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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Whittier Properties, Inc. v. Alaska National Insurance Co. (06/13/2008) sp-6273

Whittier Properties, Inc. v. Alaska National Insurance Co. (06/13/2008) sp-6273, 185 P3d 84

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,


) Supreme Court No. S- 12538
Appellant, )
) Superior Court Nos. 3AN-05-14377 CI
v. )
) O P I N I O N
COMPANY, ) No. 6273 June 13, 2008
Appellee. )

          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, Peter A. Michalski, Judge.

          Appearances:   George R. Lyle, Guess  &  Rudd
          P.C., Anchorage, for Appellant.  Brewster  H.
          Jamieson  and  Andrea E. Girolamo-Welp,  Lane
          Powell LLC, Anchorage, for Appellee.  Randall
          J.  Weddle,  Holmes Weddle  &  Barcott  P.C.,
          Anchorage, and Laura A. Foggan, John C. Yang,
          and  Benjamin  J. Theisman, Wiley  Rein  LLP,
          Washington,  D.C., for Amicus Curiae  Complex
          Insurance Claims Litigation Association.

          Before:     Fabe,  Chief  Justice,  Matthews,
          Eastaugh, and Carpeneti, Justices.

          EASTAUGH, Justice.
          Is gasoline that leaked from the broken fill pipe of an
underground  storage tank a pollutant within the meaning  of  the
absolute  pollution  exclusion  contained  in  the  tank   owners
commercial liability insurance policies?  We conclude that it is,
that  the  policies  pollution exclusions unambiguously  excluded
property  damage arising out of the escape of gasoline, and  that
other  policy  provisions  do not restore  or  otherwise  provide
coverage.   We therefore affirm the summary judgment entered  for
the  insurer,  Alaska  National Insurance  Company,  against  the
insured, Whittier Properties, Inc.
          Whittier Properties, Inc. owned and operated a  Zipmart
gas  station  and convenience store near Sterling  from  1990  to
2000.   In  August 1995 Whittier closed the stations  two  10,000
gallon  underground  storage tanks (USTs)  and  installed  a  new
20,000  gallon, three-compartment UST.  When Whittiers contractor
installed  the  new UST it noticed soil contamination.   Although
the   Alaska  Department  of  Environmental  Conservation  (ADEC)
notified  Whittier that it should perform clean up, Whittier  did
not comply with ADECs notice.
          Alaska   National  Insurance  Company   (ANIC)   issued
Whittier five commercial general liability insurance policies  at
relevant times, providing liability coverage from May 29, 1996 to
May  29,  2001.1  Coverage A of each policy covers bodily  injury
and  property  damage.   Each policy also  contains  a  pollution
exclusion   for   property  damage  arising  out  of   discharge,
dispersal,  seepage, migration, release or escape of  pollutants.
Each policy defines a pollutant as any solid, liquid, gaseous  or
thermal  irritant or contaminant, including smoke,  vapor,  soot,
fumes, acids, alkalis, chemicals and waste.
          In  December  1999 Whittier also obtained  a  federally
required Storage Tank System Third-Party Liability and Corrective
Action  Policy  from  Zurich American  Insurance  Company.2   The
Zurich  policy  provided  coverage  retroactive  to  1997.    The
application  for  the  Zurich  policy  asked  Whittier  [d]o  you
currently  have pollution coverage for the tanks  listed  in  the
application; Whittier replied NO.
          In  December  2000  Whittier  closed  its  Zipmart  gas
station.  In December 2001 environmental specialists investigated
the site and found nearly a foot of free gasoline floating on the
groundwater.  ADEC hired Statewide Petroleum Service  to  inspect
Whittiers  UST;  in February 2003 Statewide discovered  that  the
vertical fill pipe for one compartment of the new UST was broken.
          The Alaska Attorney General commissioned an analysis of
Whittiers  fuel  inventory records in April 2003.   The  analysis
disclosed  that the fill pipe first broke in February 1997,  that
the  break diminished in size from October 1997 to January  1998,
and  that the break reopened in February 1998.  The analysis also
determined  that  at least 50,800 gallons of gasoline  were  lost
from  the time the fill pipe broke in 1997 until Whittier  closed
the gas station in 2000.
          Some   of  Whittiers  neighbors  filed  three  lawsuits
against  Whittier  in  2003 and early 2004 for  compensatory  and
          punitive damages allegedly resulting from leaked gasoline
entering their properties.
          In   February   2004  Whittier  tendered  defense   and
indemnity  for  the  three  claims to ANIC  under  two  of  ANICs
