Andersen v. Highland House Co.

[This decision has been published in Ohio Official Reports at 

93 Ohio St.3d 547

.]




   ANDERSEN, ADMR., v. HIGHLAND HOUSE COMPANY ET AL., APPELLANTS;
                     INDIANA INSURANCE COMPANY, APPELLEE.
           [Cite as Andersen v. Highland House Co., 

2001-Ohio-1607

.]
Insurance—Carbon monoxide emitted from a residential heater is not a
        “pollutant” under the pollution exclusion of a commercial general
        liability insurance policy unless specifically enumerated as such.
     (No. 00-1214—Submitted May 15, 2001—Decided November 14, 2001.)
       APPEAL from the Court of Appeals for Cuyahoga County, No. 75769.
                                  __________________
                               SYLLABUS OF THE COURT
Carbon monoxide emitted from a residential heater is not a “pollutant” under the
        pollution exclusion of a commercial general liability insurance policy
        unless specifically enumerated as such.
                                  __________________
        ALICE ROBIE RESNICK, J.
        {¶ 1} On March 7, 1997, Lisa Andersen died and Daniel Wojtala was
injured after inhaling carbon monoxide fumes from a faulty heating unit inside the
Highland House Apartments, a multiunit complex owned by appellant Highland
House Company (“Highland House”) and managed by appellant Renaissance
Management, Inc. (“RMI”). At the time of the accident, Highland House and RMI
were covered by commercial insurance policies issued by appellee Indiana
Insurance Company (“Indiana Insurance”). All of the policies contained pollution
exclusions.
        {¶ 2} As a result of Andersen’s death, three lawsuits were filed. In the first
action, Andersen’s estate sued Highland House and RMI for wrongful death. In
the second action, Highland House and RMI sought a declaratory judgment that
                             SUPREME COURT OF OHIO




Indiana Insurance had a duty to defend and indemnify them in the wrongful death
action. In the third action, Indiana Insurance sought a declaratory judgment that it
did not have a duty to defend and indemnify Highland House and RMI. All three
cases were consolidated and the underlying tort claims were settled. Thereafter,
the trial court focused on the scope of policy coverage relative to the pollution
exclusions.
       {¶ 3} Highland House and RMI moved for summary judgment, arguing that
the pollution exclusion language was ambiguous and should only be construed as
pertaining to environmental pollution. Conversely, Indiana Insurance contended
that the policy language was unambiguous and clearly excluded claims for death
and injuries related to residential carbon monoxide poisoning. The trial court ruled
in favor of Highland House and RMI, and Indiana Insurance appealed. The Eighth
District Court of Appeals reversed, finding that the policies precluded coverage.
The cause is now before this court upon the allowance of a discretionary appeal.
       {¶ 4} The issue before us is whether the pollution exclusion language in the
present case precludes coverage for death and injuries stemming from residential
carbon monoxide poisoning. We hold today that Indiana Insurance does have a
duty to defend and indemnify the insureds because the policy language in question
does not clearly, specifically, and unambiguously state that coverage for residential
carbon monoxide poisoning is excluded. We, therefore, reverse the judgment of the
court of appeals.
       {¶ 5} A grant of summary judgment is reviewed under a de novo standard.
Doe v. Shaffer (2000), 

90 Ohio St.3d 388, 390

, 

738 N.E.2d 1243, 1245

. In order to
resolve the coverage question, we must first review the pollution exclusion policy
language. In pertinent part, the exclusion states:
       “2. Exclusions.
       “This insurance does not apply to:
       “* * *




                                          2
                                  January Term, 2001




          “f. Pollution
          “(1) ‘Bodily injury’ or ‘property damage’ arising out of the actual, alleged
or threatened discharge, dispersal, seepage, migration, release or escape of
pollutants:
          “(a) At or from any premises, site or location which is or was at any time
owned or occupied by, or rented or loaned to, any insured;
          “* * *
          “Pollutants means any solid, liquid, gaseous or thermal irritant or
contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and
waste.”
          {¶ 6} In Dealers Dairy Products Co. v. Royal Ins. Co. (1960), 

