Court Opinion

ID: 2979043
Source: CourtListenerOpinion
Date Created: 2015-09-22 18:38:00.6799+00
Date Added: 2024-06-11T15:41:22.596816
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                           File Name: 10a0298n.06

                                           No. 09-3721                                     FILED
                                                                                     May 13, 2010
                          UNITED STATES COURT OF APPEALS                        LEONARD GREEN, Clerk
                               FOR THE SIXTH CIRCUIT

WHITT MACHINE, INC.,                                     )
                                                         )        ON APPEAL FROM THE
       Plaintiff-Appellant,                              )        UNITED STATES DISTRICT
                                                         )        COURT     FOR     THE
v.                                                       )        SOUTHERN DISTRICT OF
                                                         )        OHIO
ESSEX INSURANCE COMPANY,                                 )
                                                         )                 OPINION
       Defendant-Appellee.                               )

                                                                                       *
BEFORE:        COOK and McKEAGUE, Circuit Judges; HOOD, District Judge.

       McKEAGUE, Circuit Judge. Whitt Machine and Essex Insurance Company dispute the

extent of coverage under an insurance policy (the “Policy”) for loss resulting from a fire that

damaged a building owned by Whitt Machine and located at 800/806 Central Avenue, Middletown,

Ohio (the “800/806 Building”). Because the relevant Policy provisions are unambiguous and support

Essex’s position, we AFFIRM the district court’s decision.

                                       I. BACKGROUND

       Whitt Machine owns the property located at the 800/806 Building, which Essex insured

under the Policy. Among other things, the Policy provided coverage for certain fire loss. The Policy

deductible was and is $5,000.00. On or about May 26, 2007 a fire demolished the 800/806 Building

       *
        The Honorable Joseph M. Hood, United States District Judge for the Northern District of
Ohio, sitting by designation.
No. 09-3721
Whitt Machine, Inc. v. Essex Ins. Co.

and the resulting loss exceeded the Policy limits. Essex paid Whitt Machine $600,000 to cover the

direct physical loss of the building, and offered an additional $10,000 to Whitt Machine under the

debris removal coverage provisions of the Policy; however, Whitt Machine refused to accept the

additional $10,000. The actual costs for debris removal exceeded $10,000.

        The case was filed in the Ohio Court of Common Pleas for Butler County. It was removed

to federal district court on the basis of diversity jurisdiction on June 26, 2008. Both parties filed a

motion for partial summary judgment. The district court granted summary judgment for Essex, and

denied summary judgment for Whitt Machine, on April 14, 2009.

        1. Relevant provisions for the debris removal issue

        The first issue in dispute deals with the extent of coverage for debris removal. The disputed

portions of the Policy state that:

        A. COVERAGE

        We will pay for direct physical loss of or damage to Covered Property at the premises
        described in the Declarations caused by or resulting from any Covered Cause of Loss.

        1. Covered Property

        ***

        2. Property Not Covered

        ***

        3. Covered Causes of Loss

        ***

        4. Additional Coverages

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           a. Debris Removal

               (1) We will pay your expense to remove debris of Covered Property caused by
               or resulting from a Covered Cause of Loss that occurs during the policy period.
               The expenses will be paid only if they are reported to us in writing within 180
               days of the date of direct physical loss or damage.

               (2) The most we will pay under this Additional Coverage is 25% of:

                      (a) The amount we pay for the direct physical loss of or damage to
                      Covered Property; plus

                      (b) The deductible in this policy applicable to that loss or damage.

               But this limitation does not apply to any additional debris removal limit provided
               in the Limits of Insurance section.

       ***

       B. EXCLUSIONS AND LIMITATIONS

       See applicable Causes of Loss Form as shown in the Declarations.

       C. LIMITS OF INSURANCE

       The most we will pay for loss or damage in any one occurrence is the applicable Limit
       of Insurance shown in the Declarations.

       The most we will pay for loss or damage to outdoor signs attached to buildings is $1,000
       per occurrence.

       The limits applicable to the Coverage Extensions and the Fire Department Service
       Charge and Pollutant Clean Up and Removal Additional Coverages are in addition to the
       Limits of Insurance.

