d 
at 176 (quoting Shorewood, 170 Wis. 2d at 364).  See Wausau 
Tile, Inc. v. County Concrete Corp., ___Wis. 2d___, 593 N.W.2d 
445, 459 (1999).  "Any doubt as to the existence of the duty to 
defend must be resolved in favor of the insured."  Wausau Tile, 
593 N.W.2d at 459.  See General Cas., 209 Wis. 2d at 176; 
Shorewood, 170 Wis. 2d at 364.   
¶99 In the instant case, the circuit court granted summary 
judgment to Northwestern, reasoning that Northwestern had no 
duty to defend because the allegations in Peace's complaint fell 
within the pollution exclusion clause of the insurance policy.  
If there is any possibility that Peace's claims, if proved, 
would result in liability under the terms of the policy, the 
No. 96-0328.npc 
 
3 
above principles require this court to hold that Northwestern 
has a duty to defend, and thus, that the summary judgment was 
improper.  Our task, then, is to examine the pollution exclusion 
clause to determine whether there is any possibility that 
Peace's claims might be covered.  
¶100 In Donaldson, this court interpreted a pollution 
exclusion clause identical in all relevant aspects to the clause 
in this case.  See Donaldson, 211 Wis. 2d at 228.  We held that 
in order for this pollution exclusion clause to apply to a 
particular set of facts, two conditions must be satisfied:  (1) 
 the alleged pollutant must fit "unambiguously within the 
pollution exclusion clause's definition of 'pollutant'"; and (2) 
the alleged pollutant must have been "discharge[d], disperse[d], 
etc., under the terms of the polic[y]."  Id. at 229.       
¶101 I 
begin 
by 
examining 
whether 
lead 
in 
paint 
unambiguously falls within the insurance policy's definition of 
"pollutant."  It is well established that terms in an insurance 
policy are ambiguous if they are fairly susceptible to more than 
one reasonable interpretation when read in context.  Id. at 230-
31.  See Kremers-Urban Co. v. American Employers Ins., 119 
Wis.2d 722, 735, 
351 
N.W.2d 156 
(1984). 
 
Equally 
well 
established is the rule that terms in an insurance policy must 
be interpreted from the perspective of the "reasonable insured." 
 See Donaldson, 211 Wis. 2d at 230 (citing General Cas., 209 
Wis. 2d at 175); Kremers-Urban, 119 Wis.2d at 735.  The words in 
the policy must be given the common, everyday meanings which 
No. 96-0328.npc 
 
4 
would be attributed to them by a lay person.  Kremers-Urban, 119 
Wis. 2d at 735. 
¶102 At first glance, the terms in the policy definition of 
"pollutant" might seem broad enough to include lead in paint.27 
The majority determines that "pollutant" unambiguously includes 
lead in paint, focusing almost exclusively on the words 
"contaminant" and "irritant" in the policy definition.  See 
majority op. at 18-19. 
¶103 However, the majority's approach directly contravenes 
this court's recent decision in Donaldson.  The majority 
concludes that the pollution exclusion clause is unambiguous, 
despite our conclusion only two years ago that the very same 
clause is ambiguous.  See majority op. at 29; Donaldson, 211 
Wis. 2d at 233.  In Donaldson, we were concerned that the words 
"irritant" and "contaminant" in the clause, "when viewed in 
isolation, are virtually boundless, for there is virtually no 
substance or chemical in existence that would not irritate or 
damage some person 
or property." 
 
Id. at 
232 (quoting 
Pipefitters Welfare Educ. Fund v. Westchester Fire Ins. Co., 976 
F.2d 1037 (7th Cir. 1992)).  We held that "[t]he reach of the 
                     
27 Perhaps 
Northwestern 
even 
intended 
the 
words 
"contaminant" or "irritant" in the clause to include lead in 
paint.  Even if this were the case, however, it would not answer 
the 
question 
of 
whether 
the 
definition 
of 
"pollutant" 
unambiguously includes lead.  In Donaldson v. Urban Land 
Interests, Inc., 211 Wis. 2d 224, 231-32, 564 N.W.2d 728 (1997), 
we found that the insurer's intention that the pollution 
exclusion clause be interpreted broadly did not control our 
interpretation of the clause.   
No. 96-0328.npc 
 