policies (98E PS 54321 and 99E PS 54321) and requested copies  of
two  other  policies  (96E  PS 54321 and  97E  PS  54321).   ANIC
initially  expressed  doubt  that  the  claims  were  within  the
policies  coverage,  but later stated that ANIC  would  carefully
review  the  claims.   Later that month  Whittier  also  tendered
defense and indemnity for the claims under policies 96E PS  54321
and  97E  PS  54321.   In  March Whittier  tendered  defense  and
indemnity  for  the claims under the fifth ANIC  policy,  00E  PS
          In May 2004 ANIC informed Whittier that it had reviewed
the  lawsuits  and  policies and determined  that  there  was  no
potential for coverage under the policies and no duty on the part
of  ANIC  to defend the[] lawsuits.  ANIC explained that gasoline
that  leaked from the UST fell within the pollution exclusion  in
each of the ANIC policies.
          From  May  2004 to May 2005 neighbors filed  four  more
lawsuits against Whittier for damage to their land caused by  the
leaked gasoline.  One of those neighbors, Sterling Baptist Church
(Church), also asserted a trespass claim.  In September 2005  the
State  of  Alaska sued Whittier for response costs, damages,  and
penalties  arising  from the leaked gasoline.  Whittier  tendered
defense and indemnity for these five claims to ANIC.  In December
2005 ANIC denied coverage for the lawsuits after determining that
the pollution exclusion barred coverage for the claims.
          Whittier sued ANIC for breach of contract, coverage  by
estoppel,  bad faith, and punitive damages.  Whittier  moved  for
summary judgment, arguing that ANIC was estopped from raising any
coverage  defenses because it failed to defend  Whittier  against
potentially  covered claims.  ANIC opposed Whittiers  motion  and
cross-moved  for  summary  judgment,  arguing  that  each  policy
unambiguously   excluded  the  leaked  gasoline  from   coverage.
Whittier  opposed  the cross-motion and again moved  for  summary
judgment,  this  time arguing that there were exceptions  to  the
pollution  exclusion.  Whittier later moved for summary  judgment
on  the  theory  there was no valid pollution  exclusion  in  the
personal injury coverage (Coverage B) of the ANIC policies.
          ANIC  filed an additional motion for summary  judgment,
arguing  that it had properly denied all of Whittiers tenders  of
defense  and indemnity.  The superior court granted ANICs  motion
and  cross-motion  for  summary  judgment  and  denied  Whittiers
          Whittier appeals.
     A.   Standard of Review
          We review grants of summary judgment de novo and affirm
only  if  there are no genuine issues of material  fact  and  the
prevailing party is entitled to judgment as a matter of law.3  We
draw  all  reasonable inferences in favor of  the  non-prevailing
          Contract interpretation presents a question of law that
          we review de novo.5  We look to the language of the disputed
policy  provision, other provisions of the policy,  and  relevant
extrinsic   evidence.6   The  policy  generally  determines   the
liability  of  the  insurer.7   We  recognize  a  restriction  on
coverage  if an insurer by plain language limits the coverage  of
its  policy.8  But because of inequities in bargaining power,  we
construe  coverage broadly and exclusions narrowly, in  favor  of
insureds.9   To  the  extent that we deal with  issues  of  first
impression,  we  adopt  the  rule most  persuasive  in  light  of
precedent, reason, and policy.10
     B.   The Absolute Pollution Exclusion
          One  of  the most contested and highly litigated issues
in  the  field  of liability insurance is the scope of  pollution
exclusion clauses.11  The first standard pollution exclusion  was
incorporated in commercial general liability policies in 197012 to
combat adverse selection and reduce moral hazard.13  The original
exclusion,   sometimes  called  the  sudden  and  accidental   or
qualified   pollution  exclusion,  contained  an  exception   for
discharge, dispersal, release, or escape [that] . . .  is  sudden
and accidental.14  Applying Alaska law, three courts construed the
qualified pollution exclusion in favor of policyholders.15
          In   1986  regulatory  authorities  approved  a   major
expansion  in the scope of the pollution exclusion by eliminating
the sudden and accidental exception.16  The revised exclusion  is
so  broad that it is often termed absolute,17 even though it does
not exclude all pollution-related liability.18
          The  ANIC policies include Coverage A, covering  bodily
injury  and  property damage, Coverage B, covering  personal  and
advertising injury, and Coverage C, covering medical payments for
