Opinion ID: 887364
Heading Depth: 2
Heading Rank: 1

Heading: Definition of Occurrence

Text: ¶ 18 At the outset we must determine whether the unintentional damage caused by Ribi's intentional disposal constitutes an occurrence as defined in the CGL policy. The CGL policy's intent is to insure the acts or omissions of the insured, including his intentional acts, excluding only those in which the resulting injury is either expected or intended from the insured's standpoint.  Northwestern Nat. Cas. Co. v. Phalen (1979), 182 Mont. 448, 455, 597 P.2d 720, 724 (emphasis added). Whether the resulting injuries were intended or expected must be measured from the insured's standpoint. Phalen, 182 Mont. at 455, 597 P.2d at 724. ¶ 19 As defined in the CGL policy, an occurrence constitutes an accident that results in property damage neither expected nor intended from the standpoint of the insured. Travelers maintains in its cross-appeal that the District Court erred in determining that the neither expected nor intended language in the CGL policy represents an exclusion to coverage. As an exclusion, the District Court found that Travelers bears the burden of proving that it applies. Travelers argues, instead, that the District Court should have concluded that the expected nor intended language provides a grant of coverage and that Ribi, as the insured seeking coverage, must prove that the damages arising from its disposal of hazardous wastes were neither expected nor intended. We agree. ¶ 20 The definition of occurrence clearly constitutes an inseparable element of the CGL policy's insuring agreement, specifying a number of factors that must be present for coverage to exist. Under the CGL policy's definition of occurrence, Ribi could establish coverage only if the property damage arising from its disposal of hazardous wastes had occurred unexpectedly or unintentionally. To interpret the neither expected nor intended language otherwise would force the insurer to provide coverage unconditionally for any claims and under any circumstances until it could discover independently evidence of damages caused by the insured. Fireman's Fund Ins. Co. v. Ex-Cell-O Corp. (E.D. Mich. 1988), 702 F. Supp. 1317, 1328. Thus, on the face of the CGL policy, and under the rule discussed below (¶ 29, infra) that the insured initially must prove a loss stemming from an occurrence of the type included in the general coverage provision, the burden would be upon Ribi to prove that its claim arose from facts that came within the CGL policy's definition of occurrence. We conclude, therefore, that the District Court improperly determined that the neither expected nor intended language in the CGL policy constitutes an exclusion. This conclusion alone, however, does not bar coverage for Ribi; it merely imposes on it the burden of establishing an occurrence. ¶ 21 The CGL policy's core provision defines occurrence by reference to those accidents or conditions that result in damage that was neither expected nor intended. This provision contains no temporal component and focuses instead on the insured's expectations regarding damages. Thus, acts that take place over a significant period of time, but cause unexpected damage fall within the definition of an occurrence and are entitled to coverage. Millers Mut. Ins. Co. v. Strainer (1983), 204 Mont. 162, 663 P.2d 338 overruled on other grounds (holding that intentional acts do not exclude coverage under the occurrence language unless the injury was expected or intended). ¶ 22 Here the District Court found that Ribi clearly intended to dispose hazardous wastes at BVSL for an extended period of time. The court found, however, that the parties disputed whether Ribi intended or expected damage from this intentional discharge. Given this disagreement and the fact that the resulting damages must be viewed from the insured's standpoint, we will assume for our purposes that an occurrence took place and coverage existed. Phalen, 182 Mont. at 455, 597 P.2d at 724. This assumption transforms our inquiry into whether the pollution exclusion clause in the CGL policy eliminates coverage for damages arising out of the intentional disposal of hazardous wastes into or upon the land.