Rice Painting Company, Inc. v. Depositors Insurance Company
MEMORANDUM AND ORDER. (See Full Order.) IT IS HEREBY ORDERED that the motion of plaintiff Rice Painting Company for summary judgment [Doc. # 37 ] is denied. IT IS FURTHER ORDERED that a separate judgment in favor of defendant Depositors Insurance Company will be entered. Signed by Magistrate Judge John M. Bodenhausen on 11/20/2017. (CBL)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
RICE PAINTING COMPANY, INC.,
DEPOSITORS INSURANCE COMPANY,
Civil No. 4:15 CV 1064 JMB
MEMORANDUM AND ORDER
This matter is before the Court on the motion of plaintiff Rice Painting Company for
summary judgment, pursuant to Rule 56, Fed.R.Civ.P. Defendant Depositors Insurance
Company has filed a response in opposition and the issues are fully briefed. All matters are
pending before the undersigned United States Magistrate Judge, with consent of the parties,
pursuant to 28 U.S.C. § 636(c).
The Raineri Contract
Plaintiff is a professional painting contractor. On June 10, 2013, Raineri Construction
(“Raineri”) hired plaintiff to provide painting and remediation work as a subcontractor on a St.
Louis Public Schools’ (“SLPS”) project at Roosevelt High School. Complaint at ¶ 5 [Doc. #7].
Raineri’s contract with SLPS provided that “all painted surfaces and buildings constructed prior
to 1980 should be assumed to contain lead within the paint,” and that “Raineri was to require
their tradesmen to conduct their business in accordance with OSHA . . . and USEPA’s
Renovation on Repair and Painting Rule (RRP).” Raineri Const. LLC v. Special Admin. Bd. of
the Trans. Dist. of the City of St. Louis, Mo. at al., Cause No. 1522-CC10210, First Am. Pet. at ¶
7 (“Raineri petition”). [Doc. # 38-8]. After plaintiff began work, SLPS’s environmental
consultant conducted a site inspection for lead dust at Roosevelt High School. Following this
inspection, the consultant issued a report that recommended cleaning the areas that failed the
“lead dust clearance testing.” Id. at ¶ 22.
SLPS undertook cleanup operations between June 29, 2013, and September 20, 2013. Id.
at ¶ 23. SLPS incurred substantial costs remedying the lead contamination and refused to pay
Raineri for its services until it was reimbursed for these costs. See id. at ¶¶ 25-26. Raineri filed
suit against SLPS to recover the remainder of its fees for the Roosevelt project. Raineri also
named plaintiff as a defendant to the suit on the theory that plaintiff should be responsible for the
damages if the court found SLPS was not required to pay Raineri the remainder of its fees.1 Id.
at ¶ 27. Raineri alleges in the underlying action that plaintiff failed to properly scrape and
remove the existing paint, secure the work site to prevent the spread of lead contaminants to
other areas, follow required environmental precautions, require its employees to wear protective
equipment, and use proper controls to minimize reintroducing lead into the air. Id. at ¶ 58.
Plaintiff claims it has incurred significant expense to defend itself in the Raineri proceeding.
Statement of Uncontroverted Material Facts (“SUMF”) at ¶ 15 [Doc. # 38].
The Depositors Insurance Company Policy
Prior to the SLPS project, plaintiff purchased from defendant a policy of commercial
general liability insurance coverage (the “Policy”) with a limited pollution coverage endorsement
(the “Pollution Endorsement”) for the policy period of June 28, 2012 to June 28, 2013. [Doc. #
38-1]. After Raineri made demand on plaintiff for indemnification [Doc. # 38-5], plaintiff made
a written demand upon defendant to provide a defense and indemnification against SLPL’s
claims, pursuant to the Pollution Endorsement. SUMF at ¶ 12. In response, defendant
Also named as a defendant was Huddy Painting, LLC, with whom Raineri contracted to provide similar
services at Sumner High School, where lead contamination was also found.
determined that the claim was not covered by the Policy and notified plaintiff that it was denying
the claim. Denial letter [Doc. # 38-7]. Plaintiff filed this declaratory judgment action, 2 seeking a
declaration that defendant is obligated to provide a defense in the Raineri action.