bodily   injury.   Coverage  A  contains  an  absolute  pollution
exclusion (subsection 2.f.(1)) excluding  property damage arising
out  of  the  actual, alleged or threatened discharge, dispersal,
seepage,  migration, release or escape of pollutants.  Pollutants
are  defined  under Coverage A as any solid, liquid,  gaseous  or
thermal  irritant or contaminant, including smoke,  vapor,  soot,
fumes,  acids,  alkalis,  chemicals and  waste.   Waste  includes
materials to be recycled, reconditioned or reclaimed.
          1.   The  pollution  exclusion contained  in  the  ANIC
               policies is not ambiguous.
          Whittier argues that gasoline is not a pollutant  under
the  exclusion;  it alternatively argues that  the  exclusion  is
ambiguous  as  to  whether  it  excludes  leaked  gasoline   from
coverage.19   As  Whittier notes, when a clause in  an  insurance
policy is ambiguous, we must accept the interpretation that  most
favors  the insured.20  But  [a]n ambiguity does not exist merely
because the parties disagree as to the interpretation of a term.21
We  emphasized  in Nelson v. Progressive Casualty  Insurance  Co.
that  ambiguity is only present if inconsistent, but  reasonable,
interpretations of the contract are possible.22
          Although  we  have not, before now, had the opportunity
to  determine whether the absolute pollution exclusion  generally
contained  in commercial general liability policies is ambiguous,
numerous jurisdictions have addressed whether leaked gasoline  is
          a pollutant within the meaning of the policy exclusion.  Whittier
relies  heavily  on  two  cases  determining  that  the  absolute
pollution exclusion was ambiguous.23  Like Whittier, the  insured
in  the first case, American States Insurance Co. v. Kiger, owned
and  operated a gas station, and the absolute pollution exclusion
was  almost  identical to Whittiers pollution  exclusion.24   The
Kiger  court  held that pollution in regards to  the  policy  was
ambiguous and construed the term against the insurer.25  The court
reasoned  that although gasoline is sometimes referred  to  as  a
pollutant,  the language of a policy must be explicit to  exclude
coverage  for damage caused by leakage of gasoline and  that  the
term pollutant did not obviously include gasoline.26
          Whittier  also cites Hocker Oil Co. v. Barker-Phillips-
Jackson,  Inc.27  Deeming the Kiger courts rationale  persuasive,
the   Hocker  court  concluded  that  the  insurers  failure   to
specifically  identify gasoline as a pollutant in  its  pollution
exclusion   resulted  in  uncertainty  and  indistinctness,   and
therefore  held  that  the  policy was ambiguous  as  to  whether
gasoline was a pollutant for purposes of the exclusion.28
          But  we  conclude that the better-reasoned approach  is
the  one advocated by ANIC and adopted by the majority of  courts
that  have  reviewed a pollution exclusion identical or  markedly
similar to the clause in the ANIC policies.29  We hold that there
is  no ambiguity because, even though gasoline that is in the UST
is a product for purposes of other parts of the insurance policy,
when  the  gasoline escapes or reaches a location where it is  no
longer a useful product it is fairly considered a pollutant.
          2.   Whittiers interpretation is unreasonable.
          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  insureds  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
          Whittiers  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 policies35 and the majority  of  courts
deciding  the  issue  have rejected similar arguments,36  we  are
unpersuaded by Whittiers 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 stations  product,  and
leaked gasoline that contaminates soil and water as a pollutant.37
          Finally, as to extrinsic evidence, Whittier argues that
ANICs  underwriting files demonstrate that ANIC was aware of  the
potential  risks it faced from Whittiers UST[].   Whittier  notes
that ANIC requested and obtained Loss Control reports in 1993 and
1996,  both  of  which  specifically  discussed  Whittiers  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
          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 ANICs underwriting files, which describe
the  USTs as part of a larger description of Whittiers 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  ANICs underwriting files would contain notes about Whittiers
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,  ANICs  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 partys 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 partys 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.

