Opinion ID: 1297320
Heading Depth: 1
Heading Rank: 7

Heading: The Qualified Pollution Exclusion

Text: The first of the two pollution exclusions found in the primary policies under Central National's policy is what is commonly known as the qualified pollution exclusion clause found in standard comprehensive general liability (CGL) policies from 1970 to 1986. It provides: This insurance does not apply: .... to bodily injury or property damage arising out of the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any water course or body of water; but this exclusion does not apply if such discharge, dispersal, release or escape is sudden and accidental; Clerk's Papers (Appellant) vol. 2, at 140, 267. The insurers principally argue that as a matter of law the deliberate dumping of waste materials into the pits over many years in the regular course of business is not accidental, and therefore not sudden and accidental. Thus, according to the insurers, the exception found in the exclusionary clause which provides (reinstates) coverage where the discharge, dispersal, release or escape is sudden and accidental is not applicable, and coverage is precluded. The insurers also maintain that disposal of waste materials into the pit was not sudden and therefore the exception does not apply. [10] In addition to the rules of construction set forth above, e.g., construction of policy language is for the court and undefined terms should be given their plain, ordinary, and popular meaning in accord with the understanding of the average purchaser of insurance, an additional rule of construction applies, i.e., exclusions should be construed strictly against the insurer. Phil Schroeder, Inc. v. Royal Globe Ins. Co., 99 Wn.2d 65, 68, 659 P.2d 509 (1983), modified on reconsideration, 101 Wn.2d 830, 683 P.2d 186 (1984). [11] The first step is to examine the language of the policies and construe it as a whole. As noted, coverage for pollution caused damage under the Central National policies is determined by reference to the primary policies under the Central National policies. To decide what is encompassed by the qualified pollution exclusion found in some of the primary policies, we examine the exclusion in context, that is, in light of those primary policies' language as a whole. Coverage is provided in those policies as follows: 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] to which this insurance applies, caused by an occurrence.... Clerk's Papers (Appellant) vol. 2, at 140, 267. [O]ccurrence means an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured.... Clerk's Papers (Appellant) vol. 2, at 137, 299. Note that this definition is not exactly the same as that contained in the Central National policies themselves. We are not here concerned with what constitutes an occurrence within the meaning of the Central National policies, nor with the objective/subjective standard and burden of proof issues addressed above. We are solely concerned with what the qualified pollution exclusion in certain of the primary policies means, and that question is resolved in part by reference to the rest of the language of the primary policies, including the occurrence definition which they contain. Before the occurrence-based policies were written, comprehensive (now commercial) general liability policies were accident-based. The standard form accident policy did not define the term accident, and the term became the subject of dispute. Sharon M. Murphy, Note, The Sudden and Accidental Exception to the Pollution Exclusion Clause in Comprehensive General Liability Insurance Policies: The Gordian Knot of Environmental Liability, 45 Vand. L. Rev. 161, 165 (1992). A number of courts, however, defined the term as an unintended, sudden, unexpected event, including ongoing events. Nancer Ballard & Peter M. Manus, Clearing Muddy Waters: Anatomy of the Comprehensive General Liability Pollution Exclusion, 75 Cornell L. Rev. 610, 623 (1990) (and cases cited therein); Thomas M. Reiter et al., The Pollution Exclusion Under Ohio Law: Staying the Course, 59 U. Cinn. L. Rev. 1165, 1188 (1991) (and cases cited therein). In 1966, the standard form policy was revised to an occurrence-based policy. Occurrence was defined in part in the standard CGL policy as an accident, including injurious exposure to conditions ... which resulted in a loss. We agree with one commentator, widely cited, who reasons that under this new language the occurrence clause would cover pollution liability that arose from gradual losses provided that the loss was unexpected and unintended. E. Joshua Rosenkranz, Note, The Pollution Exclusion Clause Through the Looking Glass, 74 Geo. L.J. 1237, 1247 (1986) quoted in, e.g., Morton Int'l, Inc. v. General Accident Ins. Co. of Am., 134 N.J. 1, 32, 629 A.2d 831, 849 (1993); New Castle Cy. v. Hartford Accident & Indem. Co., 933 F.2d 1162, 1196-97 (3d Cir.1991). Prior to the addition of the pollution clause, then, the occurrence clause allowed for coverage for losses arising from gradual events, provided that the loss otherwise fell within the occurrence definition, particularly that the loss was unexpected and unintended. The so-called qualified pollution exclusion was added to the standard CGL policy, first as a mandatory endorsement in 1970, and then as part of the policy in 1973. Also in 1973, the occurrence definition was altered to provide that an occurrence is `an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured.' Robert