5 
pollution 
exclusion 
clause 
must 
be 
circumscribed 
by 
reasonableness, lest the contractual promise of coverage be 
reduced to a dead letter."  Id. at 233.   
¶104 Based on our determination that the scope of the 
pollution 
exclusion 
clause 
is 
restricted 
to 
reasonable 
applications, we did not focus in Donaldson on the broad terms 
of 
the 
pollution 
exclusion 
clause, 
such 
as 
"irritant," 
"contaminant," and "chemicals."  Instead, in considering whether 
carbon dioxide was unambiguously included within the clause, we 
carefully evaluated the expectations of the reasonable insured. 
 See id. at 232-34.  We stressed the "common sense" approach 
taken by courts in determining when the pollution exclusion 
clause is applicable.  Id. at 233 (quoting Pipefitters, 976 F.2d 
at 1043-44).  Because a reasonable insured would not necessarily 
understand carbon dioxide to be a "pollutant," we determined 
that the carbon dioxide was not unambiguously included within 
the definition of "pollutant" in the pollution exclusion clause. 
 Id. at 232-34.  
¶105 Donaldson, therefore, precludes a finding that an 
alleged pollutant is covered by the pollution exclusion clause 
simply because it is capable of fitting within the broad 
classifications of "contaminant" or "irritant."  The majority's 
expansive reading of the pollution exclusion clause effectively 
nullifies this court's decision in Donaldson that the scope of 
No. 96-0328.npc 
 
6 
the 
clause 
"must 
be 
circumscribed 
by 
reasonableness."28  
Donaldson, 211 Wis. 2d at 233.  
¶106 The 
majority 
attempts 
to 
justify 
the 
blatant 
inconsistency between its conclusion and this court's holding in 
Donaldson by stating that unlike the carbon dioxide involved in 
Donaldson, "[t]he toxic effects of lead have been recognized for 
centuries."  Majority op. at 31.   
¶107 The majority misses the point of Donaldson and ignores 
its plain applicability in this case.  It is clear from our 
decision in the wake of Donaldson to vacate the court of 
                     
28 The majority's overly broad reading of the pollution 
exclusion clause could have wide-ranging effects, as evidenced 
by the following examples discussed in Donaldson: 
[R]eading the clause broadly would bar coverage for 
bodily injuries suffered by one who slips and falls on 
the spilled contents of a bottle of Drano, and for 
bodily injury caused by an allergic reaction to 
chlorine in a public pool.  Although Drano and 
chlorine are both irritants or contaminants that 
cause, under certain conditions, bodily injury or 
property damage, one would not ordinarily characterize 
these events as pollution. 
 
Donaldson, 211 Wis. 2d at 233 (quoting Pipefitters Welfare Educ. 
Fund v. Westchester Fire Ins. Co., 976 F.2d 1037, 1043-44 (7th 
Cir. 1992)).   
Similarly, it has been argued that a broad reading of the 
pollution exclusion clause as covering all "contaminants" or 
"irritants" would render the policy's coverage illusory, because 
"scalding water from a faucet can irritate, spoiled food can 
poison, or trash (i.e., waste paper) on a stairway can cause a 
fall."  Oates by Oates v. New York, 597 N.Y.S.2d 550, 553 (N.Y. 
Ct. Cl. 1993).  The Oates court described this argument as "well 
taken," even though the court ultimately found that lead was a 
"pollutant."  Id. at 553-54.     
No. 96-0328.npc 
 
7 
appeals' original opinion in this case that we felt that our 
holding in Donaldson affected the outcome of this case,29 yet the 
majority today reaches the very same conclusion as that reached 
by the court of appeals in the opinion we vacated!   
¶108 Further, in Donaldson, we concluded that a reasonable 
insured would not necessarily understand carbon dioxide to be a 
"pollutant" because carbon dioxide build-up and inhalation is an 
"everyday activity 'gone slightly, but not surprisingly, awry.'" 
 Donaldson, 211 Wis. 2d at 233 (quoting Pipefitters, 976 F.2d at 
1043-44).  The language from Pipefitters which we chose to quote 
                     
