Opinion ID: 2516955
Heading Depth: 4
Heading Rank: 2

Heading: Whittier's interpretation is unreasonable.

Text: Alaska has adopted the doctrine of reasonable expectations. [30] We can construe an insurance policy under the reasonable expectations doctrine without finding ambiguity in the policy; therefore, even though we have determined that the exclusion is not ambiguous, Whittier may still prevail under the reasonable expectations doctrine. [31] Because an insurance policy is an adhesion contract, we construe any policy restrictions in liability policies to give effect to the insured's objectively reasonable expectations. [32] Thus, with regards to liability policies, the objectively reasonable expectations of applicants and intended beneficiaries regarding the terms of insurance contracts will be honored even though painstaking study of the policy provisions would have negated those expectations. [33] Under this doctrine, we examine the language of the disputed provisions, other provisions, and relevant extrinsic evidence. [34] Whittier's claim is not supported by any of these sources. As to the language of the disputed policy provision, Whittier argues that the absence of the term gasoline from the definition of pollutants in the ANIC policies demonstrates that ANIC did not intend gasoline to be considered a pollutant. But because public policy disfavors requiring an exhaustive list of pollutants in insurance policies [35] and the majority of courts deciding the issue have rejected similar arguments, [36] we are unpersuaded by Whittier's argument. As to other provisions, Whittier argues that gasoline was its [u]seful [p]roduct within coverage of the ANIC policies. But, again, we distinguish between gasoline that is contained in a UST and available for sale as a gas station's product, and leaked gasoline that contaminates soil and water as a pollutant. [37] Finally, as to extrinsic evidence, Whittier argues that ANIC's underwriting files demonstrate that ANIC was aware of the potential risks it faced from Whittier's UST[]. Whittier notes that ANIC requested and obtained Loss Control reports in 1993 and 1996, both of which specifically discussed Whittier's USTs. Whittier argues that the request for information about the USTs indicates that ANIC acknowledged that it would be liable for any loss that arose from the gasoline in the USTs; it alternatively argues that the reports demonstrate that the policy is ambiguous as to whether the policy covers damages from UST leaks. There is no indication that, before the last of the five policies expired, Whittier had seen or been aware of the loss control reports. The documents therefore could not have led Whittier to reasonably expect the ANIC policies would cover claims that gasoline leaking from the USTs had caused property damage. Nor could the reports reasonably give rise to an inference that the insurer thought there was coverage for claims arising from gasoline that leaked from USTs. When reviewing a grant of summary judgment we draw all reasonable inferences in favor of the non-prevailing party below. [38] But it is not reasonable to infer that ANIC's underwriting files, which describe the USTs as part of a larger description of Whittier's facilities and do not discuss the likelihood of a UST leak or estimate the financial risk of a UST leak, could indicate that the ANIC policy might cover damages stemming from a gasoline leak. [39] Moreover, the existence of the information contained in the loss control reports does not demonstrate that the pollution exclusion was ambiguous. As ANIC argues, there are other reasons why ANIC's underwriting files would contain notes about Whittier's USTs, including potential liability risks that a UST could explode, collapse, or cause the ground to give way suddenly. ANIC argues that the lawsuits filed against Whittier demonstrate that gasoline is a pollutant. The private party complaints specifically charge Whittier with polluting the neighboring lands. The state complaint seeks costs associated with the abatement, containment, or removal of the pollutant. But absent contract language clearly specifying an objective perspective, our practice is to determine the meaning of a provision from the perspective of the insureds claiming coverage, not from that of third-party litigants. [40] In line with this practice, ANIC's argument that Whittier knew that the ANIC policies did not cover the damages from the UST leak is more persuasive. In 1999 Whittier applied for a Storage Tank System Third Party Liability and Corrective Action Policy from Zurich. The application asked, Do you currently have pollution coverage for the tanks applied for on this application? Whittier answered NO. A party's conduct may be evidence of its intent even if the conduct arose from a single instance so long as the conduct evinces an interpretation contrary to the party's interest. [41] Therefore Whittier could not have reasonably expected that the ANIC policies would cover damages from a UST gasoline leak. Because the language of the policies and extrinsic evidence do not suggest that the parties reasonably believed that damages stemming from leaked gasoline would be covered under the ANIC policies, we conclude that the reasonable expectations doctrine does not assist Whittier.