As relevant to this dispute, the Policy includes a “Commercial General Liability
Coverage Form” ( the “Coverage Form”), which sets out the basic insuring agreement; an
endorsement entitled “Limited Pollution Coverage — Job Sites” (the “Pollution Endorsement”);
and an endorsement entitled “Exclusion — Asbestos, Electro-Magnetic Radiation, Lead and
Radon” (the “Lead Exclusion”).
The introductory paragraph of the Coverage Form states that “[v]arious provisions in this
policy restrict coverage” and the insured should “read the entire Policy carefully to determine
rights, duties and what is and is not covered.” Policy at p. 22 [Doc. # 38-1]. Section 1 of the
Coverage Form states that defendant “will pay those sums that the insured becomes legally
obligated to pay as damages because of property damage to which the insurance applies.” Id.
The Coverage Form also states that defendant has the duty to defend the insured against any suit
seeking those damages. Id. However, this duty to defend does not extend to an action against
the insured for damages to property or bodily injury to which the insurance does not apply. Id.
The Pollution Endorsement provides additional coverage beyond what appears in the
Coverage Form and provides in relevant part: “We will pay those sums that the insured becomes
legally obligated to pay . . . [a]s clean-up costs because of ‘environmental damage’ which
directly results from physical injury to tangible property . . . to which this insurance applies. We
will have the right and duty to defend any ‘suit’ seeking these damages. We may at our
Plaintiff filed suit in the Circuit Court for the Twenty-First Judicial Circuit (St. Louis County).
Defendant timely removed the matter to this Court, invoking diversity jurisdiction under 28 U.S.C. §
1332. The Court rejected plaintiff’s argument that the Court should abstain from exercising jurisdiction
and remand the matter to State court. [Doc. # 18].
discretion investigate any ‘pollution incident’ and settle any claim or ‘suit’ that may result.”
Pollution Endorsement, Section A.1, Id. at p. 55. Plaintiff argues it is entitled to a defense under
this provision. Complaint at ¶ 14 [Doc. # 7].
The pollution insurance applies to environmental damage only if:
The . . . “environmental damage” arises out of a “pollution incident”:
on or from “your job site” in the “coverage territory”;
that is demonstrable as beginning and ending within 72 hours of the
“pollution incident”; and
that is accidental.
Pollution Endorsement, Section A.1.b(1) [Doc. # 38-1 at 55].
“Pollution incident” is defined as “the actual or alleged emission, discharge, release or
escape of ‘pollutants’ from your ‘job site’ provided that such emission, discharge, release, or
escape results in ‘environmental damage.’” Pollution Endorsement, Section E [Doc. # 38-1 at
The Pollution Endorsement also sets forth several exclusions that further limit the
availability of coverage. As relevant here, coverage is excluded for a “pollution incident” that is
“directly or indirectly attributable to [an insured’s] failure to comply with any applicable statute,
regulation, ordinance, directive or order relating to protection of the environment.” Pollution
Endorsement, Section A.2.k, Id. at 56. Coverage is also excluded where “the pollutants are not
brought on or to ‘your work site’ by [the] insured.” Pollution Endorsement, Section A.2.q, Id. at
Standard of Review
Summary judgment is appropriate where “there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Under
Rule 56, a party moving for summary judgment bears the burden of demonstrating that no
genuine issue exists as to any material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986). A dispute is genuine “if the evidence is such that a reasonable jury could return a verdict
for the nonmoving party,” and a fact is material if it “might affect the outcome of the suit under
the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Once the
moving party discharges this burden, the non-moving party must set forth specific facts
demonstrating that there is a dispute as to a genuine issue of material fact, not the “mere
existence of some alleged factual dispute.” Id. at 247. The non-moving party may not rest upon
mere allegations or denials in the pleadings. Id. at 256. “Factual disputes that are irrelevant or
unnecessary” will not preclude summary judgment. Id. at 248. In ruling on a motion for
summary judgment, the court must construe all facts and evidence in the light most favorable to
the non-movant, must refrain from making credibility determinations and weighing the evidence,
and must draw all legitimate inferences in favor of the non-movant. Id. at 255.