     C.   Other  Provisions  of  the Policy  Do  Not  Restore  or
          Otherwise Provide Coverage.
          Whittier  argues  that even if we  determine  that  the
pollution exclusion unambiguously bars coverage for damages  from
leaked gasoline, it may still prevail based on various provisions
of  the  ANIC policies to which the pollution exclusion does  not
          Whittier first argues that ANIC should cover the claims
because  Whittier  contractually assumed liability  for  its  UST
contractor.    It  asserts  that  the  exceptions   for   insured
contract[s]  and  completed  operations  apply  because  of  this
assumed liability.
          The  ANIC policies contain an exclusion for contractual
liability.42   But  there is an exception to that  exclusion  for
damages  [a]ssumed in a contract or agreement that is an  insured
contract. 43
          In  February  1995  the  state  conferred  a  grant  on
Whittier  to  offset Whittiers cost of installing the  new  tank.
The  states  complaint against Whittier asserts that  the  states
award letter contains an indemnity provision.  Whittier therefore
argues  that because Whittier agreed to indemnify the  state  for
the  negligence  of  Whittiers  contractor,  the  contractor  was
covered under the insured contract exception.
          Whittier also argues that the pollution exclusion  does
not  apply  because  the leaked gasoline was the  result  of  the
contractors completed operations.  Whittier points to a  workbook
issued by the Insurance Services Office, Inc. (ISO), an agent  of
ANIC and a company supplying underwriting claims information  for
insurance  companies; the workbook states that there is  coverage
for  some  off-site  emissions, including the  Products/Completed
Operations exposure.
          Whittiers  assumed-liability arguments are  unavailing.
The  assumption-of-liability exception does not apply because the
state  is  not being sued.  Moreover, there is no coverage  under
the  products-completed operations hazard  provision  because  an
exclusion  explicitly  states when  it  does  not  apply  to  the
provision;44  the  pollution exclusion does not  contain  such  a
statement.   And in any event, an insured cannot create  coverage
under  a  policy containing a pollution exclusion by agreeing  to
indemnify a third party for the same risk.45
          Whittier  next  argues that the Churchs trespass  claim
should  be  covered  under Coverage B.   Coverage  B  contains  a
pollution  exclusion  worded  identically  to  the  exclusion  in
Coverage  A,  excluding  [p]ersonal injury or advertising  injury
          . . . [a]rising out of the actual, alleged or threatened
discharge,  dispersal, seepage, migration, release or  escape  of
pollutants.   The  definition of pollutants is the  same  as  the
definition under Coverage A.  But the pollution exclusion was not
added  to Coverage B until 1996.  Although the fill pipe did  not
break  until  1997,  Whittier argues  that  there  was  no  valid
pollution  exclusion under Coverage B for any year  because  ANIC
did not give Whittier advance notice of the change as required by
          Regardless  of  whether  there was  a  valid  pollution
exclusion  added  to  Coverage B, there is no  coverage  for  the
trespass  claims  under  Coverage B.  Whittier  argues  that  the
trespass claim is covered under Coverage B because it arises from
[t]he  .  .  . wrongful entry into . . . premises that  a  person
occupies  by or on behalf of its owner, landlord or lessor.   But
Whittier  is  not the owner, landlord, or lessor of  the  Churchs
property;  Coverage  B  applies to landlord-tenant  situations.47
And,  because  accepting Whittiers interpretation of  Coverage  B
would  render  the pollution exclusion in Coverage A meaningless,
we  are  persuaded  by  the reasoning of other  courts  rejecting
similar  attempts  to  use  Coverage B  to  evade  the  pollution
exclusion in Coverage A.48
          Finally,  Whittier argues that there is coverage  under
an  exception for liability Whittier would have in the absence of
government-required cleanup.  Subsection f.(1) of  the  pollution
exclusion,  as  discussed  above,  excludes  from  coverage   all
liability  for  [b]odily injury or property damage  arising  from
pollutants;  subsection f.(2) separately  excludes  coverage  for
loss,  cost  or  expense arising out of any governmental  cleanup
orders  or  claims.  Whittier asserts that a paragraph  following
f.(2) and stating that this paragraph does not apply to liability
.  .  .  the  insured would have in the absence of  such  request
applies  with  equal force to except the claims against  Whittier
from  the  exclusion  in f.(1).  We disagree.   If  an  exception
restores coverage, the coverage remains subject to the limitation
of each and every exclusion;49 therefore, the pollution exclusion
in f.(1) still bars coverage for bodily injury or property damage
stemming from pollution.50