M. Tyler, Jr. & Todd J. Wilcox, Pollution Exclusion Clauses: Problems in Interpretation and Application Under the Comprehensive General Liability Policy, 17 Idaho L. Rev. 497, 499 (1981). This definition is the one found in certain of the primary policies underlying the Central National policies in this case. As can be seen, this definition clearly contemplates gradual events. What did the pollution exclusion do, if anything, to change coverage for damage resulting from gradual pollution where the injury or damage was neither expected nor intended? The qualified pollution exclusion contains both an exclusion and an exception to the exclusion. Coverage is excluded for damage arising out of the discharge, dispersal, release or escape of pollutants or contaminants. The exception is found in the last clause of the exclusion, where coverage is nonetheless provided if such discharge, dispersal, release or escape is sudden and accidental. [12] None of these terms in the qualified pollution exclusion is defined in the policy. Thus, they are to be interpreted in accord with the understanding of the average purchaser of insurance, and the terms are to be given their plain, ordinary and popular meaning. That meaning may be ascertained by reference to standard English dictionaries. Estate of Jordan v. Hartford Accident & Indem. Co., 120 Wn.2d 490, 502, 844 P.2d 403 (1993); Boeing Co. v. Aetna Cas. & Sur. Co., 113 Wn.2d 869, 877, 784 P.2d 507, 87 A.L.R.4th 405 (1990). First looking to the exclusionary language, the damage must arise out of certain listed conditions. Arise out of is commonly understood to mean originating from a specific source, Webster's Third New International Dictionary 117 (1986), and we conclude that is what the average purchaser of insurance would understand it to mean. The originating source of the damage must be the discharge, dispersal, release or escape of pollutants or contaminants. Thus, the exclusion focuses on certain damage-causing events. QCF urges the court to focus on the leakage from the pits, and not the initial disposal into the pits. The insurers urge the court to focus on the initial disposal into the pits. The terms discharge, dispersal, release or escape are not defined. Discharge appears to encompass acts of disposing of wastes into waste pits. The exclusion refers to the discharge, dispersal, release or escape into or upon land .... One construction of the language is that it includes the dumping of the wastes upon the land, i.e., in this case upon the ground of the natural depression and later, the constructed pits separated by berms. However, the terms discharge, dispersal, release, and escape, have plain, ordinary, popular meanings which indicate that the initial disposal into the pits is not the relevant event. Discharge has as one meaning to give outlet to: pour forth, and a flowing or issuing out .... Webster's, at 644. This definition may apply to mean the release from the pits. Dispersal is the act or result of dispersing. Webster's, at 653. Disperse includes the meaning to spread or distribute from a fixed or constant source .... Webster's, at 653. Escape is the act of escaping or the fact of having escaped: as ... leakage or outflow esp. of steam or a liquid .... Webster's, at 774. Release includes to set free from restraint, confinement, or servitude ... and a discharge from restraint .... Webster's, at 1917. These are not the only dictionary definitions, but they are popular meanings which have in common the notion of an escape or release from confinement, or the dispersal from a fixed place. They apply well to the migration of the wastes from the pits into the groundwater. They do not apply well to disposal into the pits. In construing the policies, we are concerned with what the average purchaser would understand the terms to mean. In this regard, it is important that these policies are comprehensive general liability policies, and the average purchaser would expect broad coverage for liability arising from business operations. It is easy, from the vantage point of time passed, to recognize the environmental dangers and costs of disposing of hazardous wastes into landfills and the like. However, as one court has aptly explained: When landfills began to be licensed in the late 1960s and early 1970s, landfill operators and even many environmental officials expected the design of a landfill would function to contain pollutants. In particular, the soil beneath landfills was expected to act as a filter to prevent pollutants from migrating into the underlying and surrounding ground and surface waters. Since landfills were expected and intended to contain any wastes placed in them, pollutants deposited in a landfill could only cause property damage if there was a discharge, dispersal, release or escape of those pollutants from the landfill into the surrounding environment. Thus, the deposit of pollutants into a landfill cannot be the triggering event; rather, the escape is the critical inquiry for purposes of determining the applicability of the pollution exclusion. The language of the pollution exclusion itself supports our interpretation. Both the exclusion and its exception apply to a discharge, dispersal, release or escape of pollutants. All of these terms carry the connotation of the issuance of a substance from a state of containment; none of the terms is normally used to describe the placement of a substance into an area of confinement. (Footnote and citations