{ "id": 411728, "name": "MOON KIM et al., d/b/a Oriental Cleaning Company, Plaintiffs-Appellants, v. STATE FARM FIRE AND CASUALTY COMPANY et al., Defendants-Appellees", "name_abbreviation": "Kim v. State Farm Fire & Casualty Co.", "decision_date": "2000-03-24", "docket_number": "No. 1 \u2014 98 \u2014 3741", "first_page": "770", "last_page": "778", "citations": [ { "type": "official", "cite": "312 Ill. App. 3d 770" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "186 Ill. 2d 367", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 243901 ], "year": 1999, "pin_cites": [ { "page": "371" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/186/0367-01" ] }, { "cite": "154 Ill. 2d 90", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 4820940 ], "weight": 2, "year": 1992, "pin_cites": [ { "page": "125" }, { "page": "125" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/154/0090-01" ] }, { "cite": "275 Ill. App. 3d 866", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 906768 ], "weight": 5, "year": 1995, "pin_cites": [ { "page": "868" }, { "page": "868" }, { "page": "869-72" }, { "page": "873" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/275/0866-01" ] }, { "cite": "292 Ill. App. 3d 471", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 1725110 ], "weight": 5, "year": 1997, "pin_cites": [ { "page": "472" }, { "page": "476" }, { "page": "476" }, { "page": "476" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/292/0471-01" ] }, { "cite": "409 S.E.2d 692", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 10, "year": 1991, "pin_cites": [ { "page": "700" }, { "page": "700" }, { "page": "693" }, { "page": "693" }, { "page": "698" }, { "page": "698" }, { "page": "698" }, { "page": "697" }, { "page": "697-98" } ], "opinion_index": 0 }, { "cite": "104 N.C. App. 312", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8521555 ], "weight": 10, "year": 1991, "pin_cites": [ { "page": "325" }, { "page": "325" }, { "page": "314" }, { "page": "314" }, { "page": "322" }, { "page": "322" }, { "page": "322" }, { "page": "317" }, { "page": "318" } ], "opinion_index": 0, "case_paths": [ "/nc-app/104/0312-01" ] }, { "cite": "976 F.2d 1037", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 11291771 ], "weight": 2, "year": 1992, "pin_cites": [ { "page": "1043" }, { "page": "1043" } ], "opinion_index": 0, "case_paths": [ "/f2d/976/1037-01" ] }, { "cite": "987 F.2d 1516", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 10518449 ], "year": 1993, "opinion_index": 0, "case_paths": [ "/f2d/987/1516-01" ] }, { "cite": "768 F. Supp. 1463", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 11350499 ], "year": 1991, "pin_cites": [ { "page": "1470" } ], "opinion_index": 0, "case_paths": [ "/f-supp/768/1463-01" ] }, { "cite": "177 Ill. 2d 473", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 317117 ], "weight": 16, "year": 1997, "pin_cites": [ { "page": "479-80" }, { "page": "476" }, { "page": "476-77" }, { "page": "487" }, { "page": "484" }, { "page": "484" }, { "page": "488" }, { "page": "489-92" }, { "page": "491" }, { "page": "493-94" }, { "page": "493-94" }, { "page": "494" }, { "page": "494" }, { "page": "493" }, { "page": "488-94" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/177/0473-01" ] }, { "cite": "186 Ill. 2d 127", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 243917 ], "weight": 2, "year": 1999, "pin_cites": [ { "page": "138" }, { "page": "138" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/186/0127-01" ] }, { "cite": "288 Ill. App. 3d 926", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 1597018 ], "weight": 2, "year": 1997, "pin_cites": [ { "page": "934" }, { "page": "934" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/288/0926-01" ] } ], "analysis": { "cardinality": 767, "char_count": 19806, "ocr_confidence": 0.772, "pagerank": { "raw": 1.804814797619542e-07, "percentile": 0.716932531587749 }, "sha256": "dcf3d99485f2aebf01e52878594fe16d9c2ce61ee76557cacbc8d1d16456ac5f", "simhash": "1:9b66c57ee2c1d437", "word_count": 3097 }, "last_updated": "2023-07-14T15:51:04.567640+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "MOON