          Because  the pollution exclusion unambiguously excludes
leaked gasoline from coverage and the other policy provisions  do
not restore or otherwise provide coverage, we AFFIRM the judgment
     1     Policy 96E PS 54321 was effective May 29, 1996 to  May
29,  1997; Policy 97E PS 54321 was effective May 29, 1997 to  May
29,  1998; Policy 98E PS 54321was effective May 29, 1998  to  May
29,  1999; Policy 99E PS 54321was effective May 29, 1999  to  May
29,  2000; and Policy 00E PS 54321 was effective May 29, 2000  to
May 29, 2001.

     2      The  Zurich  policy  was  the  subject  of  unrelated
litigation brought against Whittier in 2004 arising from the same
leaked  gasoline at issue in this case.  See Zurich Am. Ins.  Co.
v. Whittier Props. Inc., 356 F.3d 1132 (9th Cir. 2004).

     3     Morgan v. Fortis Benefits Ins. Co., 107 P.3d 267,  269
(Alaska  2005)  (affirming grant of summary judgment  to  insurer
because   claimants   death  fell  under   policys   intoxication

     4    Id.

     5     Nelson  v. Progressive Cas. Ins. Co., 162  P.3d  1228,
1231  (Alaska 2007) (affirming grant of partial summary  judgment
after  deciding  that named driver exclusion was unambiguous  and
barred coverage for pedestrians negligent entrustment claim).

     6    Id.

     7     C.P. ex rel. M.L. v. Allstate Ins. Co., 996 P.2d 1216,
1222 (Alaska 2000).

     8    Id.

     9     Hahn  v. Alaska Title Guar. Co., 557 P.2d 143,  144-45
(Alaska  1976)  (construing definition  of  record  in  insurance
policy broadly in favor of insureds to include public land  order
filed with Federal Register).

     10     Govt Employees Ins. Co. v. Graham-Gonzalez, 107  P.3d
279,  284  (Alaska  2005)  (holding that statute  requiring  that
insurers  shall  offer  underinsured motorist  coverage  did  not
require that application forms also state amount of premium).

     11     Kenneth S. Abraham, Environmental Liability Insurance
Law 145 (1991).

     12     Donald  S.  Malecki & Arthur L.  Flitner,  Commercial
General  Liability 40 (7th ed. 2001).  Insurers began  issuing  a
standard comprehensive general liabilitypolicy in 1940.   9A  Lee
R.  Russ & Thomas F. Segalla, Couch on Insurance  129:1, at 129-5
(3d  ed.  2005).  In 1986 the standard policy became a commercial
general liability policy.  Id.