       Payments under the following Additional Coverages will not increase the applicable
       Limit of Insurance:

               1. Preservation of Property; or

               2. Debris Removal; but if

                                                 -3-
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                       a. The sum of direct physical loss or damage and debris removal
                       expense exceeds the Limit of Insurance; or

                       b. The debris removal expense exceeds the amount payable under the
                       25% limitation in the Debris Removal Additional Coverage;

               we will pay up to an additional $10,000 for each location in any one occurrence
               under the Debris Removal Additional Coverage. . . .

(R. 9-1 Insurance 16-18 (formatting taken from original; bold formatting replaced with underlining).)

       2. Relevant provisions for the pollution clean up issue

       The second issue in dispute is whether the Policy provides some additional coverage for

pollutant clean up and removal. The relevant disputed section of the Policy states that:

       A. COVERAGE

       ***

       4. Additional Coverages

       ***

           a. Debris Removal

       ***

           d. Pollutant Clean Up and Removal

               We will pay your expense to extract ‘pollutants’ from land or water at the
               described premises if the discharge, dispersal, seepage, migration, release or
               escape of the ‘pollutants’ is caused by or results from a Covered Cause of Loss
               that occurs during the policy period. . . .

               The most we will pay under this Additional Coverage for each described
               premises is $10,000 for the sum of all covered expenses arising out of Covered
               Causes of Loss occurring during each separate 12 month period of this policy.

                                                -4-
No. 09-3721
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(R. 9-1 Insurance 16-17 (formatting taken from original; bold formatting replaced with underlining).)

However, under the “Common Policy Conditions” it states that: “This policy contains all the

agreements between you and us concerning the insurance afforded. . . . This policy’s terms can be

amended or waived only by endorsement issued by us and made a part of this policy.” (R. 9-1

Insurance 6); see also (R. 9-1 Insurance 12 (“CHANGE IN CONDITIONS ENDORSEMENT –

Please read carefully as this changes coverage under your policy.”). The Policy contains a relevant

endorsement, the “Property Pollution Exclusion” Endorsement, which states that:

       This policy does not cover loss or damage caused directly or indirectly by the release
       or discharge or dispersal of toxic or hazardous substances, contaminants, or
       pollutants. Nor will we cover the cost of removal, disposal, decontamination or
       replacement of insured property which has been contaminated by toxic or hazardous
       substances, contaminates or pollutants and by law or civil authority must be restored,
       disposed of or decontaminated. Such loss is excluded regardless of any other cause
       or event that contributes concurrently or in any sequence to the loss.

(R. 9-1 Insurance 12.)

                                         II. ANALYSIS

1. Standard of Review

       This court reviews de novo the district court’s grant of summary judgment. Bender v.

Hecht’s Dep’t Stores, 455 F.3d 612, 619 (6th Cir. 2006). Summary judgment should be granted

when “the pleadings, the discovery and disclosure materials on file, and any affidavits show that

there is no genuine issue as to any material fact and that the movant is entitled to judgment as a

matter of law.” FED . R. CIV . P. 56(c)(2). A genuine issue of material fact exists when there are

“disputes over facts that might affect the outcome of the suit under the governing law.” Anderson

v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). However, “[w]here the record taken as a whole

                                                -5-
No. 09-3721
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could not lead a rational trier of fact to find for the non-moving party, there is no ‘genuine issue for

trial.’” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). When

jurisdiction is based on diversity of citizenship, state substantive law is used when interpreting

contract provisions. See Hickson Corp. v. Norfolk S. Ry. Co., 260 F.3d 559, 566 (6th Cir. 2001).

       a. Ohio substantive law

       The Ohio Supreme Court has stated that an insurance policy is a contract, which must be

interpreted by utilizing “the familiar rules of construction and interpretation applicable to contracts

generally.” See, e.g., Gomolka v. State Auto. Mut. Ins. Co., 436 N.E.2d 1347, 1348 (Ohio 1982)

(citation omitted); see also Hybud Equip. Corp. v. Sphere Drake Ins. Co., Ltd., 597 N.E.2d 1096

(Ohio 1992). An insurance contract, “is to be given a reasonable construction in conformity with

the intention of the parties as gathered from the ordinary and commonly understood meaning of the

language employed.” Andersen v. Highland House Co., 757 N.E.2d 329, 332 (Ohio 2001) (emphasis

in original) (quoting Dealers Dairy Products Co. v. Royal Ins. Co., 164 N.E.2d 745 (Ohio 1960));

see also Hybud, 597 N.E.2d at 1102 (“[T]he most critical rule is that which stops this court from

rewriting the contract when the intent of the parties is evident, i.e., if the language of the policy’s

provisions is clear and unambiguous, this court may not ‘resort to construction of that language.’”).

