Absolute Pollution Exclusion Encompassed Carbon Monoxide Released Indoors, Minnesota Supreme Court Rules

The Minnesota Supreme Court has ruled that the absolute pollution exclusion encompassed carbon monoxide released in a home by a boiler that allegedly had been negligently installed. 

The Case 

Homeowners sued a contractor, alleging that negligence in the installation of a boiler led to the discharge of carbon monoxide in their home, which injured them. The contractor’s insurer, Midwest Family Mutual Insurance Company, sought a declaration that it owed no duty to defend or indemnify the contractor because coverage was barred under the absolute pollution exclusion in the general liability insurance policy it had issued to the contractor. 

The trial court denied Midwest’s motion for summary judgment but the court of appeals reversed, holding that carbon monoxide constituted a “pollutant” under the Midwest policy. The case reached the Minnesota Supreme Court. 

The Minnesota Supreme Court’s Decision 

The court affirmed. 

The court found that the definition of “pollutants” in the exclusion was not ambiguous in the context of this case and then held that “carbon monoxide released from a negligently installed boiler” was “clearly a ‘pollutant'” that was subject to the absolute pollution exclusion in the Midwest policy. 

The court noted that it had taken a “non-technical, plain-meaning approach” to interpreting pollution exclusions. It pointed out that the definition of “pollutant” in the Midwest policy included “any . . . gaseous . . . pollutant, irritant or contaminant,” that the federal government classified carbon monoxide as a pollutant and regulated its concentration under the Clean Air Act, and that the Minnesota Pollution Control Agency classified carbon monoxide as a “criteria pollutant” that it actively regulated.

Moreover, the court found, carbon monoxide also was an “irritant” under the policy, noting that the complaint alleged that carbon monoxide had been discharged or released into the air, causing physical irritation to the homeowners.

Significantly, the court also pointed out that the pollution exclusion in the Midwest policy did not use language “descriptive of the natural environment only,” such as “atmosphere,” and thus it held that the policy’s pollution exclusion applied to the release of carbon monoxide indoors. 

Finally, the court rejected the homeowners’ contention that there was coverage under the “reasonable expectations” test because a reasonable policyholder in the homeowners’ position would not have understood that the absolute pollution exclusion precluded coverage in this case. The court explained that because the absolute pollution exclusion was plainly designated as an exclusion, the “reasonable expectations” test did not apply. 

The case is Midwest Family Mutual Ins. Co. v. Wolters, No. A11-0181 (Minn. May 31, 2013).