Federal jurisdiction in this case is based upon diversity of citizenship. 28 U.S.C. §
1332(a). In a diversity action such as this, “[s]tate law governs the interpretation of insurance
policies.” Secura Ins. v. Horizon Plumbing, Inc., 670 F.3d 857, 861 (8th Cir. 2012). Thus,
Missouri law will be applied to resolve this dispute. See Hartford Underwriter’s Ins. Co. v.
Estate of Turks, 206 F. Supp. 2d 968, 974 (E.D. Mo. 2002) (Missouri law applied to resolve
insurance dispute where parties did not argue otherwise).
“The interpretation of an insurance policy is a question of law.” McCormack Baron
Mgmt. Servs. v. Am. Guar. & Liab. Ins. Co., 989 S.W.2d 168, 171 (Mo. 1999) (en banc) “The
cardinal rule in the interpretation of a contract is to ascertain the intention of the parties and to
give effect to that intention.” J.E. Hathman, Inc. v. Sigma Alpha Epsilon Club, 491 S.W.2d 261,
264 (Mo. 1973) (en banc). “The intention of the parties ‘is presumptively expressed by the plain
and ordinary meaning’ of the policy’s provisions . . . which are read ‘in the context of the policy
as a whole.’” Interstate Bakeries Corp. v. OneBeacon Ins. Co., 686 F.3d 539, 543 (8th Cir.
Standard for Duty to Defend
An analysis of an insurer’s duty to defend must begin with the plaintiff’s petition and the
insurance policy. Standard Artificial Limb, Inc. v. Allianz Ins. Co., 895 S.W.2d 205, 210 (Mo.
Ct. App. 1995) (“The duty of a liability insurer to defend pursuant to its policy is determined by
comparing the language of the insurance contract and the allegations of the petition in the action
brought by the person injured or damaged.”). “The obligation of the insurer to defend arises only
as to claims and suits for damages covered by the terms of the policy.” Benningfield v. Avemco
Ins. Co., 561 S.W.2d 736, 737 (Mo. Ct. App. 1978). “The plaintiff is the master of the [petition],
and if [he or she] does not seek covered damages, there is no duty to defend.” Trainwreck West
Inc. v. Burlington Ins. Co., 235 S.W.3d 33, 41-42 (Mo. Ct. App. 2007) (citing William T.
Barker, “When Can Extrinsic Evidence Defeat the Duty to Defend?” in New Appleman on
Insurance: Current Critical Issues in Insurance Laws III.C (April 2007) (alterations in original)).
“The insurer owes no duty of defense where . . . the allegations of the claimant’s petition
and the insurance contract demonstrate that coverage does not apply.” Benningfield, 561 S.W.2d
at 737; see also Custom Hardware Eng’g & Consulting, Inc. v. Assurance Co. of Am., 295
S.W.3d 557, 561 (Mo. Ct. App. 2009) (“To extricate itself from a duty to defend a suit against
the insured, the insurer must demonstrate that there is no possibility of coverage.”). Rather, an
insurer only owes the insured a duty to defend “[i]f the complaint alleges facts which state a
claim potentially or arguably within the policy’s coverage.” Superior Equipment Co., Inc. v.
Maryland Cas. Co., 986 S.W.2d 477, 481 (Mo. Ct. App. 1998); see also McCormack Baron
Mgmt. Servs., 989 S.W.2d at 170-71 (“If the complaint merely alleges facts that give rise to a
claim potentially within the policy’s coverage, the insurer has a duty to defend.”). The insured
has the burden under Missouri law of proving this possibility of coverage, and the insurance
company has the burden of proving an exclusion to coverage. Truck Ins. Exch. v. Prairie
Framing, LLC, 162 S.W.3d 64, 80 (Mo. Ct. App. 2005).