omitted.) Sylvester Bros. Dev. Co. v. Great Cent. Ins. Co., 480 N.W.2d 368, 373-74 (Minn. Ct. App.), review denied (Mar. 26, 1992); see also New Castle Cy. v. Hartford Accident & Indem. Co., 933 F.2d 1162, 1167 (3d Cir.1991) (noting that in the late 1960's little was known about environmental danger posed by sanitary landfills; few recognized the extent to which landfills threatened pollution of groundwater). [13] The technology and understanding of the safety and containment characteristics of waste disposal sites then and now are far different. It seems to us that an average purchaser of insurance in earlier years would have been justified in thinking that there was coverage for the placement of wastes into a waste pit, or a landfill, which was expected to contain the wastes and from which it was not expected that they would discharge, disperse, release, or escape into the groundwater, or from which it was believed that the waste materials would be safely filtered. That is, the average purchaser of insurance would have understood that mere placement of wastes into a place which was thought would contain or filter the wastes would not have been an event which would fall within the exclusion. We therefore hold that the relevant polluting event is the discharge, dispersal, release, or escape of toxic material into the environment, and where material has been deposited in a place which was believed would contain or safely filter the material, such as a waste disposal pit or sanitary landfill, the polluting event is the discharge, dispersal, release, or escape from that place of containment into or upon the land, the air or water, including groundwater. A determination that a polluting event has occurred does not end the inquiry. The exception to the exclusion, found in the last clause of the exclusion, retriggers coverage if the polluting event is sudden and accidental. The first point about this language is that it is the same discharge, dispersal, release, or escape ( such discharge, dispersal, release or escape) as that out of which the damage arises. The second point is that the discharge, dispersal, release, or escape must be sudden and accidental. Thus, reading the exclusion and the exception together, only damage causing discharges, dispersals, releases, or escapes which are nonsudden and nonaccidental are excluded from coverage. The terms sudden and accidental have been the subject of enormous debate, which primarily centers on the word sudden. There is, however, wide recognition that various dictionaries define the word sudden both as unexpected, and in terms connoting a temporal idea of abrupt, instantaneous, short in duration, or the like. See generally, Nancer Ballard & Peter M. Manus, Clearing Muddy Waters: Anatomy of the Comprehensive General Liability Pollution Exclusion, 75 Cornell L. Rev. 610, 614 n. 9 (1990) (summarizing numerous dictionary definitions). A number of courts have noted the two common, reasonable meanings of sudden, as unexpected and as meaning abrupt, quick, or of short duration, instantaneous or the like, and have concluded the term is ambiguous in the context of the qualified pollution exclusion. E.g., New Castle Cy., at 1193-95; Claussen v. Aetna Cas. & Sur. Co., 259 Ga. 333, 335, 380 S.E.2d 686, 688 (1989); Just v. Land Reclamation, Ltd., 155 Wis.2d 737, 746, 157 Wis.2d 507, 456 N.W.2d 570, 573 (1990). This court, too, has noted the two reasonable meanings of the word sudden, albeit in the context of a boiler and machinery insurance policy. In Anderson & Middleton Lumber Co. v. Lumbermen's Mut. Cas. Co., 53 Wn.2d 404, 333 P.2d 938, 34 A.L.R. 731 (1959), the issue was whether there was coverage under a policy which provided coverage if a loss was caused by an accident, which was defined as the sudden and accidental breaking of the bandsaw wheel, or any part thereof, into two or more separate parts while it was in use or connected for use. Anderson, at 405. The court began with the general rules that insurance policy language generally must be construed according to its ordinary meaning, and where ambiguity exists, it should be construed in favor of the insured and against the insurer/drafter. Anderson, at 405-06. The court then reasoned that [t]he word sudden is defined in Funk & Wagnalls Standard Dictionary of the English Language as, happening quickly and without warning; coming unexpectedly or in an instant; as sudden death; sudden dismissal. In Webster's New International Dictionary (2d ed.), it is defined: Happening without previous notice or with very brief notice; coming or occurring unexpectedly; unforeseen; unprepared for; as, a sudden shower, death, emergency, turn for the better, or attack of the enemy. The purpose of the contract was to insure the respondent against an accidental breakdown of the equipment covered by the policy. The word sudden was, of course, placed in the contract for a purpose. Is it more reasonable to assume that it was placed there to show an intent to exclude coverage of a break which did not happen instantaneously, or to exclude coverage of a break which was unforeseen and therefore unavoidable? It seems to us that the risk to the insurer would be the same, whether a break was instantaneous or began with a crack which developed over a period of time until the final cleavage occurred, as long as its progress was undetectible. On the other hand, the insured should not be permitted to proceed recklessly and hold the insurer liable for