29 The procedural history of this case evinces this court’s 
obvious opinion that our holding in Donaldson would have a 
significant effect on the analysis of this case, which involves 
the very same pollution exclusion clause.  Prior to Donaldson, 
the court of appeals determined in this case that the pollution 
exclusion 
clause 
precluded 
coverage 
for 
Peace's 
alleged 
injuries.  See Peace v. Northwestern Nat'l Ins. Co., No. 96-
0328, unpublished slip op. at 5 (Wis. Ct. App. Feb. 4, 1997) 
(per curiam).  Following Donaldson, we vacated the court of 
appeals' decision and remanded the matter for another decision 
in light of Donaldson.  See Peace v. Northwestern Nat’l Ins. 
Co., 211 Wis. 2d 529, 568 N.W.2d 297 (1997).  We also vacated 
the case upon which the court of appeals primarily relied, Vance 
v. Sukup, 207 Wis. 2d 578, 558 N.W.2d 683 (Ct. App. 1996).  See 
Vance v. Sukup, 211 Wis. 2d 529, 568 N.W.2d 297 (1997).   
In its second decision in this case, the court of appeals 
determined, in light of Donaldson, that the clause did not 
preclude 
coverage 
for 
Peace's 
injuries. 
 
See 
Peace 
v. 
Northwestern Nat'l Ins. Co., 215 Wis. 2d 165, 167, 573 N.W.2d 
197 (Ct. App. 1997).  Curiously, the majority of our court today 
reverses the court of appeals' second decision and reaches the 
same conclusion as that reached by the court of appeals in its 
initial decision, which we vacated after Donaldson.  It is 
unclear how citizens of this state are to derive guidance from 
decisions 
of 
this 
court 
when 
we 
set 
forth 
inconsistent 
interpretations of the same pollution exclusion clause in cases 
only two years apart.  
No. 96-0328.npc 
 
8 
specifically listed peeling paint as an example of an "everyday 
activit[y] gone slightly, but not surprisingly awry."  Id. at 
233 (quoting Pipefitters, 976 F.2d at 1043-44).  
¶109 Through its sparse discussion and dismissive treatment 
of Donaldson, the majority fails to acknowledge important and 
clearly applicable precedent from this court.30  Contrary to the 
majority, I conclude that Donaldson mandates a thorough, common-
sense analysis of whether a reasonable insured would interpret 
lead as unambiguously fitting within the definition of a 
"pollutant."  
¶110 "Pollutant" is a term which generally conjures up 
images of industrial smokestacks and heavy machinery in the mind 
of a reasonable lay person.  Dirty lakes, chemical-laden 
streams, and thick layers of smog typify the items which 
immediately occur to a person upon hearing the word "pollution." 
 The pollution exclusion clause does not refer to "lead," 
"paint," or any other comparable term which might give a hint to 
a reasonable insured that common materials which are benign in 
normal circumstances could qualify as "pollutants."  
¶111 Dictionary definitions likewise do not indicate that 
the term "pollutant" might encompass lead in paint.  "Pollutant" 
is defined in the American Heritage Dictionary as, "Something 
that pollutes, especially a waste material that contaminates 
                     
30 Other courts have recognized that Donaldson is applicable 
when determining whether lead in paint is a “pollutant” under 
the pollution exclusion clause.  See, e.g., Danbury Ins. Co. v. 
Novella, 727 A.2d 279, 281 (Conn. Super. Ct. 1998).  
No. 96-0328.npc 
 
9 
air, soil, or water."  American Heritage Dictionary 1402 (3d ed. 
1992).  The relevant definitions of "pollute" are: "1.  To make 
unfit for or harmful to living things, especially by the 
addition of waste matter. . . . 2.  To make less suitable for an 
activity, especially by the introduction of unwanted factors:  
The stadium lights polluted the sky around the observatory.  3. 
 To render impure or morally harmful; corrupt."  American 
Heritage Dictionary 1402 (3d ed. 1992). 
¶112 The lead in paint does not fit within these common 
definitions.  Lead was not "waste matter" added to the paint in 
this case, and it was not an "unwanted factor" in the paint.  On 
the contrary, lead was intentionally included as one of the 
desired ingredients in the paint at the time of the paint's 
original manufacture.  For this reason, a reasonable lay person 
would not necessarily view the lead in paint as a "pollutant."  
As one court explained: 
 