KIM et al., d/b/a Oriental Cleaning Company, Plaintiffs-Appellants, v. STATE FARM FIRE AND CASUALTY COMPANY et al., Defendants-Appellees." ], "opinions": [ { "text": "JUSTICE O\u2019BRIEN\ndelivered the opinion of the court:\nPlaintiff, Oriental Cleaning Company (the cleaning company), sought a declaratory judgment that an insurance policy issued to it by defendant State Farm Insurance Companies (State Farm) covered losses incurred when one of the cleaning company\u2019s dry cleaning machines released a chemical, tetrachloroethane (perc), into the environment. The circuit court granted State Farm\u2019s motion for judgment on the pleadings, finding there was no coverage under the policy. The cleaning company appeals.\nOn appeal, the cleaning company contends : (1) the circuit court erred in finding that the absolute pollution exclusions preclude coverage; and (2) the insurer breached its duty to defend and is estopped from raising the exclusions as defenses to coverage. We affirm.\nThe cleaning company leases property at 1730 West Fullerton Avenue, where it operates a dry cleaning and laundry store. One of the cleaning company\u2019s dry cleaning machines malfunctioned, releasing perc onto the floor and into the soil underneath the property. Later, the cleaning company was sued twice by the managing agent for the property\u2019s owner, Centrum Properties, Inc. (Centrum). The first lawsuit alleged the cleaning company had breached its lease by permitting perc to be released; the second lawsuit sought^ injunctive relief and damages, including the cost of removing the perc.\nThe cleaning company notified State Farm of the lawsuits and then settled the lawsuits, agreeing to take responsibility for 75% of the remediation costs. State Farm subsequently denied coverage for the settlement.\nThe cleaning company then filed a declaratory judgment action seeking a declaration that State Farm breached its duty to defend and indemnify. The circuit court granted judgment on the pleadings for State Farm, finding there was no coverage under the policy\u2019s pollution exclusions. The cleaning company appeals.\nOur review of the circuit court\u2019s order granting State Farm\u2019s motion for judgment on the pleadings is de novo. Chicago Title & Trust Co. v. Steinitz, 288 Ill. App. 3d 926, 934 (1997). A motion for judgment on the pleadings is akin to a motion for summary judgment limited to the pleadings. Employers Insurance v. Ehlco Liquidating Trust, 186 Ill. 2d 127, 138 (1999). On review, we examine the pleadings to determine whether any genuine issue of material fact exists and, if not, whether the prevailing party was entitled to judgment as a matter of law. Ehlco, 186 Ill. 2d at 138; Steinitz, 288 Ill. App. 3d at 934. In determining whether judgment on the pleadings for State Farm is proper, we construe the insurance policy at issue. Our construction of the insurance policy is also de novo. American States Insurance Co. v. Koloms, 177 Ill. 2d 473, 479-80 (1997).\nFirst, the cleaning company argues for coverage under the policy\u2019s \u201cBusiness Liability\u201d section. Second, the cleaning company argues for coverage under the policy\u2019s \u201cProperty Damage Legal Liability\u201d section. Third, the cleaning company argues that State Farm breached its duty to defend and is estopped from raising policy defenses.\nI. The Business Liability Section\nThe Business Liability section states in relevant part:\n\u201cWe will pay those sums that the insured becomes legally obligated to pay as damages because of *** property damage ***.\u201d\nThe cleaning company contends that the discharge of the perc into the land beneath its dry cleaning and laundry store constituted covered \u201cproperty damage.\u201d However, the Business Liability coverage grant is subject to the so-called \u201cabsolute pollution exclusion.\u201d The absolute pollution exclusion states that the insurance does not apply to any:\n\u201ca. property damage *** arising out of the actual, alleged or threatened discharge, seepage, migration, dispersal, spill, release or escape of pollutants:\n. * *\nb. loss, cost or expense arising out of any:\n(1) request, demand or order that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize or in any way respond to or assess the effects of pollutants.