     13     Abraham,  supra  note  11, at  152-53;  see  Douglass
Farnsworth,  Moral  Hazard  in Health  Insurance:  Are  Consumer-
Directed  Plans the Answer?, 15 Annals Health L. 251, 253  (2006)
(Moral  hazard, simply put, is the tendency of an  individual  to
behave differently in regards to a particular event depending  on
the  presence of insurance.); Peter Siegelman, Adverse  Selection
in  Insurance Markets: An Exaggerated Threat, 113 Yale L.J. 1223,
1223  (2004) (The phrase adverse selection was originally  coined
by  insurers  to  describe the process by which insureds  utilize
private information of their own riskiness when deciding  to  buy
or forgo insurance.).

     14     See generally Sauer v. Home Indem. Co., 841 P.2d 176,
179 n.3 (Alaska 1992).

     15     Id. at 181-82 n.8 (declining to rule definitively  on
language   in   pollution  exclusion  but   noting   variety   of
interpretations  among  other  jurisdictions,  and  holding  that
discharge from sewage leak that occurred over several days  or  a
few  weeks  was  arguably sudden and accidental); Mapco  Express,
Inc.  v.  Am.  Intl  Speciality Lines Ins. Co.,  No.  3AN-95-8309
(Alaska  Super.  July  31,  1998)  (determining  that  sudden  is
ambiguous  and  must be construed in favor of policyholder);  see
also  Mapco  Alaska Petroleum, Inc. v. Cent.  Natl  Ins.  Co.  of
Omaha,  795  F. Supp. 941, 947 (D. Alaska 1991) (concluding  that
summary  judgment  was inappropriate because whether  groundwater
contamination  that  occurred  without  notice  was  sudden   and
accidental was question of fact).

     16    Abraham, supra note 11, at 160-61.

     17    Id. at 161.

     18    Id. (For example, certain kinds of liabilities clearly
are  not  mentioned within the exclusion.  Most  prominent  among
these  is liability for pollution caused by finished products  in
the  possession of others . . . .  In addition, the meaning of  a
number of terms in the exclusion is unclear.).

     19    As an initial matter, in all of its arguments Whittier
asserts  that  [b]ecause  there was at  least  a  possibility  of
insurance  coverage,  the  trial court should  have  agreed  with
Whittier  that  ANIC  was  estopped from asserting  any  coverage
defenses  when it refused to provide Whittier with  any  defense.
But  the possibility of coverage is irrelevant; the question here
turns  on  contract interpretation.  [A] duty to defend does  not
arise  whenever  an insurer and an insured have  a  dispute  over
coverage.   Makarka v. Great Am. Ins. Co., 14  P.3d  964,  969-70
(Alaska  2000) (stating that where coverage turns solely  on  the
interpretation of policy language that has never been reviewed by
this court, that fact alone is not enough to create a possibility
of coverage that required a defense).

     20     West  v. Umialik Ins. Co., 8 P.3d 1135, 1138  (Alaska
2000);  Starry v. Horace Mann Ins. Co., 649 P.2d 937, 939 (Alaska

     21    C.P. ex rel. M.L., 996 P.2d at 1222 n.38 (citing Modern
Constr.,  Inc.  v. Barce Inc., 556 P.2d 528, 529 (Alaska  1976));
accord  Jarvis  v.  Aetna Cas. & Sur. Co., 633  P.2d  1359,  1363
(Alaska 1981).

