Opinion ID: 902272
Heading Depth: 2
Heading Rank: 3

Heading: The McSpadden Lawsuit

Text: The complaint in the McSpadden Lawsuit, though similar or identical in many respects, included allegations not found in the Briley complaint, namely: 30. Additionally, throughout its existence, [Doe Run has] permitted the Leadwood Pile to be left open and available for use by the general public. -7- 32. Until on or about October 2009, no fencing or other physical barriers were in place around the Leadwood Pile. 33. Until on or about October 2009, no warning signs addressing the dangers of exposure to lead at the Leadwood Pile were posted on or around the Leadwood Pile. 34. Upon information and belief, the lead contaminated contents of the chat piles have been used extensively throughout St. Francois County as fill material and for use on roads, streets, alleyways, driveways, in the foundation of homes and/or other buildings, and for use in children’s sandboxes. COUNT I -- Negligence 38. Additionally, [Doe Run] distributed and/or allowed for the distribution of chat containing dangerously high levels of lead and other toxic substances to the general public and/or surrounding community. 39. Moreover, throughout its existence, [Doe Run] permitted the Leadwood Pile to be left open and available for use as a park by the general public. The Leadwood Pile has been used by the general public, and by plaintiffs, for various recreational purposes. 42. [Doe Run was] negligent in the following respects: a. In failing to control and contain lead and other toxic substances from the release and/or distribution to areas beyond the boundaries of the Leadwood Pile; b. In distributing and/or allowing for the distribution of chat containing dangerously high levels of lead and other toxic substances to the general public and/or surrounding community; e. In failing to control or attempt to control public access to the Leadwood Pile; -8- f. In failing to place fencing or physical barriers around the Leadwood Pile; g. In failing to post signs warning of the danger of lead exposure on and around the Leadwood Pile; and h. In failing to make the community generally aware of the dangers posed by recreational use of the Leadwood Pile. COUNT II -- Strict Liability for the Release of Toxic Substances 49. Additionally, [Doe Run] distributed and/or allowed for the distribution of chat containing dangerously high levels of lead and other toxic substances to which plaintiffs were exposed into the stream of commerce and environment. 50. The chat was put to foreseeable, reasonably anticipated and intended uses, including but not limited to filling sandboxes, use in the foundation of homes, and spraying on streets for the purpose of snow removal. 51. The chat was in a defective condition and unreasonably dangerous when put to these reasonably anticipated uses . . . . COUNT III -- Strict Liability for Allowing Public Access [to] the Leadwood Pile 57. Allowing the area on and around the Leadwood Pile to be open and available for use by the general public and by plaintiffs constitutes an abnormally dangerous activity or ultra hazardous activity . . . . 59. Additionally, [Doe Run] distributed and/or allowed for the distribution of chat and other substances containing dangerously high levels of lead and other toxic substances to which plaintiffs were exposed into the stream of commerce and environment by allowing public access on and around the Leadwood pile. -9- 60. With unrestricted public access, the area on and around the Leadwood Pile was put to foreseeable, reasonably anticipated and intended uses, including but not limited to sledding, riding fourwheelers, riding dirt bikes, and general playing, similar to playing in the sand on a beach. 61. The area on and around the Leadwood Pile was in a defective condition and unreasonably dangerous when put to these reasonably anticipated uses . . . . To the extent the McSpadden complaint alleged bodily injury or property damage resulting from the release of hazardous wastes or toxic substances, the pollution exclusions bar coverage of those claims for the reasons we discussed in Doe Run I and in Part II of this opinion. But “[t]he presence of some insured claims in the underlying suit gives rise to a duty to defend, even though uninsured claims or claims beyond the coverage may also be present.” Lampert v. State Farm Fire & Cas. Co., 85 S.W.3d 90, 93 (Mo. App. 2002). The pollution exclusions in the Lexington Policies exclude coverage only for bodily injury or property damage “which would not have occurred in whole or part but for the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants.”2 Unlike the Briley complaint and the underlying complaint at issue in Doe Run I, the above-quoted portions of the