Furthermore, “[t]he intention of the parties must be derived . . . from the instrument as a whole, and

not from detached or isolated parts thereof.” Gomolka, 436 N.E.2d at 1351 (citations omitted).

       In general, “insurance policies are interpreted strictly against the insurer,” and therefore, “in

order to defeat coverage, ‘the insurer must establish not merely that the policy is capable of the

construction it favors, but rather that such an interpretation is the only one that can fairly be placed

                                                 -6-
No. 09-3721
Whitt Machine, Inc. v. Essex Ins. Co.

on the language in question.’” Anderson, 757 N.E.2d at 332-33 (quoting Reiter, Strasser & Pohlman,

The Pollution Exclusion Under Ohio Law: Staying The Course, 59 U. CIN . L. REV . 1165, 1179

(1991)) (noting also that it is “not suffic[ient] for [the insurer] to demonstrate that its interpretation

is more reasonable than the policyholder’s” and that “[w]here provisions of a contract of insurance

are reasonably susceptible of more than one interpretation, they will be construed strictly against the

insurer and liberally in favor of the insured” (internal quotations omitted)). However, “it is equally

well settled that a court cannot create ambiguity in a contract where there is none” and that

“[a]mbiguity exists only when a provision at issue is susceptible of more than one reasonable

interpretation.” Lager v. Miller-Gonzalez, 896 N.E.2d 666, 669 (Ohio 2008) (citation omitted).1

                ii. Endorsements

        “Where exceptions, qualifications or exemptions are introduced into an insurance contract,

a general presumption arises to the effect that that which is not clearly excluded from the operation

of such contract is included in the operation thereof.” Home Indem. Co. v. Village of Plymouth, 64
N.E.2d 248, 248, 251 (Ohio 1945) (citation omitted) (“Nothing but a clear and unambiguous

expression in an exception clause, amounting to a necessity for it, will justify a court in holding it

utterly inconsistent with the preceding general coverage clauses.”). However, where a policy

endorsement conflicts with another policy form, the endorsement controls. See e.g., Workman v.

        1
        Although in some jurisdictions, insurance contacts can be interpreted, at least in part, by
taking into consideration the “reasonable expectations” of the insured regarding the coverage
provided by the policy despite the fact that the policy language negates such expectations, this
doctrine has not been adopted by the Ohio Supreme Court. See Wallace v. Balint, 761 N.E.2d 598,
606 (Ohio 2002) (noting that “there is not yet a majority on this court willing to accept the
reasonable-expectations doctrine”).

                                                  -7-
No. 09-3721
Whitt Machine, Inc. v. Essex Ins. Co.

Republic Mut. Ins. Co., 56 N.E.2d 190, 194 (Ohio 1944) (overruled on other grounds by Brewer v.

De Cant, 149 N.E.2d 166, 168-69 (Ohio 1958)) (“The endorsement must be regarded as a

modification of the terms of the original contract of insurance if a clear inconsistency appears.”); see

also (R. 9-1 Insurance 12 (“CHANGE IN CONDITIONS ENDORSEMENT – Please read carefully

as this changes coverage under your policy.”).)

