In Equally Divided Opinion, Michigan Supreme Court Defines "Waste" for Purposes of Pollution Exclusion
September, 2005
In City of Grosse Pointe Park v. Municipal Liability and Property Pool, 473 Mich. 188, 702 N.W.2d 106 (Mich. 2005), the Michigan Supreme Court addressed the issue of whether the term “waste,” as used in the pollution exclusion clause of a liability policy, included human sewage. Although the Supreme Court agreed on the outcome – sewage is “waste” under the policy’s exclusion clause – neither justice who wrote an opinion garnered a majority. As a result the opinion binds the parties, but does not establish binding precedent. Nevertheless, it is a good indicator of how this issue will be decided in the future.
Facts
The facts of the case are simple. The city of Grosse Pointe Park, Michigan had a practice of discharging sewage into a creek when its sewer system became overtaxed during, for example, periods of heavy rain. As a result of these discharges, the sewage-filled creek would then back up into the homes of residents who lived near it. The residents filed suit against the city. The city tendered its defense to defendant Michigan Municipal Liability and Property Pool, which insured the city under a general liability policy. The policy contained an exclusion for “Bodily Injury or Property Damage arising out of the … release or escape of pollutants.” The policy defined the term “pollutants” 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.
On the parties’ cross-motions for summary judgment, the trial court found that “sewage” was a pollutant under the pollution exclusion because it is “waste;” the Court of Appeals reversed.
Analysis
The Supreme Court reversed the Court of Appeals, finding that “waste,” although not defined in the policy, includes “sewage” when accorded its commonly understood meaning as set forth in the American Heritage Dictionary (2d college ed., 1982): “[a] useless or worthless by-product …[g]arbage; trash … [t]he undigested residue of food eliminated from the body.” With this finding, “sewage” satisfied the meaning of “waste” under the policy and in turn, satisfied the meaning of a “pollutant” within the pollution exclusion. Consequently, the alleged damages from the waste discharged by the city were excluded from coverage. •
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