170 Ohio St. 336

, 

10 O.O.2d 424

, 

164 N.E.2d 745

, paragraph one of the syllabus, the court
established that “[a] policy of insurance is a contract and like any other 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.” (Emphasis added.)
          {¶ 7} Indiana Insurance argues that carbon monoxide qualifies as a
“pollutant” in the instant case because it is a “gaseous * * * irritant or contaminant”
and that by definition, it is “a colorless odorless very toxic gas * * * formed as a
product of the incomplete combustion of carbon * * *.” Webster’s Third New
International Dictionary (1986) 336.       Indiana Insurance further contends that
Highland House and RMI should have known that deaths and injuries caused by
carbon monoxide poisoning would not be covered based on the general definition
of “pollutants” provided in the policy. However, in Home Indemn. Co. of New York
v. Plymouth (1945), 

146 Ohio St. 96

, 

32 O.O. 30

, 

64 N.E.2d 248

, paragraph two of
the syllabus, this court stated that “[w]here exceptions * * * 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




                                           3
                             SUPREME COURT OF OHIO




thereof.” (Emphasis added.) Thus, Plymouth reasons that if a policy does not
plainly exclude a claim from coverage, then an insured may infer that the claim will
be covered.
       {¶ 8} In the case at bar, the policy in question never clearly excludes claims
for deaths or injuries caused by residential carbon monoxide poisoning. It is not
the responsibility of the insured to guess whether certain occurrences will or will
not be covered based on nonspecific and generic words or phrases that could be
construed in a variety of ways. Thus, 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 on the
language in question.” Reiter, Strasser & Pohlman, The Pollution Exclusion Under
Ohio Law: Staying The Course (1991), 59 U.Cin.L.Rev. 1165, 1179. See Lane v.
Grange Mut. Cos. (1989), 

45 Ohio St.3d 63, 65

, 

543 N.E.2d 488, 490

 (“Where
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”).
       {¶ 9} Furthermore, the genesis of the pollution exclusion does not support
the notion that it was created to preclude the kind of claim involved in this case. In
June 1970, the insurance industry “went on record as being ‘against’ intentional
polluters and promulgated the qualified pollution exclusion for insertion in all
comprehensive general liability (CGL) insurance policies.” (Footnotes omitted.)
Reiter, Strasser & Pohlman, supra, 59 U.Cin.L.Rev. at 1168. The insurance
industry explained that “[a]ccidental pollution continued to be insured under a CGL
policy, but deliberate polluters would remain uncovered, unable to use insurance to
avoid the financial consequences of their acts. On the basis of these representations,
nearly every state, including Ohio, allowed the introduction of this new, qualified
pollution exclusion.” (Footnotes omitted.) Id.




                                          4
                                January Term, 2001




       {¶ 10} The exclusion disputed in the case at bar, the absolute pollution
exclusion, “was drafted during the early 1980s and was incorporated into the
standard form CGL [policies] in 1986.” Stempel, Reason and Pollution: Correctly
Construing the “Absolute” Exclusion in Context and in Accord With Its Purpose
and Party Expectations (1998), 34 Tort & Ins.L.J. 1, 5. The purpose of the new
exclusion was “to replace the 1973 ‘sudden and accidental’ exclusion because
insurers were distressed by judicial decisions holding that the 1973 exclusion did
not preclude coverage for gradual but unintentional pollution.” Id. Further, “[t]he
absolute exclusion was designed to bar coverage for gradual environmental
degradation of any type and to preclude coverage responsibility for government-
mandated cleanup[s].” Id.
       {¶ 11} Based on the history and original purposes for the pollution
exclusion, it was reasonable for Highland House and RMI to believe that the
policies purchased for their multiunit complex would not exclude claims for injuries
due to carbon monoxide leaks. Thus, since insurance policies are interpreted
strictly against the insurer, “[i]t will not suffice for [Indiana Insurance] to
demonstrate that its interpretation is more reasonable than the policyholder’s.”
Reiter, Strasser & Pohlman, supra, 59 U.Cin.L.Rev. at 1179. See Am. Fin. Corp.
v. Fireman’s Fund Ins. Co. (1968), 