\u201d\nThe policy defines \u201cpollutants\u201d as:\n\u201c[A]ny 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.\u201d (Emphasis added.)\nPerc is a chemical and, as such, it falls within the absolute pollution exclusion\u2019s definition of a pollutant excluded from coverage.\nHowever, the cleaning company argues that a recent Illinois Supreme Court case, American States Insurance Co. v. Koloms, 177 Ill. 2d 473 (1997), compels a different result. In Koloms, the insured sought coverage for injuries caused by carbon monoxide fumes emitted from a building\u2019s faulty furnace. Koloms, 177 Ill. 2d at 476. The insurer argued that the carbon monoxide fumes were a pollutant and, thus, excluded from coverage under the absolute pollution exclusion in the policy. Koloms, 177 Ill. 2d at 476-77. The absolute pollution exclusion in Koloms, like the exclusion at issue here, stated it eliminated coverage for property damage arising out of \u201c \u2018actual, alleged or threatened discharge, dispersal, release or escape of *** any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.\u2019 \u201d Koloms, 177 Ill. 2d at 487.\nThe supreme court noted several recent opinions criticizing the absolute pollution exclusions\u2019s broad definition of a pollutant as an \u201cirritant\u201d or \u201ccontaminant.\u201d Koloms, 177 Ill. 2d at 484. The court cited the federal district court\u2019s opinion in Westchester Fire Insurance Co. v. City of Pittsburgh, 768 F. Supp. 1463, 1470 (D. Kan. 1991), aff'd, 987 F.2d 1516 (10th Cir. 1993), which criticized the exclusion\u2019s seemingly unlimited reach and noted that \u201cthere is virtually no substance or chemical in existence that would not irritate or damage some person or property.\u201d Koloms, 177 Ill. 2d at 484.\nThe supreme court also cited the Seventh Circuit Court of Appeals\u2019 decision in Pipefitters Welfare Education Fund v. Westchester Fire Insurance Co., 976 F.2d 1037, 1043 (7th Cir. 1992). There, the appeals court noted:\n\u201cWithout some limiting principle, the pollution exclusion clause would extend far beyond its intended scope and lead to some absurd results. To take but two simple examples, reading the clause broadly would bar coverage for bodily injuries suffered by one who slips and falls on the spilled contents of a bottle of Drano, and for bodily injury caused by an allergic reaction to chlorine in a public pool. Although Drano and chlorine are both irritants or contaminants that cause, under certain conditions, bodily injury or property damage, one would not ordinarily characterize these events as pollution.\u201d Pipefitters, 976 F.2d at 1043.\nThe supreme court agreed with the federal courts\u2019 criticism of the exclusion and stated that it was \u201ctroubled\u201d by the \u201coverbreadth\u201d in the language of the exclusion. Koloms, 177 Ill. 2d at 488. Then, it summarized the events leading to the insurance industry\u2019s adoption of the absolute pollution exclusion and concluded that the \u201cpredominate motivation\u201d in drafting the exclusion was to avoid the expense and exposure resulting from environmental litigation. Koloms, 177 Ill. 2d at 489-92. To that end, the exclusion originally stated that it eliminated coverage for property damage \u201c \u2018into or upon land, the atmosphere or any watercourse or body of water.\u2019 \u201d Koloms, 177 Ill. 2d at 491. The requirement that the pollution be discharged \u201c \u2018into or upon land, the atmosphere or any watercourse or body of water\u2019 \u201d was .later deleted, but the supreme court determined that the omission of the phrase only removed a \u201credundancy\u201d in the language of the exclusion. Koloms, 177 Ill. 2d at 493-94, citing West.American Insurance Co. v. Tufco Flooring East, Inc., 104 N.C. App. 312, 325, 409 S.E.2d 692, 700 (1991). Of importance, the supreme court noted that the exclusion continued to employ the words \u201cdischarge,\u201d \u201cdispersal,\u201d \u201crelease,\u201d and \u201cescape,\u201d which are terms of art used in environmental law to indicate the release of hazardous material into the environment. Koloms, 177 Ill. 2d at 493-94, citing West American Insurance Co. v. Tufco Flooring East, Inc., 104 N.C. App. at 325, 409 S.E.2d at 700.