2. Additional coverage for debris removal claim

        Looking at the Policy in its entirety, we find that the district court was correct in interpreting

the Policy as unambiguously supporting Essex’s interpretation. The Policy divides into a number

of sections: “A. COVERAGE”; “B. EXCLUSIONS AND LIMITATIONS”; “C. LIMITS OF

INSURANCE”; etc. Some of those sections contain subsections. In particular, “A. COVERAGE”

contains “Subsection 4. – Additional Coverages” and “Subsection 4” contains “Subsection a. –

Debris Removal.” When viewed in this larger context, it is clear that “Section A.4.a.” is a part of

the general coverage section, which, like all of “Section A,” is subject to “Section C’, which states

the Limits of Insurance. This is true even though, like the other parts of “Section A,” “Section

A.4.a.” does not explicitly state that it is subject to the limits in “Section C.” Thus, even though

“Subsection A.4.a.” broadly states that, “[w]e will pay your expense to remove debris of Covered

Property caused by or resulting from a Covered Cause of Loss that occurs during the policy period,”

this promise is not absolute but, like the other parts of “Section A,” it is subject to the limits in

“Section C,” unless the Policy provides otherwise.

        The remainder of “Subsection A.4.a.” does not state otherwise. Instead, “Section A.4.a.”

goes on to state that:

                                                  -8-
No. 09-3721
Whitt Machine, Inc. v. Essex Ins. Co.

       (2) The most we will pay under this Additional Coverage is 25% of:

       (a) The amount we pay for the direct physical loss of or damage to Covered Property;
       plus

       (b) The deductible in this policy applicable to that loss or damage.

       But this limitation does not apply to any additional debris removal limit provided in
       the Limits of Insurance section

This phrase, “[t]he most we will pay,” indicates that this is an additional limit on whatever debris

removal coverage the Policy provides, and does nothing to remove the general language in “Section

C.” Furthermore, Whitt Machine’s efforts to eliminate the overall policy limitations in “Section C”

through the last sentence of “Subsection A.4.a.” are unavailing.2 That language may be ambiguous,

but not in the way Whitt Machine tries to read it and not in a way that undermines the entire Policy

and, therefore, somehow, means that Whitt Machine wins. The fact that “this limitation,” which

clearly refers to the limit of 25% of direct physical loss of or damage to covered property plus the

deductible laid out in (2)(a) and (2)(b), “does not apply to any additional debris removal limit

provided in the Limits of Insurance section” does not mean that the overall Policy limit provided in

the Limits of Insurance section does not apply to “Subsection A.4.a.” Instead, even if the limitation

in “Subsection A.4.a.” does not apply to any additional limit in “Section C,” this does not mean that

       2
        Whitt Machine reasons that this phrase can “only mean that the 25% amount will not be
limited by any other limit in the Limits of Insurance.” (Appellant Br. 11 (emphasis in original).)

                                                -9-
No. 09-3721
Whitt Machine, Inc. v. Essex Ins. Co.

the overall limit in “Section C” does not apply to “Subsection A.4.a.”3 Thus, “Subsection A.4.a”

does not limit or eliminate the overall policy limit provided in “Section C.”

        There is only one other relevant section of the Policy, “Section C,” which states generally

that, “[t]he most we will pay for loss or damage in any one occurrence is the applicable Limit of

Insurance shown in the Declarations.” This language is broad and clearly includes within its limits

the loss or damage stemming from debris removal. Thus, the total limit of $600,000 also applies to

“Subsection A.4.a.” unless something else removes this limit.

        The next two relevant provisions in “Section C” describe the “Additional Coverages” listed

in “Subsection A.4.” The first provision contains some of the “Additional Coverages,” but not

Debris Removal, which is contained in the second provision.4 The first provision states that “[t]he

limits applicable to the . . . Fire Department Service Charge and Pollutant Clean up and Removal

Additional Coverage are in addition to the Limits of Insurance.” Both parties seem to agree that the

limitations in this first provision mean that, for these selected additional coverages, the “in addition”

language means that the insured can recover under these additional coverages even though the Limit

        3
         Instead, this language (referring to any additional debris removal limit provided in the Limits
of Insurance) is either not applicable (after all, it states that it does not apply “to any additional”
limit, not that there must be an additional limit), or it refers to the additional limit of $10,000 that
is provided in “Section C” if the overall policy limit is maxed out, or if the debris removal costs
exceed 25% of the direct physical loss of or damage to Covered Property (thus, the additional
$10,000 provided in “Section C” for debris removal is not subject to the further 25% limitation in
“Section A.4.”). Whitt Machine’s suggested reading is simply not reasonable.
        4
          The Additional Coverages provision of the Policy lists four additional coverages. Two are
listed in the first provision: (1) the Fire Department Service Charge and (2) Pollutant Clean Up and
Removal. Two are listed in the second provision: (3) Debris Removal and (4) Preservation of
Property.