A common understanding of a pollutant is a substance 
that 
"pollutes" 
or 
renders 
impure 
a 
previously 
unpolluted object, as when chemical wastes leach into 
a clean water supply.  Here the lead did not pollute 
the paint:  it was purposefully incorporated into the 
paint from the start.  The paint was intentionally 
applied to the premises.  At the time, the paint was 
legal.  It was considered neither impure nor unwanted. 
Insurance Co. of Ill. v. Stringfield, 685 N.E.2d 980, 983-84 
(Ill. App. Ct. 1997).  See also West Am. Ins. Co. v. Tufco 
Flooring East, Inc., 409 S.E.2d 692, 698 (N.C. Ct. App. 1991) 
(holding that vapors from flooring resin were not a "pollutant" 
because flooring resin was not an unwanted "contaminant" at the 
No. 96-0328.npc 
 
10
time it was intentionally brought onto the premises).  It 
follows that the lead in paint is unlike the fabric softener 
which became attached to ice cream cones stored in the same 
warehouse in United States Fire Insurance Co. v. Ace Baking Co., 
164 Wis. 2d 499, 476 N.W.2d 280 (Ct. App. 1991).  Further, lead, 
like the carbon dioxide in Donaldson, is a common substance 
which is present as a harmless ingredient in ordinary items such 
as lead crystal.31  
¶113 Cases from other jurisdictions are all over the board 
on the issue of whether lead in paint unambiguously fits the 
                     
31 Without citation, the majority makes a statement to the 
effect that a substance which is a "pollutant" in one scenario 
must be a "pollutant" in every scenario, regardless of whether 
it is incorporated into another material.  See majority op. at 
24 n.16.  As I explained previously in the text and footnote 3, 
such a sweeping reading of the pollution exclusion clause is 
wholly contrary to our holding in Donaldson.   
Moreover, it is unclear how the majority reconciles its 
“once a pollutant, always a pollutant” rule with its reliance 
earlier in its opinion on United States Fire Insurance Co. v. 
Ace Baking Co., 164 Wis. 2d 499, 476 N.W.2d 280 (Ct. App. 1991), 
and Vance v. Sukup, 207 Wis. 2d 578, 558 N.W.2d 683 (Ct. App. 
1996), vacated, 211 Wis. 2d 529, 568 N.W.2d 297 (1997).  The 
majority points out that in Ace Baking, the court of appeals 
noted that the chemical linalool was a "valued ingredient for 
some uses" even though it was a "pollutant" in the particular 
factual setting of the case.  Majority op. at 22 (quoting Ace 
Baking, 164 Wis. 2d at 505).  The majority quotes the Ace Baking 
court as stating that "it is a rare substance indeed that is 
always a pollutant; the most noxious of materials have their 
appropriate and non-polluting uses."  Majority op. at 22 
(quoting Ace Baking, 164 Wis. 2d at 505).  The majority also 
quotes the following passage from Vance:  “As we noted in Ace 
Baking, a substance’s status as either a valued ingredient or a 
contaminant depends on where it is . . . .”  Majority op. at 22 
(quoting Vance, 207 Wis. 2d at 583-84).     
No. 96-0328.npc 
 
11
pollution exclusion clause's definition of "pollutant."  While 
some courts agree with the majority that lead is universally 
considered 
to 
be 
a pollutant,32 cases 
from 
other 
courts 
(including several state supreme courts) reach the opposite 
conclusion.33   Moreover, some of the cases cited by the majority 
in support of its position must be discarded by this court as 
contrary to our holding in Donaldson that the scope of the 
clause, despite its broad wording, must be "circumscribed by 
reasonableness." Donaldson, 211 Wis. 2d at 233.  See Shalimar 
Contractors, Inc. v. American States Ins. Co., 975 F. Supp. 
1450, 1457 (M.D. Ala. 1997); St. Leger v. American Fire and Cas. 
Ins. Co., 870 F. Supp. 641, 643 (E.D. Pa. 1994).  In any event, 
"the range and variety of judicial opinions bolsters the 
conclusion that the pollution exclusion here is ambiguous."  
                     