     22     Nelson  v. Progressive Cas. Ins. Co., 162 P.3d  1228,
1234 (Alaska 2007).

     23     To  the  extent  Whittier contends  or  seems  to  be
contending  that loss control reports requested and  obtained  by
ANIC  were  extrinsic  evidence bearing on whether  the  policies
exclusion was ambiguous or must, in any event, be interpreted  in
the  insureds favor, we address the loss control reports in  Part

     24    Am. States Ins. Co. v. Kiger, 662 N.E.2d 945, 948 (Ind.

     25    Id. at 949.

     26    Id.

     27     Hocker Oil Co. v. Barker-Phillips-Jackson, Inc.,  997
S.W.2d 510 (Mo. App. 1999).

     28    Id. at 518.

     29    As the Complex Insurance Claims Litigation Association
states  in  its  amicus curiae brief, [o]ver 100 appellate  court
cases  and  36 jurisdictions have ruled that pollution exclusions
like  the one at issue here unambiguously bar coverage for  harms
caused  by  exposure to many different types of pollutants.   See
Deni Assocs. of Fla. Inc. v. State Farm Fire & Cas. Ins. Co., 711
So.  2d  1135, 1137 n.2 (Fla. 1998) (noting 100 cases and thirty-
six  jurisdictions had held pollution exclusion  not  ambiguous);
Quadrant  Corp. v. Am. States Ins. Co., 110 P.3d 733, 738  (Wash.
2005)  (listing cases); see, e.g., Heyman Assocs. No. 1  v.  Ins.
Co.,  653  A.2d  122,  132-33  (Conn. 1995)  (absolute  pollution
exclusion  unambiguous  and spilled fuel is  pollutant);  Millers
Mut.  Ins. Assn v. Graham Oil Co., 668 N.E.2d 223, 229 (Ill. App.
1996)  (gasoline  that migrated from storage  tank  to  neighbors
subsoil is pollutant); Harrison v. R.R. Morrison & Son, Inc., 862
So.   2d   1065,  1072  (La.  App.  2003)  (pollution   exclusion
unambiguous and gasoline is pollutant).

     30    West, 8 P.3d at 1138.

     31    Nelson, 162 P.3d at 1235 (citing West, 8 P.3d at 1138).

     32     Id.  (holding that named driver exclusion  was  valid
exception to statutorily mandated liability coverage).

     33     Bering  Strait Sch. Dist. v. RLI Ins. Co.,  873  P.2d
1292,  1295  (Alaska 1994) (citing Robert Keeton, Basic  Text  on
Insurance Law  6.3(a), at 351 (1971)).

     34    Nelson, 162 P.3d at 1235 (quoting Williams v. Crawford,
982 P.2d 250, 253 (Alaska 1999)).

     35     See Harnischfeger Corp. v. Harbor Ins. Co., 927  F.2d
974, 976 (7th Cir. 1991):

          Drafters   cannot  anticipate  all   possible
          interactions of fact and text,  and  if  they
          could  the  attempt  to  cope  with  them  in
          advance  would  leave behind a contract  more
          like a federal procurement manual than like a
          traditional insurance policy.  Insureds would
          not  be made better off in the process.   The
          resulting   contract  would   be   not   only
          incomprehensible but also more expensive.
     36    See, e.g., Truitt Oil & Gas Co. v. Ranger Ins. Co., 498
S.E.2d  572,  574 (Ga. App. 1998) (noting that usual significance
of  words  used  in policy exclusion rendered it unnecessary  for
gasoline to be specifically listed as pollutant).

     37     See,  e.g.,  id.  at 574 (determining  that  although
gasoline was specifically referred to as insureds product,  court
was  not  required to conclude that leaked gasoline   was  not  a
pollutant); Crescent Oil Co. v. Federated Mut. Ins. Co., 888 P.2d
869,  872-73  (Kan. App. 1995) (mentioning that leaking  gasoline
was not insureds product).

     38     Morgan v. Fortis Benefits Ins. Co., 107 P.3d 267, 269
(Alaska 2005).

     39     See  Holland v. Union Oil Co., 993 P.2d 1026, 1031-32
(Alaska  1999)  (inference of just cause employment  relationship
not reasonable from one-page document merely addressing potential
behavior  problems because no reasonable juror  could  draw  that