                                                 - 10 -
No. 09-3721
Whitt Machine, Inc. v. Essex Ins. Co.

of Insurance ($600,000 in this case) has been reached. In fact, Whitt Machine is also seeking

recovery (of an additional $10,000) under the Pollutant Clean Up Additional Coverage, “Section

A.4.d.,” for its asbestos clean up costs. In any event, the second provision is critical, and it states

that “[p]ayments under the [Preservation of Property and Debris Removal] Additional Coverages

will not increase the applicable Limit of Insurance.” The only reasonable way to read this sentence,

even allowing for the different language in the first provision, is that it means that the payments for

debris removal will not increase the overall limit and, since they are still subject to it, they cannot

go beyond it.

       Similarly, the concluding exception in “Section C,” which provides that if either “[t]he sum

of direct physical loss or damage and debris removal expense exceeds the Limit of Insurance” or

“debris removal expense exceeds the amount payable under the 25% limitation in the Debris

Removal Additional Coverage” then Essex “will pay up to an additional $10,000 for each location

in any one occurrence under the Debris Removal Additional Coverage” does not undermine this

reading. This provision simply allows an additional $10,000 to be paid, under certain circumstances,

in spite of the overall ($600,000) limit on insurance. The fact that “additional” is before $10,000

does not mean that the $10,000 requires that a certain additional amount be paid (other than the

$10,000) under the debris removal additional coverage. Rather, it means that, despite the limitations

in both “Section C” and “Subsection A.4.a.,” an additional $10,000 can be paid if the circumstances

                                                - 11 -
No. 09-3721
Whitt Machine, Inc. v. Essex Ins. Co.

articulated in “Section C.2.a.-b.” are met. Therefore, the $10,000 does not eliminate the other policy

limits, and it is in addition to the overall policy limit in this case.5

        In short, after examining all the relevant provisions, we agree with the district court that the

only reasonable reading of the Policy is that the Limits of Insurance in “Section C” ($600,000) apply

to “Subsection A.4.a.” and that there is no reason in the Policy language to remove these limits.

Consequently, we affirm the district court’s decision and uphold Essex’s reading of the Policy

language concerning debris removal.

3. Pollution removal claim

        The language of the Policy also unambiguously shows that the Policy does not provide

additional coverage for Whitt Machine’s pollution removal costs. The Policy states in “Section

A.4.d” under “Additional Coverages” that Essex will: “pay your expense to extract ‘pollutants’ from

land or water at the described premises if the discharge, dispersal, seepage, migration, release or

        5
         Four cases discussing nearly identical policy provisions are analyzed in some detail by both
parties. Three cases support Essex’s position: (1) Strowig Properties, Inc. v. American States Ins.
Co., 80 P.3d 72 (Kan. App. 2003); (2) Genovese v. Twin City Fire Ins., 1994 WL 228580 (Conn.
Super. May 17, 1994); (3) Katz v. Certain Undrs. at Lloyd’s of London, 2009 Phila. Ct. Com. Pl.
Lexis 90 (May 4, 2009). One case supports Whitt Machine’s position: (4) LGC Investments, Inc.,
LLC, 2006 WL 1508708. As this court noted in Park-Ohio Industries, Inc. v. Home Indem. Co., 975
F.2d 1215, 1220 (6th Cir. 1992), the fact that other courts have found a policy ambiguous does not,
as a matter of law, make that policy ambiguous in Ohio.
        In LGC Investment, Inc., the court found that a policy with nearly identical relevant language
was ambiguous, and that it could have multiple reasonable interpretations. Initially, LGC is
distinguishable because the additional $10,000 limit (or provision) was included within the
“Additional Coverages” section (in particular, in subparagraph 4) instead of in the Limits of
Insurance section (as is the case here). LGC, 2006 WL 1508708 at *1. This different placement may
have changed how LGC interpreted the overall structure of the policy it was analyzing. In any event,
LGC does not persuade us that the language here is ambiguous.