32 See, e.g., St. Leger v. American Fire and Casualty 
Insurance Co., 870 F. Supp. 641, 643 (E.D. Pa. 1994); Shalimar 
Contractors, Inc. v. American States Ins. Co., 975 F. Supp. 
1450, 1457 (M.D. Ala. 1997); Auto-Owners Ins. Co. v. Hanson, 588 
N.W.2d 777, 779 (Minn. Ct. App. 1999); Oates, 597 N.Y.S.2d at 
554. 
33 Several state supreme courts have held that lead in paint 
does not fit unambiguously within the definition of "pollutant" 
in the pollution exclusion clause.  See, e.g., Atlantic Mutual 
Ins. Co. v. McFadden, 595 N.E.2d 762, 764 (Mass. 1992); Sullins 
v. Allstate Ins. Co., 667 A.2d 617, 620 (Md. 1995); Weaver v. 
Royal Ins. Co. of Am., 674 A.2d 975, 977-78 (N.H. 1996). 
Other courts agree.  See, e.g., Sphere Drake Ins. Co. v. 
Y.L. Realty Co., 990 F.Supp. 240, 244-45 (S.D.N.Y. 1997); 
Danbury Ins. Co., 727 A.2d at 283; Insurance Co. of Ill. v. 
Stringfield, 685 N.E.2d 980, 984 (Ill. App. Ct. 1997); Generali-
U.S. Branch v. Caribe Realty Corp., 612 N.Y.S.2d 296, 299 (N.Y. 
Sup. Ct. 1994). 
No. 96-0328.npc 
 
12
Lefrak Org., Inc. v. Chubb Custom Ins. Co., 942 F. Supp. 949, 
957 (S.D.N.Y. 1996).  See also Sullins v. Allstate Ins. Co., 667 
A.2d 617, 624 (Md. 1995). 
¶114 It must also be kept in mind that a reasonable insured 
would expect coverage that is consistent with the purpose of the 
insurance policy provided.  See General Cas., 209 Wis. 2d at 
183.  This case involves a comprehensive general liability (CGL) 
policy.  "The CGL policy was designed to protect an insured 
against liability for negligent acts resulting in damage to 
third parties."  Id. at 183-84 (quoting Arnold P. Anderson, 
Wisconsin Insurance Law § 5.14, at 136 (3d ed. 1990 & Supp. 
1997)).  In accordance with this purpose, a reasonable landlord 
would expect coverage for his or her negligent failure to remove 
lead paint if the lead later resulted in injury to other 
persons, such as Kevin Peace.    
¶115 The majority also provides a lengthy recitation of the 
history of the pollution exclusion clause, concluding that it 
does not support the conclusion that the terms "discharge," 
"dispersal," "release," and "escape" in the clause are terms of 
art in environmental law.  See majority op. at 33-38.  Because I 
find that the first condition required for the pollution 
exclusion clause to apply is not met in this case, I need not 
discuss the second condition (whether there was a "discharge, 
dispersal, etc." under the terms of the policy).  See Donaldson, 
211 Wis. 2d at 233 n.6.  It is significant, however, that 
several courts have concluded that the pollution exclusion 
clause is aimed at dealing with industrial and environmental 
No. 96-0328.npc 
 
13
pollution.34  See, e.g., Sphere Drake Ins. Co. v. Y.L. Realty 
Co., 990 F. Supp. 240, 244 (S.D.N.Y. 1997); Sullins, 667 A.2d at 
622-23; Generali-U.S. Branch v. Caribe Realty Corp., 612 
N.Y.S.2d 296, 298-99 (N.Y. Sup. Ct. 1994); West Am. Ins. Co., 
409 S.E.2d at 699.  Pointing out that no language has ever been 
added to the clause to specifically address lead or lead-based 
paint, these courts have concluded that amendments to the clause 
have failed to include lead or lead-based paint unambiguously in 
the definition of "pollutant," and thus, have not altered the 
historical purpose of the clause to exclude environmental and 
industrial pollution. See Sphere Drake, 990 F.2d at 243-44; 
Generali, 612 N.Y.S.2d at 299; West Am. Ins. Co., 409 S.E.2d at 
699.  
¶116 For these reasons, and consistent with Donaldson, I 
agree with the many courts which hold that while the broad 
language of the policy might suggest that lead in paint is a 
"pollutant," a reasonable insured could understand "pollutant" 
as not including lead in paint.  Consequently, I agree with the 
                     
34 Significantly, our court of appeals is among these 
courts: 
The history of the CGL pollution exclusion clause 
shows that the insurance industry was concerned about 
liability if faced from environmental accidents such 
as 
oil 
spills 
and 
under 
federal 
environmental 
legislation.  Nowhere in his history is there any 
suggestion that the pollution exclusion clause was 
intended to exclude more than coverage for liability 
for environmental damage. 
 