\nFinally, the supreme court held that \u201c[gjiven the historical background of the absolute pollution exclusion and the drafters\u2019 continued use of environmental terms of art, we hold that the exclusion applies only to those injuries caused by traditional environmental pollution\u201d (Koloms, 177 Ill. 2d at 494), i.e., hazardous material discharged into the land, atmosphere, or any watercourse or body of water. The court held that the release of carbon monoxide inside a commercial building did not constitute traditional environmental pollution. Koloms, 177 Ill. 2d at 494.\nHere, the parties agree that perc is a chemical and a hazardous material. Here, the hazardous material was not confined within the cleaning company\u2019s building, unlike Koloms, but was discharged into the soil underneath its dry cleaning and laundry store. The cleaning company\u2019s discharge of a hazardous material into the soil meets the definition of traditional environmental pollution. Thus, the cleaning company\u2019s resulting injuries, specifically, the remediation costs, the removal and replacement of the dry cleaning equipment, the replacement of the store\u2019s floor and floor liner, and lost profits, are excluded from coverage under the absolute pollution exclusion.\nThe cleaning company argues that the absolute pollution exclusion is inapplicable here because this case does not involve the slow and gradual discharge of hazardous substances into the environment. In effect, the cleaning company is arguing that the absolute pollution exclusion is inapplicable where the pollution is \u201csudden and accidental.\u201d We disagree. As noted by Koloms, the 1986 amendment to the exclusion removed the exception for the \u201csudden and accidental\u201d release of pollution. See Koloms, 177 Ill. 2d at 493.\nThe cleaning company argues that the absolute pollution exclusion does not apply because the perc was a legally used product intentionally brought to the dry cleaning store by the cleaning company. In support, the cleaning company cites Insurance Co. v. Stringfield, 292 Ill. App. 3d 471 (1997), and West American Insurance Co. v. Tufco Flooring East, Inc., 104 N.C. App. 312, 409 S.E.2d 692 (1991).\nIn Stringfield, this court considered whether the absolute pollution exclusion precluded coverage for injuries arising out of a minor\u2019s ingestion of lead paint and plaster chips inside his family\u2019s apartment. Stringfield, 292 Ill. App. 3d at 472. The court noted that the lead did not pollute the paint; rather, it was purposefully incorporated into the paint from the start, and the paint was intentionally applied to the premises and was legal. Stringfield, 292 Ill. App. 3d at 476. The court held that \u201c[a] common understanding of a pollutant is a substance that \u2018pollutes\u2019 or renders impure a previously unpolluted object, as when chemical wastes leach into a clean water supply\u201d (Stringfield, 292 Ill. App. 3d at 476), and, thus, the absolute pollution exclusion did not apply to preclude coverage for personal injuries arising out of a minor\u2019s ingestion of lead. Stringfield, 292 Ill. App. 3d at 476.\nIn Tufco, the insured performed floor resurfacing in a Perdue chicken processing facility. Tufco, 104 N.C. App. at 314, 409 S.E.2d at 693. Perdue subsequently brought a claim against the insured, alleging that during the floor resurfacing work, styrene fumes or vapors were released from the flooring material, contaminating chicken products being stored by Perdue in an adjacent cooler. Tufco, 104 N.C. App. at 314, 409 S.E.2d at 693. On appeal, the court considered whether the absolute pollution exclusion precluded coverage for Perdue\u2019s claims against the insured. The court noted that the insured did not bring the vapors or fumes into the Perdue processing facility. Tufco, 104 N.C. App. at 322, 409 S.E.2d at 698. Rather, the insured brought an unadulterated, pure raw material into the facility that was used for the normal business activity of resurfacing floors. Tufco, 104 N.C. App. at 322, 409 S.E.2d at 698.