The Pollution Endorsement
Plaintiff asserts that defendant has a duty to defend against Raineri and SLPS’s claims
arising from the Pollution Endorsement’s “environmental damage” coverage. The Pollution
Endorsement specifically identifies two prerequisites to coverage: First, the environmental
damage must begin and end within 72 hours of the “pollution incident” — in this case, the
release of lead dust into Roosevelt High School. According to allegations in the Raineri petition,
the cleanup of the lead dust occurred between July 29, 2013, and September 20, 2013, and cost
nearly $250,000. Raineri petition at ¶¶ 23, 25. Thus, the damage did not begin and end within
72 hours of the release of the lead dust.
In addition, the pollution incident must be “accidental.” Pollution Endorsement, Section
A.1.b(1). The term “accident” as used in a commercial general liability policy is defined by its
common meaning: “An event that takes place without one’s foresight or expectation; an
undesigned, sudden and unexpected event.” Hawkeye-Sec. Ins. Co. v. Davis, 6 S.W.3d 419, 425
(Mo. Ct. App. 1999) (quoting American States Ins. Co. v. Mathis, 974 S.W.2d 647, 650 (Mo. Ct.
App. 1998) (internal quotations omitted)). The facts underlying this case are distinguishable
from the facts of Superior Equipment Co. v. Maryland Casualty Co., cited by plaintiff in support
of its claim. In Superior, the insured sought a defense in a claim arising from chemical releases
“includ[ing] but . . . not limited to spills from bulk tanks, leaking drums and tanks, and
explosions and resultant leaking from tanks.” Superior, 986 S.W.2d at 480. The insurance
policies at issue excluded from coverage property damage arising from the dispersal or escape of
pollutants, except if “such discharge, dispersal, release or escape is sudden and accidental.” Id.,
986 S.W.2d at 481. The appellate court concluded that the “allegation of explosions and
resultant leaking arguably falls within the ‘sudden and accidental’ release required by the
policies,” and thus stated a claim potentially within the policies’ coverage. Id. at 482. By
contrast, the lead incident in this case cannot “arguably fall” within the plain meaning of an
accident: Raineri’s petition alleges that plaintiff failed to follow safety procedures under the
terms of their agreement and failed to properly remove paint in violation of the OHSA and
USEPA’s Renovation on Repair and Painting Rule. This deviation from the required safety
procedures allowed lead contaminants to be released and spread throughout the Roosevelt High
School project site. Damage from the arguably negligent failure to follow safety procedures is
vastly different from the explosions and leakage alleged in Superior.
Even if the pollution incident here met the temporal and accidental requirements,
coverage is excluded under Sections A.2.k and A.2.q because the pollution incident was created
by plaintiff’s alleged failure to comply with environmental protection regulations and the
pollutant — the lead paint —was not brought to the job site by plaintiff.
“Although Missouri law favors insured parties by determining an insurer’s duty to defend
based on whether certain facts ‘give rise to a claim potentially within the policy’s coverage,’. . .
use of the word ‘potentially’ does not render boundless the duty to defend.” Interstate, 686 F.3d
at 544 (quoting McCormack, 989 S.W.2d at 170 (emphasis in original)). Defendant’s duty to
defend does not arise under the circumstances of this case.
Plaintiff argues that, if the Court finds that the Policy does not provide coverage, the
matter should nevertheless be resolved in its favor because the Policy language is ambiguous.
Plaintiff contends that the Policy provides coverage in the Pollution Endorsement, but then
“takes it away” in an additional endorsement entitled “Exclusion-Asbestos, Electro-Magnetic
Radiation, Lead and Radon” (the “Lead Exclusion”).3 [Doc. # 38-1 at p. 53]. The Court finds
plaintiff’s arguments unpersuasive, and holds that the Policy is not ambiguous.