                                                  - 12 -
No. 09-3721
Whitt Machine, Inc. v. Essex Ins. Co.

escape of the ‘pollutants’ is caused by or results from a Covered Cause of Loss that occurs during

the policy period.” The expense to extract pollutants dispersed by the fire (a covered cause of loss)

would place this under “Section A.4.d.” Thus, if this were the only provision in the Policy, it seems

that Essex would owe Whitt Machine $10,000. However, the Policy also contains an Endorsement

which must be considered, and which prevents coverage.6

        The Endorsement states that it “does not cover loss or damage caused directly or indirectly

by the release or discharge or dispersal of toxic or hazardous substances, contaminants, or

pollutants.” We find that this language excludes coverage because the loss or damage here was

caused, at least in part, directly or indirectly, by the release, discharge or dispersal of asbestos. The

fire was also a cause of the loss or damage. However, the fact that the fire was also a cause of the

damage does not mean that the Endorsement does not apply. Instead, the loss or damage here falls

under both “Section A.4.d.” and the Endorsement and the language of the Endorsement and the

        6
          Prior to the fire, the 800/806 Building contained “asbestos-containing material” that was not
hazardous. As a result of the fire, friable asbestos was created from the burning of the asbestos-
containing material in the 800/806 Building. Whitt Machine points out that the pre-fire asbestos-
containing material was not a hazardous pollutant in its then existing condition. (Appellant Br. at
22.) It cites to an affidavit for this proposition, which states that, “[t]he [asbestos-containing
material] was non-hazardous in its form pre-Fire.” (R. 11 Snarski ¶ 6.) However, even if the
asbestos was in a non-hazardous (non-friable) form before the fire, it was still a pollutant, and
therefore, still covered under the Endorsement. See Selm v. American States Ins. Co., 2001 WL
1103509, *3 (Ohio App. 1 Dist. Sept. 21, 2001) (construing very similar policy provision to find
that, “[t]here is no doubt that asbestos is an irritant or contaminant, and therefore a pollutant under
the policy”). The Endorsement applies not just to pollutants, but also to toxic or hazardous
substances and contaminates. Furthermore, friable asbestos, which resulted from the fire, was a
pollutant, and it is clear that the loss or damage from pollution that Whitt Machine seeks recovery
for here was also caused by the release, discharge, or dispersal of friable asbestos, which, in turn, was
created by the release, discharge, or dispersal of asbestos.

                                                 - 13 -
No. 09-3721
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language of the additional coverage for pollution clean up conflict. In this situation, under Ohio law,

the Endorsement governs.

       Whitt Machine makes several arguments to the contrary. First, it tries to place its claim for

asbestos removal under “Section A.4.d.” and explain how the Endorsement does not conflict because

it only seeks to clean up and remove friable asbestos caused by the fire (a Covered Cause of Loss)

and, therefore, that the damage was caused by the fire, not the pollution. (Appellee Br. 25.)

However, even if the fire caused the release, discharge or dispersal of asbestos, the Endorsement still

prevents coverage because the damage from pollution Whitt Machine now seeks to recover for under

“Section A.4.d.” was also caused, directly or indirectly, by the release, discharge or dispersal of

asbestos and, therefore, prohibited by the Endorsement. Consequently, the Endorsement conflicts

with “Section A.4.d.” Under these circumstances, the Endorsement governs and prohibits coverage.

       Whitt Machine also argues that Stiriz v. Motorists Mut. Ins. Co., 2002 WL 479826 (Ohio Ct.

App. 6 Dist. March 29, 2002) shows that: (1) “the pollution coverage language and the

[Endorsement] can be reconciled to provide coverage caused by a covered cause of loss, just as Whitt

Machine requests here,” and (2) if the Endorsement eliminated all coverage, the pollution portion

of the policy would be meaningless and unenforceable (and, therefore, against public policy in Ohio).