15 Ohio St.2d 171, 174

, 

44 O.O.2d 147, 148

,

239 N.E.2d 33, 35

 (“[T]he insurer, being the one who selects the language, must be
specific in its use, and an exclusion from liability must be clear and exact in order
to be given effect”).
       {¶ 12} The legal effect of the reasonable belief on the part of Highland
House and RMI is comparable to the effect of the reasonable-expectations doctrine.
       {¶ 13} The Restatement of the Law 2d, Contracts (1981), Section 211,
Comment f, discusses the ambit of the reasonable-expectations doctrine:
       “Terms excluded. * * * Although customers typically adhere to
standardized agreements and are bound by them without even appearing to know




                                          5
                             SUPREME COURT OF OHIO




the standard terms in detail, they are not bound to unknown terms which are beyond
the range of reasonable expectation. * * * Similarly, a party who adheres to the
other party’s standard terms does not assent to a term if the other party has reason
to believe that the adhering party would not have accepted the agreement if he had
known that the agreement contained the particular term. * * * Reason to believe
may be inferred from the fact that the term is bizarre or oppressive, from the fact
that it eviscerates the non-standard terms explicitly agreed to, or from the fact that
it eliminates the dominant purpose of the transaction.”
       {¶ 14} While we make no determination on the merits of the reasonable-
expectations doctrine, this rationale could apply to the case at bar. Highland House
and RMI are both involved in the rental property business. A major concern of
these two entities, and many owners and managers of commercial and residential
property, is deaths or injuries caused by carbon monoxide poisoning. To protect
themselves from any potential claims based on that hazard, the two companies were
covered by insurance policies. None of the policies identified carbon monoxide
poisoning as a hazard excluded from coverage. Based on the information given in
the policies, Highland and RMI reasonably believed that Indiana Insurance would
defend and indemnify them against claims related to potential premises hazards and
did not anticipate that such claims would be denied based on the pollution
exclusion.
       {¶ 15} Other jurisdictions also recognize the importance of interpreting
ambiguities in insurance contracts in favor of the insured. In Davis v. M.L.G. Corp.
(Colo.1986), 

712 P.2d 985, 989

, the court, quoting Elliott Leases Cars, Inc. v.
Quigley (1977), 

118 R.I. 321, 325-326

, 

373 A.2d 810, 812

, stated: “ ‘If there
remains any doubt, the terms should be read in the sense which the insurer had
reason to believe they would be interpreted by the ordinary reader and purchaser.
The test to be applied is not what the insurer intended by his words, but what the
ordinary reader and purchaser would have understood them to mean.’ ” (Emphasis




                                          6
                                January Term, 2001




added.) In Regional Bank of Colorado, N.A. v. St. Paul Fire & Marine Ins. Co.
(C.A.10, 1994), 

35 F.3d 494, 498

, the court said that “[w]hile a reasonable person
of ordinary intelligence might well understand [that] carbon monoxide is a pollutant
when it is emitted in an industrial or environmental setting, an ordinary
policyholder would not reasonably characterize carbon monoxide emitted from a
residential heater which malfunctioned as ‘pollution.’ ” Although these cases are
not controlling, they do provide persuasive support for the underlying notion that
this particular policy language is ambiguous and therefore should be interpreted in
favor of the insured. As the final authority on Ohio law, we must take the
opportunity to prevent an absurd and unreasonable result—one that was never
clearly intended by Highland House or RMI and one that was never clearly
communicated by Indiana Insurance. The court in Am. States Ins. Co. v. Koloms
(1997), 

177 Ill.2d 473, 492-493

, 

227 Ill.Dec. 149, 158

, 

687 N.E.2d 72, 81

, best
described the real purpose of the pollution exclusion when it wrote: “Our review of
the history of the pollution exclusion amply demonstrates that the predominate
motivation in drafting an exclusion for pollution-related injuries was the avoidance
of the ‘enormous expense and exposure resulting from the “explosion” of
environmental litigation.’ (Emphasis added.) Weaver [v. Royal Ins. Co. of Am.
(1996)], 140 N.H. [780] at 783, 674 A.2d [975] at 977, quoting Vantage
Development Corp. v. American Environment Technologies Corp., 

251 N.J.Super. 516, 525

, 

598 A.2d 948, 953

 (1991). * * * We would be remiss * * * if we were
to simply look to the bare words of the exclusion, ignore its raison d’etre, and apply
it to situations which do not remotely resemble traditional environmental
contamination.” Based on this sound logic, and on other principles stated herein,
we hold that carbon monoxide emitted from a malfunctioning residential heater is
not a pollutant under the pollution exclusion of a comprehensive general liability
policy unless specifically enumerated as such. We, therefore, reverse the judgment
of the court of appeals and reinstate the judgment of the trial court.