When interpreting an insurance policy, a court must “give terms their plain and ordinary
meaning unless it is clear from the policy that the parties intended an alternate meaning.” Gavan
v. Bituminous Cas. Corp., 242 S.W.3d 718, 720 (Mo. 2008) (en banc). “If the policy language is
unambiguous, it must be enforced as written.” Dibben v. Shelter Ins. Co., 261 S.W.3d 553, 556
(Mo. Ct. App. 2008). However, “if the language is ambiguous, courts should construe the policy
in favor of the insured.” Id. The mere “fact that parties disagree over the policy’s interpretation
does not render a term ambiguous.” O’Rourke v. Esurance Ins. Co., 325 S.W.3d 395, 398 (Mo.
Ct. App. 2010). Rather, “ambiguity exists where there is duplicity, indistinctness, or uncertainty
in the meaning of the language in the policy. Language is ambiguous if it is reasonably open to
different interpretations.” Seeck v. Geico General Ins. Co., 212 S.W.3d 129, 132 (Mo. 2007) (en
banc). “A court is not permitted to create an ambiguity in order to distort the language of an
unambiguous policy, or, in order to enforce a particular construction which it might feel is more
The Lead Exclusion modifies the commercial liability coverage and the Pollution Endorsement by
excluding from coverage “any claims arising out of or alleged to have arisen out of …any act, error,
omission, failure to work, or other duty involving lead or lead products, their use, exposure, existence,
detection, removal, elimination, or avoidance.”
appropriate.” Doe Run Res. Corp. v. Am. Guarantee & Liab. Ins., No. SC 96107, 2017 WL
5078078, at *3 (Mo. Oct. 31, 2017) (quoting Rodriguez v. Gen. Accident Ins. Co. of Am., 808
S.W.2d 379, 382 (Mo. 1991) (en banc)).
As plaintiff contends, “it is well-settled that where one section of an insurance contract
promises coverage and another takes it away the contract is ambiguous.” Jones v. Mid-Century
Ins. Co., 287 S.W.3d 687, 692 (Mo. 2009) (en banc). However, “courts may not unreasonably
distort the language of a policy or exercise inventive powers for the purpose of creating an
ambiguity where none exists.” Todd v. Mo. United Sch. Ins. Council, 223 S.W.3d 156, 163
(Mo. 2007) (en banc). “Conflicting clauses in a policy should be reconciled so far as their
language reasonably permits; when reconciliation fails, however, inconsistent provisions will be
construed in favor of the insured.” Jones, 287 S.W.3d at 692.
While the Pollution Endorsement provides coverage for environmental pollution under
certain circumstances, that coverage is in fact “limited” and is subject to exclusions which apply
here. As discussed above, no coverage is available under the Pollution Endorsement for the lead
incident. Thus, plaintiff is incorrect in its assertion that there was coverage “given” by the
Pollution Endorsement that was then “taken away” by the Lead Exclusion.
In conclusion, the Court finds that plaintiff has not met its burden to prove that coverage
is available under the Pollution Endorsement and defendant has met its burden to show that
exclusions within the Policy and Pollution Endorsement do apply. Furthermore, plaintiff has
failed to show that the policy is ambiguous. Thus, defendant has no duty to defend plaintiff in
the Rainieri suit and plaintiff’s motion for summary judgment must be denied. The Court will
enter judgment in favor of defendant. See Glob. Petromarine v. G.T. Sales & Mfg., Inc., 577
F.3d 839, 844 (8th Cir. 2009) (“[A] determination of summary judgment sua sponte in favor of
the prevailing party is appropriate so long as the losing party has notice and an opportunity to
IT IS HEREBY ORDERED that the motion of plaintiff Rice Painting Company for
summary judgment [Doc. # 37] is denied.
IT IS FURTHER ORDERED that a separate judgment in favor of defendant Depositors
Insurance Company will be entered.
/s/ John M. Bodenhausen
JOHN M. BODENHAUSEN
UNITED STATES MAGISTRATE JUDGE
Dated this 20th day of November, 2017.
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