damage if it had been forewarned of a possible break and could have taken steps to forestall it or avoid an interruption of business resulting therefrom. ... [The court does not construe the word as instantaneous] when its primary meaning, in common usage, is not instantaneous but rather unforeseen and unexpected. Anderson, at 408-09. While the insurers here argue that in other contexts the term sudden, has been given a temporal meaning, we conclude that the reasoning in Anderson is as sound in the context of these policies as it was in the policy at issue in that case. That the term sudden may sometimes be unambiguous depending upon context does not mean it always must be given one, and only one, meaning. The insurers maintain, however, that in context the term here is unambiguous because for the word accidental to have independent effect, sudden must mean something other than unexpected because accidental has at least that quality. A number of courts have followed this reasoning. E.g., Aetna Cas. & Sur. Co. v. General Dynamics Corp., 968 F.2d 707 (8th Cir.1992); Sylvester Bros. Dev. Co. v. Great Cent. Ins. Co., 480 N.W.2d 368, 376 (Minn. Ct. App.), review denied (Mar. 26, 1992); Lumbermens Mut. Cas. Co. v. Belleville Indus., Inc., 407 Mass. 675, 680, 555 N.E.2d 568, 572 (1990). We do not agree that the term is unambiguous in the context of these policies. First, the same language, sudden and accidental, was involved in Anderson. Second, accidental has independent effect as unintended. See New Castle Cy., at 1194. Moreover, as the court in New Castle Cy. appropriately observed, insurance policies often use words which have similar meanings, such as in the qualified pollution exclusion where the words discharge, dispersal, release or escape are all used to describe possible polluting events. New Castle Cy., at 1194. [14] Thus, we hold the term sudden is ambiguous. Under our general rules for construing insurance policies, ambiguity in a policy may be resolved through extrinsic evidence as to the parties' intent. American Star Ins. Co. v. Grice, 121 Wn.2d 869, 874, 854 P.2d 622 (1993), opinion supplemented, 123 Wn.2d 131, 865 P.2d 507 (1994). However, no extrinsic evidence as to the parties' intent is in this record. Moreover, while evidence of the parties' mutual intent may be helpful in some contexts, we have recognized that sometimes language in standard policies does not involve mutual negotiations between the insurers and the insureds. In Boeing Co. v. Aetna Cas. & Sur. Co., 113 Wn.2d 869, 883, 784 P.2d 507, 87 A.L.R.4th 405 (1990), we observed the term as damages found in standard CGL policies was selected by the insurer and was not negotiated. Similarly, as the New Jersey Supreme Court noted, the qualified pollution exclusion was drafted by the insurance industry; there was no participation by insureds in the drafting of the clause. Morton Int'l, Inc. v. General Accident Ins. Co. of Am., 134 N.J. 1, 37, 629 A.2d 831, 851-52 (1993), cert. denied, 114 S.Ct. 2764 (1994). [15] Thus, we are left with ambiguity in a nonnegotiated standard form insurance provision. Unresolved ambiguity in insurance contract language is resolved against the insurer. Greer v. Northwestern Nat'l Ins. Co., 109 Wn.2d 191, 201, 743 P.2d 1244 (1987). Where exceptions to or limitations upon coverage are concerned, this principle applies with added force. Greer, at 201. We thus construe the ambiguity in the pollution exclusion against the drafter-insurer, and in accord with a reasonable interpretation of the policy language. QCF argues that a reasonable interpretation of the ambiguous pollution exclusion is that sudden and accidental means unexpected and unintended, and that the focus of the exclusion is on the resulting damage. For this interpretation, QCF relies in part upon certain history of the clause. A number of courts have examined the drafting and marketing history of the qualified pollution exclusion in interpreting the clause. The Court of Appeals in this case relied in part upon an article chronicling certain of the drafting and marketing history of the pollution exclusion clause. Queen City Farms, Inc. v. Central Nat'l Ins. Co., 64 Wn. App. 838, 879-80, 827 P.2d 1024 (1992) (quoting S. Bradbury, Original Intent, Revisionism, and the Meaning of the CGL Policies, 1 Envt'l Claims J. 279, 282-83, 285 (1989)). The insurers maintain the court did so improperly, as no evidence of the history is found in the record, and in any event it is, the insurers argue, irrelevant to the parties' mutual intent about the meaning of the clause, as there is no evidence about what QCF intended the exclusion to mean. QCF counters by arguing that the history should not be considered as evidence of the parties' intent, but instead should be considered as one reasonable interpretation of the ambiguous exclusionary language. As reported in published decisions, representations were made to state insurance regulators that the pollution exclusion was intended to exclude coverage for intentional polluters and clarify the occurrence clause. For example, in Claussen v. Aetna Cas. & Sur. Co., 259 Ga. 333, 337, 380 S.E.2d 686 (1989), the court noted that [d]ocuments presented by the Insurance Rating Board (which represents the industry and on which Aetna participated) to the [Georgia] Insurance Commissioner when the pollution exclusion was first adopted suggest that the clause was intended to exclude only intentional polluters. The Insurance Rating Board