                                          7
                             SUPREME COURT OF OHIO




                                                                Judgment reversed.
       DOUGLAS, F.E. SWEENEY, PFEIFER and LUNDBERG STRATTON, JJ., concur.
       DOUGLAS, F.E. SWEENEY and LUNDBERG STRATTON, JJ., concur separately.
       MOYER, C.J., and COOK, J., dissent.
                              __________________
       DOUGLAS, J., concurring.
       {¶ 16} I concur in the syllabus, judgment, and opinion of the majority. I
write further only to bring attention to evidence in the record that I believe shows
that Indiana Insurance intended these policies to provide coverage for accidents
involving carbon monoxide exposure.          This evidence is in the form of an
“Apartment Evaluation Supplement” questionnaire completed by an underwriter
for Indiana Insurance in determining whether to issue insurance policies to
Highland House and RMI. The questionnaire was to be “used by the underwriter
to review * * * all the major underwriting standards important in the determination
if a risk qualifies for [insurance]” and was “meant to alert the underwriter to the
more common elements of underwriting this class of business.” Under the heading
“Premises Liability” the questionnaire asks whether carbon monoxide detectors are
provided in the apartments. (The word “some” was written next to this inquiry on
the questionnaire.) If, as Indiana Insurance asserts, the standard commercial
general liability insurance policy denies coverage for carbon monoxide exposure,
then why would the standard apartment evaluation supplement question whether
carbon monoxide detectors are provided in the apartments and why would the
underwriter feel compelled to answer the question? If carbon monoxide exposure
were not covered, then why would this information be “important in the
determination if a risk qualifies for [insurance]”? I believe that this questionnaire
clearly shows that Indiana Insurance intended its commercial general liability
policies of insurance to provide coverage for carbon monoxide exposure
notwithstanding its pollution exclusion. At a minimum, the underwriter’s request




                                         8
                                  January Term, 2001




for this information from a potential insured supports the potential insured’s
reasonable belief that liability for such accidents would be covered by the policy.
          F.E. SWEENEY and LUNDBERG STRATTON, JJ., concur in the foregoing
concurring opinion.
                                  __________________
          COOK, J., dissenting.
          {¶ 17} Today’s majority relies upon questionable analytical foundations in
a strained attempt to find coverage where none exists. I therefore respectfully
dissent for the reasons that follow.
                       Interpretation of the Pollution Exclusion
          {¶ 18} Each of the policy exclusions at bar states, with minor variations in
wording irrelevant to this court’s inquiry, that coverage does not extend to          “
‘bodily injury’ or ‘property damage’ arising out of the actual, alleged or threatened
discharge, dispersal, seepage, migration, release or escape of pollutants.”         A
“pollutant” is defined as “any solid, liquid, gaseous or thermal irritant or
contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and
waste.”
          {¶ 19} Construing this language, the trial court held that the exclusion
applied “only to environmental discharge of traditionally environmental pollutants
and not to cases involving exposure to carbon monoxide produced by a defective
heating unit inside of a residential apartment unit.” The court of appeals rejected
this conclusion, holding that “the pollution exclusion in the insurance contract
issued to the insureds clearly and unambiguously precluded coverage for the claims
asserted by the injured parties.”
          {¶ 20} I agree with the reasoning and conclusion of the court of appeals. It
is well settled that “insurance contracts must be construed in accordance with the
same rules as other written contracts.” Hybud Equip. Corp. v. Sphere Drake Ins.
Co., Ltd. (1992), 

64 Ohio St.3d 657, 665

, 

597 N.E.2d 1096, 1102

. Therefore, “if




                                           9
                              SUPREME COURT OF OHIO




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

Id.,

 quoting Karabin v. State Auto.
Mut. Ins. Co. (1984), 

10 Ohio St.3d 163, 167

, 10 OBR 497, 499, 

462 N.E.2d 403, 406

. Rather, courts must give the words and phrases used in an insurance policy “
‘their natural and commonly accepted meaning, where they in fact possess such
meaning, to the end that a reasonable interpretation of the insurance contract
consistent with the apparent object and plain intent of the parties may be
determined.’ ” 