\nThe Tufco court held that the absolute pollution exclusion refers to unwanted waste material, not \u201craw material brought upon the premises by the insured for the purpose of normal business activity which accidentally resulted in property damage\u201d (Tufco, 104 N.C. App. at 322, 409 S.E.2d at 698), that the insured was in the business of installing industrial flooring, that it purchased its commercial liability policy to protect it from liability from the very type of activity at issue, and that its work was no secret to the insurance company. Tufco, 104 N.C. App. at 317, 409 S.E.2d at 697. The Tufco court held that to allow the insurer to deny coverage for claims arising out of the insured\u2019s central business activity would render the policy useless to the insured, and, thus, the absolute pollution exclusion did not apply to bar coverage. Tufco, 104 N.C. App. at 318, 409 S.E.2d at 697-98.\nHere, the cleaning company argues that the perc was legally and intentionally placed in the dry cleaning machine as part of the cleaning company\u2019s normal business activity and was not a waste product. Further, the cleaning company argues that it purchased its commercial liability policy to protect it from liability from the very type of activity at issue here. Therefore, the cleaning company argues that, like String-field and Tufco, the absolute pollution exclusion does not apply to bar coverage.\nWe disagree. String-field and Tufco were decided prior to the supreme court opinion in Koloms. As discussed, Koloms held that the absolute pollution exclusion applied to bar coverage for injuries caused by \u201ctraditional environmental pollution,\u201d that is, hazardous material discharged into the land, atmosphere, or any watercourse or body of water. Koloms, 177 Ill. 2d at 488-94. Here, the perc was hazardous material discharged into the land underneath the dry cleaning and laundry store. Therefore, the absolute pollution exclusion applies to bar coverage, regardless of whether the perc was a waste product or whether it was legally and intentionally placed in the dry cleaning machine as part of the cleaning company\u2019s normal business activity. The absolute pollution exclusion, as construed by the supreme court in Koloms, also applies regardless of whether the cleaning company thought the policy would protect it from the type of activity at issue here.\nThe cleaning company next argues that the cause of the perc\u2019s release is \u201ccritical\u201d to determining whether the claim is excluded under the absolute pollution exclusion. The cleaning company contends that since the release of the perc was caused by a faulty dry cleaning machine, the absolute pollution exclusion does not apply to bar coverage. In support, the cleaning company cites Economy Preferred Insurance Co. v. Grandadam, 275 Ill. App. 3d 866 (1995). In Grandadam, the insured sought coverage for damage and injuries caused when the insured\u2019s minor son spilled a container of mercury in a neighbor\u2019s home. Grandadam, 275 Ill. App. 3d at 868. The parties agreed that the mercury was a pollutant (Grandadam, 275 Ill. App. 3d at 868), and the appellate court held that the absolute pollution exclusion applied to preclude coverage (Grandadam, 275 Ill. App. 3d at 869-72). The court also stated that it \u201cmight view this case differently if mercury was released from a broken household thermostat or thermometer. It is possible that in such a situation mercury would not be considered a pollutant.\u201d Grandadam, 275 Ill. App. 3d at 873.\nThe cleaning company argues that the above-quoted language in Grandadam means that damage from a faulty machine does not constitute a pollutant under the absolute pollution exclusion. However, under Koloms, the dispositive determination is whether the release of the perc constituted traditional environmental pollution. Since the release of the perc did constitute such traditional environmental pollution, the absolute pollution exclusion applies to bar coverage, regardless of the cause of the perc\u2019s release.