represented the impact of the [pollution exclusion clause] on the vast majority of risks would be not changed. (Citation omitted.) Claussen, at 337. In West Virginia, the insurance commissioner held hearings to consider whether to approve inclusion of the proposed exclusionary language in policies in that state. As the Supreme Court of Appeals in West Virginia explained, in conjunction with the submissions [of the exclusion language], the Insurance Rating Board and apparently also the Mutual Insurance Rating Board, acting on behalf of their members and subscribers ... included with their submission of the proposed exclusion language an explanation which stated: Coverage for pollution or contamination is not provided in most cases under present policies because the damages can be said to be expected or intended and thus are excluded by the definition of occurrence. The above exclusion [the exclusion which is in issue in the present case] clarifies this situation so as to avoid any question of intent. Coverage is continued for pollution or contamination caused injuries when the pollution or contamination results from an accident... In this Court's view, the insurance industry thus represented to the State of West Virginia, acting through the West Virginia Commissioner of Insurance, that the exclusion which is in issue in the present case merely clarified the pre-existing occurrence clause. Joy Technologies, Inc. v. Liberty Mut. Ins. Co., 187 W. Va. 742, 747-48, 421 S.E.2d 493 (1992). In New Jersey, the court also noted similar representations made to state regulators, and refused to give effect to the literal language of the exclusion, which the court construed as a restriction of coverage. Because, the court reasoned, the insurers misrepresented the clause as merely clarifying the occurrence clause, the court applied an estoppel theory, saying, [a]s a matter of equity and fairness, the insurance industry should be bound by the representations of the IRB, its designated agent, in presenting the pollution-exclusion clause to state regulators. Morton Int'l, Inc. v. General Accident Ins. Co. of Am., 134 N.J. 1, 75-76, 629 A.2d 831, 874 (1993), cert. denied, 114 S.Ct. 2764 (1994). The court concluded: [W]e hold that, notwithstanding the literal terms of the standard pollution-exclusion clause, that clause will be construed to provide coverage identical with that provided under the prior occurrence-based policy, except that the clause will be interpreted to preclude coverage in cases in which the insured intentionally discharges a known pollutant, irrespective of whether the resulting property damage was intended or expected. Morton Int'l, Inc., at 78. Other courts have also examined the history of the clause in interpreting the qualified pollution exclusion. E.g., New Castle Cy. v. Hartford Accident & Indem. Co., 933 F.2d 1162, 1196-98 (3d Cir.1991); Just v. Land Reclamation, Ltd., 155 Wis.2d 737, 157 Wis.2d 507, 456 N.W.2d 570 (1990). [16] We agree with QCF that the insurance industry statements examined by these courts may be considered insofar as they represent a reasonable construction of the ambiguous policy language. [W]hen the issue is how to interpret an ambiguous policy provision, if the interpretation proposed by the insured came from the mouth of the drafter of the provision, ordinarily this would be some evidence that the proposed interpretation is reasonable. The argument for admitting at least certain forms of post-promulgation evidence is stronger. Typically the organization that has promulgated a standard-form policy (usually ISO) then files the policy for approval by the Insurance Commissioners in the states where the policy is to be marketed. Explanatory statements made in support of the application for approval are not those of an individual in the course of a deliberative drafting process, but of an agent of all the insurance companies who subsequently issue the policy or endorsement in question. The most celebrated example of such a statement involves the filing of the pollution exclusion with various state Insurance Commissioners in 1970. In such a setting statements by an insurance industry agent interpreting or clarifying the meaning of particular insurance policy provisions might resemble Committee Reports in the legislative setting. That is, such stat[e]ments might be taken to state a collective judgment by the drafters that is not binding but is highly indicative of the intentions of many of those who vote in favor of the legislation, although the precise setting in which the statements were made and the scope of authority of their maker would also seem relevant. In any event, where the policyholder's burden is merely to show that its interpretation of an ambiguous provision is but one reasonable interpretation, evidence that the interpretation subscribed to by at least some of the drafters was the same as or similar to the policyholder's proposed interpretation would seem relevant. (Footnote omitted. Italics ours.) Kenneth S. Abraham, Environmental Liability Insurance Law 38-39 (1991). In reaching our conclusion that the reported representations of the insurance industry to state regulators may be considered insofar as they present a reasonable interpretation of the policy language, we do not treat the statements as extrinsic evidence of the parties' intent. As explained above, there is no evidence of the parties' mutual intent in this record. However, where unresolved ambiguity