Beahm v. Pautsch, 180 Wis. 2d 574, 584, 510 N.W.2d 702 (Ct. App. 
1993).   
No. 96-0328.npc 
 
14
many courts which hold that lead in paint is not unambiguously 
included within the definition of "pollutant" in the pollution 
exclusion clause.  
¶117 A cardinal rule of insurance policy interpretation is 
that "ambiguities in a policy's terms are to be resolved in 
favor of coverage, while coverage exclusion clauses are narrowly 
construed against the insurer."  See Donaldson, 211 Wis. 2d at 
230 (citing Smith v. Atlantic Mut. Ins. Co., 155 Wis. 2d 808, 
811, 456 N.W.2d 597 (1990)).  Because I conclude that the 
pollution exclusion clause is ambiguous as to whether lead in 
paint is a "pollutant," these principles require that I construe 
the clause in this case against Northwestern.35   Consequently, I 
must conclude that lead in paint is not a "pollutant" under the 
policy, such that the pollution exclusion clause does not 
preclude coverage for Peace's injuries.  
¶118 As I have already explained, this case arises in the 
context of the duty to defend.  Therefore, if there is any 
possibility that Peace's claims would, if proved, result in 
liability under the terms of the policy, this court is required 
                     
35 In Donaldson, we explained the purpose of the rule that 
ambiguous language in insurance policies is construed against 
the 
insurer: 
"The 
principle 
underlying 
the 
doctrine 
is 
straightforward.  As the drafter of the insurance policy, an 
insurer has the opportunity to employ expressive exactitude in 
order to avoid a misunderstanding of the policy's terms."  
Donaldson, 211 Wis. 2d at 230.  The number of cases on the 
subject (see footnotes 7 and 8) provided Northwestern with ample 
notice that lead in paint might not be unambiguously included in 
its pollution exclusion clause.  If Northwestern had wished to 
avoid its duty to defend this case, it could have redrafted the 
clause.  
No. 96-0328.npc 
 
15
to hold that Northwestern has a duty to defend the suit.  Based 
on the ambiguity of the pollution exclusion clause, I conclude 
that 
such 
a 
possibility 
exists. 
 
Summary 
judgment 
to 
Northwestern on the duty to defend issue was improper in this 
case. 
¶119 In conclusion, I point out that the position of the 
majority denies an effective remedy, in many instances, to 
children like Kevin Peace who have suffered injuries as a result 
of lead in paint.  The majority cites numerous articles and 
statistics regarding the vulnerability of children to lead 
poisoning and the tragic consequences which can result.  See 
majority op. at 3 n.2, 17 n.12, 17-18, 19 n.13, 31 nn.18-19, 38-
39.  The majority's parade of horribles underscores the 
importance of the availability of insurance coverage for 
collection of damages by children injured in lead paint-related 
incidents.  The logic inherent in the majority's decision to 
deny insurance coverage to landlords alleged to be negligent in 
such circumstances is difficult to understand in light of the 
majority’s recognition of the seriousness of the problem.       
¶120 I cannot join the majority's apparent assault on child 
victims of lead poisoning.  In short, I find the majority's 
decision to be inconsistent with the rules for analyzing whether 
an insurer has a duty to defend, inconsistent with this court's 
two-year-old decision in Donaldson, and inconsistent with the 
well-settled principle that insurance policies are to be 
interpreted from the perspective of the reasonable insured.  I 
No. 96-0328.npc 
 
16
would affirm the court of appeals' decision, and therefore, I 
respectfully dissent. 
¶121 I am authorized to state that Justice WILLIAM A. 
BABLITCH joins this dissent. 
 
 
No. 96-0328.npc 
 
1