McSpadden complaint were broadly pleaded and were not explicitly premised on an alleged release of hazardous wastes or toxic substances. The McSpadden complaint alleged bodily injury and property damage from two causes that did not necessarily entail a “release” of hazardous wastes or toxic 2 This quote is from the post-November 2004 policies. Substantially similar phrasing in the earlier policies also required a “discharge, dispersal, release, or escape” of “pollutants or contaminants.” See Doe Run I, slip op. at 7, -- F.3d at --. Responding to questions at oral argument, counsel for Lexington agreed that, “If there’s no release, there’s no pollution exclusion.” -10- substances, introducing those claims with the transitional words “additionally” and “moreover.” First, plaintiffs alleged that Doe Run distributed chat and other toxic substances into the community for use “as fill material and for use on roads, streets, alleyways, driveways, in the foundation of homes and/or other buildings, and for use in children’s sandboxes.” “Distribute” is not among the transitive verbs that trigger the pollution exclusion. Furthermore, the distribution of material from the Leadwood Pile for use as a product is markedly different than the inadvertent “discharge, dispersal, seepage, migration, release or escape” of those waste materials. Unlike the “transport and deposition” allegations in the trespass claim of the Briley Lawsuit, these “distribute” allegations were not based upon the underlying factual premise of “releases”; alleged the distribution of material for use as a product, not the inadvertent release of pollutants; and were introduced with the transitional word “additionally.” See Truck Ins. Exch. v. Prairie Framing, LLC, 162 S.W.3d 64, 82 (Mo. App. 2005) (imposing a duty to defend because the third party asserted claims that were independent of those falling within a policy exclusion). The difference is illustrated by the City of Sparta decision. There, the “release” that triggered the policy’s pollution exclusion did not occur when the City distributed wastewater treatment sludge to a farmer for use as a fertilizer. 997 S.W.2d at 546. Rather, the excluded release occurred when toxic substances contained in the sludge allegedly migrated to a neighbor’s land, causing damage. Id. at 552; Doe Run I, slip op. at 10-11, -- F.3d at --. The McSpadden complaint alleged that the distribution of these materials harmed plaintiffs, without specifying how that harm occurred. A liability insurer has a duty to defend its insured when the underlying complaint “sufficiently alleges facts stating a claim potentially within the policies’ coverage.” Superior Equip. Co. v. Md. Cas. Co., 986 S.W.2d 477, 482 (Mo. App. 1998) (emphasis added); see Esicorp, Inc. v. Liberty Mut. Ins. Co., 193 F.3d 966, 969-70 (8th Cir. 1999). -11- Second, the McSpadden complaint alleged that Doe Run caused bodily injury or property damage when it left the Leadwood Pile “open and available for use by the general public” until October 2009 without posting “warning signs addressing the dangers of exposure to lead,” allegations resembling an attractive nuisance claim against a landowner. Again, absent from these allegations was any reference to a release; plaintiffs alleged that they came to the pollutants. It may be that the only claim the McSpadden plaintiffs will be able to prove will be bodily injury or property damage caused by the threatened release of pollutants. In that event, the pollution exclusions will apply, and Lexington will have no duty to indemnify Doe Run if it is found liable. But the issue here is the broader duty to defend. Under Missouri law, “[t]he duty to defend arises whenever there is a potential or possible liability to pay based on the facts at the outset of the case and is not dependant on the probable liability to pay based on the facts ascertained through trial.” McCormack, 989 S.W.2d at 170 (quotation omitted). Applying this principle, we conclude that the McSpadden Lawsuit includes allegations and claims that are not unambiguously barred from coverage by the pollution exclusions in the Lexington Policies. Therefore, unless another exclusion or defense not yet considered by the district court applies, Lexington has a duty to defend the McSpadden Lawsuit. For these reasons, we affirm the grant of summary judgment insofar as it dismisses Doe Run’s claims relating to the Briley Lawsuit, but we reverse the grant of summary judgment dismissing Doe Run’s claims relating to the McSpadden Lawsuit as precluded by the pollution exclusions. The judgment of the district court is reversed in part, and the case is remanded to that court for further proceedings not inconsistent with this opinion. ______________________________ -12-