(Appellant Br. at 27.); see also Stiriz, 2002 WL 479826 at *5 (finding that the pollution exclusion

was clear and unambiguous and that it superceded the additional coverage for pollutant clean up

provision).7

       7
       Whitt Machine also analogizes to Gonzalez v. Western Mut. Ins. Co., 2004 WL 3019113
(Cal App. 4 Dist. Dec. 30, 2004). Initially, Gonzalez is a “nonpublished/noncitable” case under the

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No. 09-3721
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       The first argument is incorrect because, while Stiriz involved a nearly identical policy

provision to “Section A.4.d.,” concerning additional coverage for pollutant clean up, it also, in

contrast to the Endorsement in this case, provided a pollution exclusion in its definition of a

“Covered Cause of Loss” (instead of in a separate endorsement):

       According to the policy, “Covered Cause of Loss” means risks of direct physical loss,
       but does not include “loss or damage caused by or resulting from” the “discharge,
       dispersal, seepage, migration, release or escape of ‘pollutants’ unless the discharge,
       dispersal, seepage, migration, release or escape is itself caused by any of the
       ‘specified causes of loss’.” Specified causes of loss include, in part, lightning,
       windstorm or hail, vehicles, vandalism, sinkhole collapse, falling objects, weight of
       snow, ice or sleet, and water damage (which does not include rain).

California Rules of Court. See CAL. RULES OF COURT §§ 8.1105, 8.1110, 8.1115. However,
Gonzalez is also distinguishable on several grounds. First, in Gonzalez, the parties agreed that there
was no dispute that the “fire was the sole cause of the claimed loss.” 2004 WL 3019113 at *1-*2.
Furthermore, the language of the policy in Gonzalez differs from the language in the Endorsement
here. In Gonzalez, the language stated:

       We do not insure for loss caused directly or indirectly by any of the following. Such
       loss is excluded regardless of any other cause or event contributing concurrently or
       in any sequence to the loss . . .

       Pollution. All loss, damages, costs and/or expenses arising out of or caused by
       pollution, and all costs and/or expenses incurred by you to test for, monitor, clean up,
       remove, contain, treat, detoxify or neutralize pollutants. Pollutants means any solid,
       liquid, gaseous or thermal irritant or contamination, including but not limited to
       vapor, fumes, acids, alkalis, chemicals, asbestos and waste. Waste includes but is not
       limited to material to be recycled, reconditioned or reclaimed.

Id. at *1 (emphasis removed from original opinion). In contrast, the Endorsement here covers loss
or damage that is caused not just by pollution, but by the release or discharge or dispersal of toxic
or hazardous substances, contaminants, or pollutants. This language is broader than the language
in Gonzalez. In any event, Gonzalez does not persuade us that the language of the Policy is
ambiguous.

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No. 09-3721
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2002 WL 479826 at *2. This language is different from the Endorsement, since it envisions

coverage for loss or damage resulting from the discharge, dispersal, seepage, migration, release or

escape of pollutants if, “the discharge, dispersal, seepage, migration, release or escape is itself caused

by any of the ‘specified causes of loss.’” Id. In contrast, the Endorsement makes no such allowance.

        Concerning the second argument, Stiriz did state that “the pollution exclusion is not so broad

and general as to eliminate all pollution coverage, thereby rendering the coverage language

meaningless, against public policy, or unenforceable.” Id. at * 5. However, even if an insurance

policy eliminates pollution coverage, like the Policy in this case, it would not consequently be invalid

as against public policy. Stiriz does not cite to any case law supporting this proposition. Clearly a

valid insurance policy can be sold without providing pollution coverage. If a policy can be sold

without pollution coverage, but while still providing substantial coverage – as the Policy here did

– then there is no reason why the Policy cannot eliminate additional coverage for pollution clean up

through an Endorsement, even though that renders the additional coverage for pollution clean up

meaningless and unenforceable. That is simply the way the contract is written, and the terms that

Whitt Machine agreed to.

        In short, after examining all the relevant provisions, we find that the only reasonable reading

is that the Endorsement applies to the damages for asbestos removal that Whitt Machine is seeking

here, and that it conflicts with and supercedes “Section A.4.d.” Consequently, we affirm the district

court’s decision and uphold Essex’s reading of the Policy language.

                                         III. CONCLUSION

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No. 09-3721
Whitt Machine, Inc. v. Essex Ins. Co.

       Because the relevant Policy provisions are unambiguous and support Essex’s position on

both the issue of debris removal and the cost for removing the asbestos, we AFFIRM the district

court’s decision

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