     40    C.P. ex rel. M.L. v. Allstate Ins. Co., 996 P.2d 1216,
1223 (Alaska 2000).

     41     See  Peterson v. Wirum, 625 P.2d 866, 872-73  (Alaska
1981) (determining that Petersons conduct after loan fell through
including   agreeing  to  look  for  other  loan  providers   and
expressing interest in loaning money herself  demonstrated  that,
contrary  to  her  litigation position, Peterson understood  that
loan provision was not condition precedent); Australaska Corp. v.
Sisters  of  Charity of House of Providence, 397  P.2d  966,  968
(Alaska  1965) (interpreting warranty clause against  corporation
whose   president  expressed  during  deposition   interpretation
consistent  with  opposing  partys  interpretation).    But   see
Sprucewood  Inv. Corp. v. Alaska Hous. Fin. Corp., 33 P.3d  1156,
1163-64  (Alaska 2001) (determining that evidence  of  AHFCs  own
employees concessions that contract did not specify how buildings
were  to be demolished was insufficient to challenge trial  court
finding  that AHFC believed, at time of formation, that  contract
required  complete destruction of buildings rather  than  removal
and  sale  when  employees also testified that contract  required
buildings to be broken up).

     42    That exclusion states: This insurance does not apply to
. . . [b]odily injury or property damage for which the insured is
obligated to pay damages by reason of the assumption of liability
in a contract or agreement.

     43    An insured contract is defined in part as:

          That  part of any other contract or agreement
          pertaining  to  your business  (including  an
          indemnification   of   a   municipality    in
          connection   with   work  performed   for   a
          municipality) under which you assume the tort
          liability of another party to pay for  bodily
          injury  or property damage to a third  person
          or  organization.   Tort  liability  means  a
          liability that would be imposed by law in the
          absence of any contract or agreement.
     44    For example, the exclusion for Damage to Property under
Coverage  A states that Paragraph (6) of this exclusion does  not
apply  to  property  damage  included in  the  products-completed
operations hazard.

     45    See Capital Alliance Ins. Co. v. Cartwright, 512 S.E.2d
666,  668 (Ga. App. 1999) (in indemnification suit by third party
who contracted with insured so that insured would indemnify third
party,  court determined that injury arose from risk excluded  by
policy and thus was likewise excluded by policy).

     46     AS  21.36.235(a) requires that if after renewal there
will  be  a  material restriction or reduction  in  coverage  not
specifically  requested by the insured, written notice  shall  be
mailed  to  the insured and to the agent or broker of  record  as
required by AS 21.36.260 . . . at least 45 days before expiration
of  a  business  or commercial policy.  See also AS 21.36.235(b),
which requires that the existing policy shall continue until  the
insurer  provides notice for the time period required by  (a)  of
this section for that policy.

     47     See, e.g., U.S. Fid. & Guar. Co. v. Goodwin,  950  F.
Supp.  24,  27 (D. Me. 1996) (determining that, because  personal
injury  provision unambiguously requires that the wrongful  entry
be  committed  by  the owner, landlord, or lessor  of  the  room,
dwelling,  or  premises, insureds trespass on neighbors  property
when cutting trees was outside personal injury coverage).

     48    See, e.g., Lakeside Non-Ferrous Metals, Inc. v. Hanover
Ins.  Co.,  172  F.3d 702, 705-06 (9th Cir. 1999)  (stating  that
allowing  insured  to  recast  its claim  under  personal  injury
provision would render[] the pollution exclusion a dead appendage
to  the policy (quoting Titan Corp. v. Aetna Cas. & Sur. Co.,  27
Cal. Rptr. 2d 476, 486 (Cal. App. 1994))).

     49     Stillwater Condo. Assn v. Am. Home Assurance Co., 508
F.  Supp.  1075, 1079 (D. Mont. 1981); accord Weedo  v.  Stone-E-
Brick,  Inc., 405 A.2d 788, 795 (N.J. 1979) (If any one exclusion
applies  there  should be no coverage, regardless  of  inferences
that might be argued on the basis of exceptions or qualifications
contained in other exclusions.).

     50    Because we affirm the superior courts grant of summary
judgment  to  ANIC, we do not need to address Whittiers  argument
that  the  court erred in granting summary judgment  to  ANIC  on
Whittiers bad faith claim.

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