exists in an insurance provision, the insured is entitled to bring before the court any reasonable construction of the policy language favorable to the insured. That the particular construction happens to be one which courts have identified in published decisions as representations from the insurance industry advanced when approval of the exclusionary language was sought does not preclude our consideration of the particular construction. Nor is there any impropriety in considering a construction based upon representations which the insurers do not dispute was in fact made in some states. [17, 18] In accordance with the historical explanation recited in the cases, that the clause clarified coverage, sudden and accidental means unexpected and unintended. That is, for injury or damage to be covered under the occurrence clause, it must be neither expected nor intended. Gradual polluting events may fall within the occurrence clause provided they result in unexpected and unintended damage. Like the inquiry as to whether there was a covered event under the occurrence clause, the inquiry under the qualified pollution exclusion is whether there was a discharge, dispersal, release, or escape of pollutants or contaminants upon the land or into the air or water which resulted in damage (the exclusionary portion of the clause), and, if so, was that discharge, dispersal, release, or escape unexpected, unforeseen, and unintended (the exception)? Expected or intended damage (under the occurrence clause) or expected or intended polluting events (under the pollution exclusion) resulting in damage are not covered. Coverage is otherwise provided. Thus, similar to the occurrence clause, the pollution exclusion is aimed at precluding coverage for damage resulting from intentional pollution or pollution which is expected. This coordination of the meaning of the occurrence clause and the exclusion was recognized by the Court of Appeals in United Pac. Ins. Co. v. Van's Westlake Union, Inc., 34 Wn. App. 708, 664 P.2d 1262, 39 A.L.R.4th 1040, review denied, 100 Wn.2d 1018 (1983), though we acknowledge that some of the reasoning there differs from ours. In Van's Westlake Union, large quantities of gasoline leaked for several months from a small hole in an underground gasoline pipe at a service station. When the leak was discovered, the station was closed and, along with several surrounding blocks, it was cordoned off for several weeks while gasoline was pumped out of the ground. A number of surrounding businesses made claims for loss of profits and similar damage resulting from closure of the area. The claims were tendered to the insurer of the station, which declined to defend or pay. The insurer brought a declaratory judgment action to determine what, if any, its obligations were. The insurer relied upon the qualified pollution exclusion as precluding coverage. The court in Van's Westlake Union reasoned that because neither the escape of the gasoline nor the resulting damage was expected or intended, the qualified pollution exclusion did not apply to preclude coverage. That conclusion is sound under our reasoning here. However, in one respect we find that the explanation of the insurance industry relied upon by QCF would lead to an unreasonable construction of the exclusion. That is, QCF argues that the focus of the exclusion is on the damage and not the polluting event. As we have discussed at some length above, the language of the exclusion involves the polluting event, and not the resultant damages. The vast majority of courts agree, including those which otherwise find the exclusion ambiguous, as we have. E.g., New Castle Cy. v. Hartford Accident & Indem. Co., 933 F.2d 1162, 1199 (3d Cir.1991) (while finding pollution exclusion ambiguous, nevertheless reasons clear that focus is on discharge and not damages); Claussen v. Aetna Cas. & Sur. Co., 259 Ga. 333, 336, 380 S.E.2d 686, 688-89 (1989) (same); Outboard Marine Corp. v. Liberty Mut. Ins. Co., 154 Ill.2d 90, 607 N.E.2d 1204 (1992) (same); United States Fid. & Guar. Co. v. Star Fire Coals, Inc., 856 F.2d 31, 34 (6th Cir.1988); Borden, Inc. v. Affiliated FM Ins. Co., 682 F. Supp. 927, 930 (S.D. Ohio 1987), aff d, 865 F.2d 1267 (6th Cir.), cert. denied, 493 U.S. 817 (1989); Hartford Accident & Indem. Co. v. U.S. Fid. & Guar. Co., 962 F.2d 1484, 1490 (10th Cir.) (under Utah law), cert. denied, 121 L.Ed.2d 335 (1992); Technicon Elecs. Corp. v. American Home Assur. Co., 74 N.Y.2d 66, 542 N.E.2d 1048 (1989); Lumbermens Mut. Cas. Co. v. Belleville Indus., Inc., 407 Mass. 675, 679, 555 N.E.2d 568, 571 (1990); Mays v. Transamerica Ins. Co., 103 Or. App. 578, 799 P.2d 653 (1990), review denied, 311 Or. 150 (1991); Oklahoma Pub'g Co. v. Kansas City Fire & Marine Ins. Co., 805 F. Supp. 905, 910 (W.D. Okla. 1992); but see, e.g., Just v. Land Reclamation, Ltd., 155 Wis.2d 737, 157 Wis.2d 507, 456 N.W.2d 570 (1990). The court in Van's Westlake Union also appears to have focused on damages; however, it also discussed the question whether the escape of the gasoline was expected or intended. Because the focus of the exclusion is on the polluting event, and not the damages, we conclude the construction offered by QCF as advanced by the insurance industry and described in published appellate court decisions is not reasonable insofar as it focuses only on damage resulting from the polluting event. See Nancer Ballard & Peter M. Manus, Clearing Muddy Waters: Anatomy of the Comprehensive General Liability