Id.,

 quoting Tomlinson v. Skolnik (1989), 

44 Ohio St.3d 11, 12

, 

540 N.E.2d 716, 717-718

.
       {¶ 21} Whether the carbon monoxide incident that occurred in this case fits
within the pollution exclusion therefore depends upon the meaning of the exclusion
language. The majority finds that the exclusions contain “nonspecific and generic
words or phrases that could be construed in a variety of ways.” This conclusion,
however, both devalues any suggestion that, absent contrary intent, some words
carry fixed meanings and favors conjuring ambiguity over objectivity.
       {¶ 22} The exclusions’ heading is “pollution.” Two natural and commonly
accepted meanings of pollution are “1: the action of polluting [especially] by
environmental contamination with man-made waste; also: the condition of being
polluted 2: POLLUTANT.” (First emphasis added.) Merriam-Webster’s Collegiate
Dictionary (10 Ed.1999) 902. The dictionary definition of a “pollutant” is simply
“something that pollutes.” 

Id.

 As noted, the exclusions provide a more detailed
definition of “pollutants.”
       {¶ 23} Carbon monoxide fits into both definitions of a pollutant, as its
commonly accepted meaning is “a colorless odorless very toxic gas CO that burns
to carbon dioxide with a blue flame and is formed as a product of the incomplete
combustion of carbon.”        (Emphasis added.)     Merriam-Webster’s Collegiate
Dictionary, supra, at 171. This definition falls within the exclusion’s definition of
pollution as “any * * * gaseous * * * irritant or contaminant, including * * * vapor,




                                         10
                                January Term, 2001




* * * fumes, * * * [and] chemicals.” One commonly accepted meaning of “vapor”
is “a substance in the gaseous state as distinguished from the liquid or solid state.”
(Emphasis added.) Id. at 1306. Similarly, a “fume” is “a smoke, vapor, or gas
[especially] when irritating or offensive” or “an often noxious suspension of
particles in a gas (as air).” (Emphasis added.) Id. at 472. These are not technical
definitions describing environmental terms of art.          The words are neither
“nonspecific” nor “generic.” Rather, these are common words bearing commonly
accepted meanings available to any layperson. Therefore, I conclude both that
carbon monoxide falls within the foregoing definition of a “pollutant” and that the
policies clearly exclude coverage.
       {¶ 24} Courts construing Ohio law have reached similar conclusions
regarding pollution exclusions. See Zell v. Aetna Cas. & Sur. Ins. Co. (1996), 

114 Ohio App.3d 677

, 

683 N.E.2d 1154

 (pollution exclusion precluded coverage for
fumes from weatherproofing materials); Air Prods. & Chems. v. Indiana Ins. Co.
(Dec. 23, 1999), Hamilton App. Nos. C-980947 and C-990009, unreported, 

2000 WL 955600

, at *6 (pollution exclusion precluded coverage for methane gas leak);
Owners Ins. Co. v. Singh (Sept. 21, 1999), Richland App. No. 98-CA-108,
unreported, 

1999 WL 976249

, at *3 (pollution exclusion was clear and
unambiguous so as to preclude coverage for carbon monoxide from a
malfunctioning furnace). See, also, Longaberger Co. v. United States Fid. & Guar.
Co. (S.D.Ohio 1998), 

31 F.Supp.2d 595

, affirmed (C.A.6, 1999), 

201 F.3d 441

(unpublished disposition), opinion at 

1999 WL 1252874

 (both holding that under
Ohio law a similar pollution exclusion was not ambiguous and precluded coverage
for carbon monoxide released into a home by a furnace).
       {¶ 25} Courts in other jurisdictions have reached the same conclusion
regarding the scope of such pollution exclusions. See, e.g., Deni Assoc. of Florida,
Inc. v. State Farm Fire & Cas. Ins. Co. (Fla.1998), 

711 So.2d 1135, 1138

, quoting
Am. States Ins. Co. v. F.H.S., Inc. (S.D.Miss.1991), 

843 F.Supp. 187, 190

 (“The




                                         11
                              SUPREME COURT OF OHIO




court reiterates that it is not free to rewrite the terms of the insurance contract where
that contract is not ambiguous”); W. Am. Ins. Co. v. Band & Desenberg
(M.D.Fla.1996), 

