Commercial Kitchen Waste Is A Pollutant
The United States District Court for Colorado held that used cooking oil and other nontoxic restaurant wastes are “pollutants” under the pollution exclusion clause in a restaurant owner’s commercial general liability policy. Mountain States Mutual Casualty Co. v. Kirkpatrick, 2007 WL 2506640 (D. Colo. Aug. 30, 2007). The circumstances leading to this broad definition of “pollutant” began with two workers alleging that they were injured in October 2003 while cleaning sewers located near the Hog’s Breath Saloon & Restaurant in Otero County, Colorado. The workers claimed that Hog’s Breath discharged cooking oil, grease, fat and other food by-products directly into the sewer in violation of several city ordinances. The workers further claimed that nearly five feet of oil and grease had accumulated in the manhole closest to the Hog’s Breath sewer connection. The accumulation of oil and grease allegedly produced hydrogen sulfide gas that was trapped in the manhole and in air pockets within the grease. Both workers were overcome when sewer cleaning began. Both survived but then sued in state district court for among other things, negligence and negligence per se.
After service of the complaint, Hog’s Breath requested that its carrier, Mountain States Mutual Casualty Company, provide a defense and indemnification under its commercial general liability policy. Mountain States accepted the defense under a reservation of rights and filed this action seeking a declaration that the pollution exclusion clause in the policy precluded coverage. The policy defined “pollutant” 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 reused.
In Colorado, as Judge Walker D. Miller noted, an insurance company seeking to avoid a duty to defend has a “heavy burden.” Compass Ins. Co. v. City of Littleton, 984 P.2d 606,613 (Colo. 1999). The insurer must establish that “the exemption claimed applies in the particular case and that the exclusions are not subject to any other reasonable interpretation.” Hecla Mining Co. v. New Hampshire Ins. Co., 811 P.2d 1083, 1090 (Colo. 1991). For an insurer to prevail, there can be “no factual or legal basis on which the insurer might eventually be held liable to indemnify the insured.” Hecla, 811 P.2d at 1090.
For Judge Miller, the critical question was whether the kitchen waste in addition to being “waste” was a “contaminant or irritant.” Applying standard dictionary definitions of “contaminant” and “irritant,” Judge Miller concluded that under the plain meaning of those words and in the context of the facts and circumstances alleged in the underlying lawsuit by the two sewer cleaners, the kitchen waste was a “contaminant” and therefore a “pollutant” for purposes of the pollution exclusion clause. Therefore, Mountain States had no duty to defend or indemnify.
Hog’s Breath made a number of arguments that would have required Judge Miller to look beyond the four corners of the policy such as the reasonable expectation of a restaurant owner is that garbage and food by-products are not normally considered to be “contaminants” and the likelihood that there were many other sources of the hydrogen sulfide gas found in the sewer. Judge Miller concluded that such arguments could not be considered because the policy was unambiguous.