\nII. The Property Damage Legal Liability Section\nThe cleaning company next argues for coverage under the Property Damage Legal Liability section of the policy. That section states:\n\u201c[W]e will *** pay those sums that the insured becomes legally obligated to pay as damages *** because of property damage to premises (including permanently attached fixtures) rented to or occupied by you.\u201d\nThe cleaning company correctly points out that the Property Damage Legal Liability section is not subject to the absolute pollution exclusion contained in the Business Liability section. However, an examination of the policy reveals that the Property Damage Legal Liability section is unambiguously subject to a separate absolute pollution exclusion. The exclusion states:\n\u201cWe do not insure for loss either consisting of, or directly and immediately caused by, one or more of the following:\n* * *\nthe presence, release, discharge or dispersal of pollutants, meaning any solid, liquid, gaseous or thermal irritant or contaminant, including vapor, soot, fumes, acids, alkalis, chemicals and waste\nPerc is a pollutant within the meaning of the exclusion and, as such, the exclusion applies to preclude coverage. See our discussion, supra.\nIII. Estoppel\nFinally, the cleaning company argues that State Farm\u2019s failure to defend under a reservation of rights or seek a declaratory judgment estops it from raising the policy exclusions as a defense. To determine an insurer\u2019s duty to defend, the court compares the allegations of the underlying complaint to the policy language. Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 125 (1992). If the allegations fall potentially within the policy\u2019s coverage, the insurer has a duty to defend the insured against the underlying complaint. Outboard, 154 Ill. 2d at 125. The failure to defend the suit or seek a declaratory judgment as to coverage estops the insurer from raising any policy defenses should its decision regarding coverage turn out to be wrong. State Farm Fire & Casualty Co. v. Martin, 186 Ill. 2d 367, 371 (1999).\nHere, the underlying complaint filed by Centrum sought damages and injunctive relief for the release of the chemical perc into the environment. However, the policy expressly excludes coverage for property damage caused by or arising out of the release of chemicals. Further, the policy language, as construed by our supreme court in Koloms, precludes coverage for the type of traditional environmental pollution alleged in Centrum\u2019s complaint. Thus, State Farm did not breach its duty to defend, as a comparison of the allegations in the underlying complaint to the policy language reveals that no potential for coverage existed under the terms of the policy. Therefore, State Farm is not estopped from raising the exclusions as a coverage defense and the circuit court did not err in granting judgment on the pleadings for State Farm.\nFor the foregoing reasons, we affirm the circuit court.\nAffirmed.\nCAMPBELL and BUCKLEY, JJ., concur.", "type": "majority", "author": "JUSTICE O\u2019BRIEN" } ], "attorneys": [ "Schoenberg, Fisher, Newman & Rosenberg, Ltd., of Chicago (David A. Axelrod and Lauren A. Lundin, of counsel), for appellants.", "Rooks, Pitts & Poust, of Chicago (Michael C. Borders and Ellen D. Holzman, of counsel), for appellees." ], "corrections": "", "head_matter": "MOON KIM et al., d/b/a Oriental Cleaning Company, Plaintiffs-Appellants, v. STATE FARM FIRE AND CASUALTY COMPANY et al., Defendants-Appellees.\nFirst District (6th Division)\nNo. 1 \u2014 98 \u2014 3741\nOpinion filed March 24, 2000.\nSchoenberg, Fisher, Newman & Rosenberg, Ltd., of Chicago (David A. Axelrod and Lauren A. Lundin, of counsel), for appellants.\nRooks, Pitts & Poust, of Chicago (Michael C. Borders and Ellen D. Holzman, of counsel), for appellees." }, "file_name": "0770-01", "first_page_order": 790, "last_page_order": 798 }