925 F.Supp. 758, 761

 (“The majority of courts that have reviewed
these absolute [pollution] exclusions have found them to be unambiguous and have
enforced then in accordance with their plain language”). See, also, 9 Russ &
Segalla, Couch on Insurance (3 Ed.1997) 127-36 to 127-37, Section 127:14, fn. 30
(collecting cases that have found “absolute” pollution exclusions unambiguous),
and 127-39, Section 127:15 (noting that the majority view regards such exclusions
as unambiguous). Accordingly, I would hold that the pollution exclusions at issue
herein clearly and unambiguously preclude coverage.
                         Historical Context of the Exclusion
        {¶ 26} The majority relies upon “the genesis of the pollution exclusion” to
conclude that “[b]ased on the history and original purposes for the pollution
exclusion, it was reasonable for Highland House and RMI to believe that the
policies purchased for their multiunit complex would not exclude claims for injuries
due to carbon monoxide leaks.” Without citing a basis for doing so, the majority
apparently credits Highland House and RMI as having had knowledge of the
historical development of absolute pollution exclusions at the time they purchased
the relevant policies and accepts this as informing the relevant policy language. But
Indiana Insurance argues that Highland House and RMI failed to produce summary
judgment evidence in the record supporting this “historical context” argument.
        {¶ 27} By focusing on supposed after-the-fact knowledge of the insureds,
the majority narrows the meaning of the pollution exclusions beyond that conveyed
by the common understanding of the words. The policy language itself, however,
offers no reason to eschew the dictionary uses of these common words in favor of
discerning the meaning from the historical development of pollution exclusions.
The text of the policy exclusions guides judicial interpretation. Nothing in the text
of the policies limits application of the exclusions to environmental-type pollution.




                                           12
                                January Term, 2001




        {¶ 28} Instead, as noted, the exclusions contain ordinary words that on their
face bear the broad application understood by the court of appeals here. To collapse
the exclusions’ broad meaning in the way the majority does contradicts axiomatic
contract principles. See Hybud Equip. Corp., 

64 Ohio St.3d at 665

, 

597 N.E.2d at 1102

 (court cannot engage in construction of policy language when language is
clear and unambiguous). See, also, Madison Constr. Co. v. Harleysville Mut. Ins.
Co. (1996), 

451 Pa.Super. 136, 144

, 

678 A.2d 802, 806

 (declining to divine the
public policy behind an exclusion where “the policy language is clear and
unambiguous” and where such an exercise would                 “ ‘convolute the plain
meaning of a writing merely to find an ambiguity,’ ” quoting O’Brien Energy Sys.,
Inc. v. Am. Employers’ Ins. Co. [1993], 

427 Pa.Super. 456, 462

, 

629 A.2d 957, 960

).
                        Reasonable-Expectations Doctrine
        {¶ 29} Despite the foregoing substantive deficiencies, the majority
nonetheless finds the effect of Highland House’s and RMI’s alleged history-based
belief “comparable to the effect of the reasonable-expectations doctrine.” While
then professing to “make no determination on the merits of the reasonable-
expectations doctrine,” the majority proceeds in the following pages to find that the
doctrine’s rationale could apply to the case at bar. Such dicta serve only to confuse
the state of insurance law in Ohio.
        {¶ 30} In its earliest formation, the reasonable-expectations doctrine arose
from two principles: that “an insurer will be denied any unconscionable advantage
in an insurance transaction,” and that “the reasonable expectations of applicants and
intended beneficiaries [of an insurance policy] will be honored.” Keeton, Insurance
Law Rights at Variance With Policy Provisions (Part One) (1970), 83 Harv.L.Rev.
961. See, also, Keeton, Insurance Law Rights at Variance With Policy Provisions
(Part Two) (1970), 83 Harv.L.Rev. 1281. Courts have disagreed over the scope
and operation of this doctrine. See, generally, Swisher, A Realistic Consensus