Pollution Exclusion, 75 Cornell L. Rev. 610, 626 (1990) (observing that the standard explanatory memorandum of the insurance industry ignores the fact that the exclusion refers to the release of pollutants and not the damage caused by such releases). Moreover, if all the exclusion did was restate the occurrence clause, that is, if it were wholly coextensive, it would be ineffective as an exclusion. In contrast, giving effect to the language of the pollution exclusion which focuses on the polluting event also results in giving some independent effect to the exclusion. See McDonald v. State Farm Fire & Cas. Co., 119 Wn.2d 724, 734, 837 P.2d 1000 (1992) (an insurance policy should be interpreted so as to give effect to each provision). We note that because we conclude that the relevant polluting event may be the discharge, dispersal, release, or escape of material from a landfill or similar place of containment, the damage/discharge distinction may be insignificant in many cases as a practical matter. The distinction nonetheless serves a valid purpose, however, as explained by the Third Circuit: Our first hypothetical city is insured for all unexpected pollution damage. Although it expects its landfill to discharge leachate into the environment, it does not expect the leachate to cause any appreciable property damage. Because this city is insured if any unexpected damage results, it has no incentive to improve the design or operation of its landfill. The second city, on the other hand, is insured only for pollution damage that arises from an unexpected discharge of pollutants. Therefore, if this city knows that its landfill is discharging leachates, it is not insured for any ensuing property damage, regardless of whether the damage is expected or not. Given that it would not be covered for any consequential damage, the second city, once it realizes that its landfill is discharging pollutants, has a strong incentive to take precautions designed to minimize the risk of environmental damage. New Castle Cy. v. Hartford Accident & Indem. Co., 933 F.2d 1162, 1202 (3d Cir.1991). Finally, QCF urges that only active polluters fall within the exclusionary language. We reject the active polluter terminology urged by QCF, which argues that coverage is excluded only for active polluters. Such language is not found in the policy, and adds nothing to the analysis. See Federal Ins. Co. v. Susquehanna Broadcasting Co., 727 F. Supp. 169, 177 (M.D. Pa. 1989) (quoting Fireman's Fund Ins. Cos. v. Ex-Cell-O Corp., 702 F. Supp. 1317, 1325 (E.D. Mich. 1988), modified in part, 738 F. Supp. 896 (1990), aff d, 928 F.2d 1131 (3d Cir.), cert. denied, 116 L.Ed.2d 58 (1991). While the Court of Appeals used this term in Van's Westlake Union, it did so in light of then sound case law. In any case, while the term itself adds nothing to the analysis, the underlying premise has merit. That is, the court in Van's Westlake Union reasoned that an active polluter is not found where the polluting event and the resulting damage were neither expected nor intended  and thus coverage would be found. This result accords with our analysis here. If the damage is expected or intended, there is no coverage under the occurrence clause. If the polluting event is expected or intended, then coverage is excluded under the qualified pollution exclusion. We hold that sudden means unexpected in the context of CGL policies containing the qualified pollution exclusion. Thus sudden and accidental means unexpected and unintended. Both terms are given meaningful effect. Reading the occurrence clause and the exclusion together, pollution damage resulting from an accident, including continuous or repeated exposure to conditions, which is neither intended nor expected is covered under the occurrence clause. The exclusionary language of the qualified pollution exclusion precludes coverage for damage resulting from the listed polluting events. The polluting event may be the discharge, dispersal, release, or escape of materials from a place of containment into the environment where they cause damage. Coverage is retriggered, however, under the exception to the exclusion, where the discharge, dispersal, release, or escape is sudden and accidental, i.e., unexpected and unintended. Therefore, if the damage results from the dispersal of materials into the groundwater from a place of containment where the insured believed they would remain or from which they would be safely filtered, and that dispersal was unexpected and unintended, then coverage is provided under the policies. [19] Our conclusion, drawn primarily from the language of the policies, is reinforced by the proposition that when a judicial construction is placed upon words or phrases prior to the issuance of a policy which uses those words and phrases, it is presumed that construction is intended by the parties. 2 George J. Couch, Insurance § 15:20, at 195-96 (2d ed. rev. vol. 1984). The term sudden and accidental was construed in Anderson & Middleton Lumber Co. v. Lumbermen's Mut. Cas. Co., 53 Wn.2d 404, 333 P.2d 938, 34 A.L.R. 731 (1959), before these policies were issued, and sudden was construed to mean unexpected. See Time Oil Co. v. Cigna Property & Cas. Ins. Co., 743 F. Supp. 1400, 1408 (W.D. Wash. 1990) (Washington law is settled that sudden in the context of an insurance exclusion does not have a temporal meaning). It is thus presumed that the parties intended the term to mean unexpected. See also Carl A. Salisbury, Pollution Liability Insurance Coverage, the Standard-Form Pollution Exclusion, and the Insurance Industry: A Case Study in Collective Amnesia, 21 Envt'l L. 357, 381 (1991) ([p]rior to the ... drafting of the standard pollution exclusion, the phrase `sudden and accidental' had been used in insurance policies and repeatedly interpreted by various courts to mean `unexpected'). In summary, we conclude the qualified pollution exclusion is ambiguous. Resolving the ambiguity favorably to the insured and coverage, and against the insurer, we agree that a reasonable construction of the policy language is that damage resulting from one of the named polluting events is not covered, unless that polluting event was unexpected and unintended. Where the facts establish that materials were placed into a waste disposal site which was believed would contain or safely filter them, but, in fact, the materials unexpectedly and unintentionally are discharged or released into the environment, or disperse or escape into the environment, there is coverage for the resulting damage. Under such a scenario, the exception to the exclusion would apply: The discharge, dispersal, release or escape would be sudden and accidental and therefore coverage would be afforded. Here, the answers to special jury verdict questions resolve this factual question for part of the relevant period. Question 2 on the special verdict form asked: Did there come a time ... that Queen City Farms expected or intended, or should reasonably have expected, that materials would leak from its disposal ponds into groundwater? Clerk's Papers (Appellant) vol. 4, at 1132. As we have held above, this question is improper insofar as it contains an objective standard for QCF's expectation of damage. It nevertheless answers the coverage question for the period up to December 31, 1968, because the jury said that QCF neither subjectively nor objectively expected or intended the leakage from the pits (the polluting event) until that time. As noted, it necessarily follows from this finding that QCF expected and intended that the waste pits would contain or safely filter the material. On and after that date, however, factual questions remain. Our reasoning above that whether damage was expected or intended is a subjective determination applies equally to the determination whether the escape of material from pits was expected or intended. As with the occurrence clauses discussed in connection with the subjective/objective issue, nothing in the qualified pollution exclusion indicates which standard applies. We construe the resulting ambiguity favorably to the insured, and apply a subjective standard. The trier of fact must determine whether QCF subjectively expected the materials to be contained by the pits, or, conversely, whether QCF subjectively expected or intended that the materials would leak from the pits into the groundwater. As noted, we agree with the Court of Appeals that the record contains a great deal of evidence which would tend to show that objectively leakage was to be expected. Whether the jury would have reached the same conclusion, that leakage was expected or intended as of December 31, 1968, under a subjective standard, is simply not clear from this record. Remand for resolution of this factual question is necessary. Finally, we point out that the intentional polluter, or the polluter that dumps materials into landfills or waste disposal sites while knowing or expecting that materials will migrate or disperse into the environment, will not find coverage under the standard CGL policies containing the qualified pollution exclusion. The pollution exclusion with its exception thus serves the obvious policy purpose of precluding coverage for damage resulting from expected and intended pollution. As one commentator has explained: The public and regulatory objective of general liability insurance is to transfer the risk of certain types of business-related losses that could threaten insureds' viability. In other words, from a public and regulatory point of view, CGL insurance is designed to promote business stability. At the same time, the types of losses that insurance covers must be limited so that insurance companies survive and can continue to serve their function of providing economic stability to their insureds. Generally, the limitations on insurance coverage fall into two categories: expected losses and intentional losses. Expected losses frequently are not covered by insurance because they are more like business expenses than true risks; these losses can be predicted and calculated in the course of responsible business planning efforts. Intentional losses also are not true risks because the insured has the ability to avoid them. Furthermore, public policy forbids the transfer of liability for certain intentional losses. An interpretation of [the qualified pollution exclusion] which provides coverage for unanticipated and unintended releases of pollutants is consistent with well-settled insurance risk transfer principles and the twin goals of encouraging responsible business practices and providing business stability. Thus, it is not surprising that the adoption of [the exclusion] was promoted by the insurance industry, the regulatory community, [and] the public.... (Footnotes omitted.) Nancer Ballard & Peter M. Manus, Clearing Muddy Waters: Anatomy of the Comprehensive General Liability Pollution Exclusion, 75 Cornell L. Rev. 610, 628 (1990).