                                         13
                             SUPREME COURT OF OHIO




Approach to the Insurance Law Doctrine of Reasonable Expectations (2000), 35
Tort & Ins.L.J. 729; Henderson, The Doctrine of Reasonable Expectations in
Insurance Law After Two Decades (1990), 51 Ohio St.L.J. 823; Ware, A Critique
of the Reasonable Expectations Doctrine (1989), 56 U.Chi.L.Rev. 1461.
       {¶ 31} Some courts, for example, adhere to the belief that the doctrine
operates in instances of ambiguity, permitting a court to grant coverage “if ‘the
policyholder, upon reading the contract language is led to a reasonable expectation
of coverage.’ ” Meridian Mut. Ins. Co. v. Kellman (C.A.6, 1999), 

197 F.3d 1178, 1183

, quoting Fire Ins. Exchange v. Diehl (1996), 

450 Mich. 678, 687

, 

545 N.W.2d 602, 606

; Max True Plastering Co. v. United States Fid. & Guar. Co. (Okla.1996),

912 P.2d 861, 868-869

. See, also, Ware, 56 U.Chi.L.Rev. at 1467-1468, fn. 32
(collecting cases using this approach). Other courts have adopted a more expansive
understanding of the doctrine in which “even an unambiguous policy may be
‘interpreted according to the reasonable expectations of the insured.’ ” (Emphasis
added.) Nelson v. Becton (C.A.8, 1991), 

929 F.2d 1287

, quoting Atwater Creamery
Co. v. W. Natl. Mut. Ins. Co. (Minn.1985), 

366 N.W.2d 271, 277

. See, also, Ware,
56 U.Chi.L.Rev. at 1469-1472, fn. 40 (collecting cases adopting a “fine-print”
approach in which terms buried in a policy will not be enforced when they conflict
with an insured’s reasonable expectations) and 1472-1475, fn. 54 (collecting cases
adopting a “whole-transaction” approach in which courts will also consider
insurers’ marketing patterns and general practices in deciding whether policy terms
should be enforced). This court has mentioned the doctrine recently in Davidson v.
Motorists Mut. Ins. Co. (2001), 

91 Ohio St.3d 262, 269-270

, 

744 N.E.2d 713

, 719.
       {¶ 32} Setting aside the curious technique of devoting several pages of an
opinion to a doctrine that the opinion expressly declines to rely upon, it is unclear
what form of the rejected doctrine the majority finds potentially applicable to this
case. The majority cites both Highland House’s and RMI’s alleged belief of
coverage (without record evidence) and “the importance of interpreting ambiguities




                                         14
                                January Term, 2001




in insurance contracts in favor of the insured.” If the majority were confident in its
decision that the exclusions are indeed ambiguous, it is equally unclear why the
majority would resort to discussing parties’ beliefs when Ohio already recognizes
that courts shall construe ambiguous insurance contract language in favor of the
insured and strictly against the insurer. See, e.g., Faruque v. Provident Life & Acc.
Ins. Co. (1987), 

31 Ohio St.3d 34

, 31 OBR 83, 

508 N.E.2d 949

, syllabus.
        {¶ 33} In any event, I would not reach the questions of the applicability and
the scope of the reasonable-expectations doctrine here because the facts of this case
would not support it. That is, even if Highland House and RMI subjectively
believed that coverage would extend to a carbon monoxide leak, such an
expectation must nonetheless have been objectively reasonable under the doctrine.
And given that the language employed in the pollution exclusion on its face is not
limited to environmental-type pollution, I would conclude that this subjective
expectation of coverage is not objectively reasonable under the terms of the
policies.
        {¶ 34} For the foregoing reasons, I would hold that the pollution exclusions
in the insurance policies preclude coverage.       Because Indiana Insurance was
entitled to judgment as a matter of law, I would affirm the judgment of the court of
appeals.
        MOYER, C.J., concurs in the foregoing dissenting opinion.
                               __________________
        Benesch, Friedlander, Coplan & Aronoff, LLP, David W. Mellot and Mark
D. Tucker, for appellants.
        Green & Green and Thomas M. Green, for appellee.
        Robert P. Rutter, urging reversal for amicus curiae Ohio Academy of Trial
Lawyers.
        Davis & Young and David J. Fagnilli, urging affirmance for amicus curiae
Insurance Environmental Litigation Association.




                                         15
                           SUPREME COURT OF OHIO




       Baker, Dublikar, Beck, Wiley & Mathews and James P. Hanratty, urging
affirmance for amicus curiae Ohio Association of Civil Trial Attorneys.
                             __________________




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