PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
Nos. 07-4602/08-1996
_____________
DEVCON INTERNATIONAL CORPORATION;
V.I. CEMENT & BUILDING PRODUCTS, INC.
d/b/a MARK 21 INDUSTRIES, INC.,
d/b/a CONTROLLED CONCRETE PRODUCTS, INC.,
d/b/a SPRINGFIELD CRUSHER,
Appellants,
v.
RELIANCE INSURANCE COMPANY;
VIRGIN ISLANDS INSURANCE GUARANTY
ASSOCIATION,
Appellees.
_____________
On Appeal from the District Court of the Virgin Islands
(D.C. No. 01-cv-201)
District Judge: Curtis V. Gomez
_______________
Submitted Under Third Circuit LAR 34.1(a)
May 6, 2010
Before: SMITH, CHAGARES and JORDAN, Circuit
Judges.
(Filed: June 8, 2010)
_______________
Jack J. Aiello
Gunster, Yoakley & Stewart
777 S. Flagler Drive
East Tower, Suite 500
West Palm Beach, FL 33401
James L. Hymes, III
Law offices of James L. Hymes, III
5065 Norre Gade - #3
P.O. Box 990
St. Thomas, VI 00804
Counsel for Appellants
Richard H. Hunter
Hunter, Cole & Bennett
1138 King Street - #301
Christiansted, St. Croix
USVI 00820
Counsel for Appellees
_______________
OPINION OF THE COURT
_______________
2
JORDAN, Circuit Judge.
Devcon International Corporation (“Devcon”) appeals an
order of the District Court of the Virgin Islands of the United
States entering a declaratory judgment in favor of Reliance
Insurance Company (“Reliance”) on Devcon’s claim that
Reliance is required to defend and indemnify Devcon in a
nuisance action brought against it in the Superior Court of the
Virgin Islands (“the underlying action”). For the reasons that
follow, we will affirm.
I. Factual Background
This case arises from an alleged nuisance caused by
Virgin Islands Cement (“V.I. Cement”), a subsidiary of Devcon,
at the Henry E. Rohlsen Airport (“the airport”) on the island of
St. Croix, Virgin Islands.
A. Facts Alleged In The Underlying Complaint
In September 1999, the Virgin Islands Port Authority
(“VIPA”), which operates the airport, retained V.I. Cement to
act as general contractor on a project to extend the airport’s sole
runway. Construction began the following month and generated
large quantities of dust, which drifted over property belonging
to the plaintiffs in the underlying action, all of whom live near
the airport. The dust allegedly contaminated the plaintiffs’
drinking water and cisterns and caused breathing disorders and
other unspecified physical, emotional, and psychological
damage. The plaintiffs also alleged that emissions from
construction vehicles were causing similar problems, and that
3
construction noise from the project deprived them of the quiet
enjoyment of their properties.
In the spring of 2000, one of the plaintiffs filed a formal
complaint with the Virgin Islands Department of Planning and
Natural Resources (“DPNR”). DPNR investigators conducted
an examination of the site and ordered VIPA to undertake
immediate dust control measures and to submit a written plan
for the relocation of residents during construction. On March
31, 2000, the DPNR issued a supplemental order that required
VIPA to provide residents with uncontaminated potable water.
On June 7, 2000, it rescinded its prior requirement that VIPA
draft a plan for relocating residents, but it imposed additional
dust remediation obligations. According to plaintiffs, neither
VIPA nor its general contractor, V.I. Cement, ever fully
remediated the dust problem, which continued despite the
DPNR orders.
Plaintiffs filed the underlying suit on April 6, 2001,
advancing various nuisance-related claims. The plaintiffs
amended their complaint several times, the final version of
which sets forth claims against V.I. Cement for nuisance, breach
of the DPNR orders, trespass, negligence, and negligent and
intentional infliction of emotional distress.
B. The Pollution Exclusion And Proceedings In The
District Court
V.I. Cement, acting through its parent company, Devcon,
tendered defense of the plaintiffs’ claims to Reliance, which had
issued a commercial general liability policy to Devcon.
4
Reliance initially informed Devcon that “it is questionable
whether the insurance policy provides coverage for any of
[plaintiffs’] claims” because the policy excluded coverage for
injuries resulting from pollution caused by V.I. Cement. (App.
at 689.) However, Reliance later agreed to defend Devcon
pursuant to a reservation of rights letter under which Reliance
asserted “the right to withdraw from the matter at any future
date” if Reliance discovered that the plaintiffs’ injuries were
outside the scope of the insurance policy. (Id.) Devcon then
commenced the instant declaratory judgment action to ascertain
Reliance’s obligation to defend and indemnify it under the
policy.
The Reliance policy provides coverage for “those sums
that the insured becomes legally obligated to pay as damages
because of bodily injury or property damage ... . The bodily
injury or property damages must be caused by an occurrence.”
(Id. at 898.) “Occurrence” is defined as “an accident, including
continuous or repeated exposure to substantially the same
general harmful conditions.” (Id. at 911.)
The policy also contains numerous exclusions that excise
coverage for specific harms caused by the insured. In particular,
the policy removes coverage for any “bodily injury and property
damage which would not have occurred in whole or in part but
for the actual, alleged or threatened discharge, dispersal,
seepage, migration, release or escape of pollutants at any time”
(hereinafter “the pollution exclusion”). (Id. at 892.)
“Pollutants” are defined as “any solid, liquid, gaseous or thermal
irritant or contaminant, including, but not limited to, smoke,
vapor, soot, fumes, acids, alkalis, chemicals, and waste.” (Id.)
5
The parties filed cross-motions for summary judgment in
the District Court. The Court found that the pollution exclusion
removed coverage for the plaintiffs’ injuries and that Devcon
had no reasonable expectation of coverage for such harms
because they were beyond the scope of coverage. Accordingly,
the Court entered a declaratory judgment in favor of Reliance,
finding that it had no duty to defend or indemnify Devcon for
the injuries allegedly caused by V.I. Cement. Devcon filed this
timely appeal.
II. Discussion 1
On appeal, Devcon argues that the scope of the pollution
exclusion is ambiguous and that we must construe it to provide
coverage for the harms in the underlying action. Alternatively,
Devcon suggests that it reasonably believed that the insurance
policy would provide coverage for construction-related harms
such as those caused by dust and engine fumes, and it urges us
to extend coverage under the doctrine of reasonable
expectations. We address each of those arguments in turn.2
1
The District Court had jurisdiction over Devcon’s suit pursuant
to 48 U.S.C. § 1612(a) and 28 U.S.C. § 1332. We have
jurisdiction under 28 U.S.C. §§ 1291 and 1294.
2
Devcon also argues that the general liability policy covers
plaintiffs’ claims for nuisance caused by construction noise even
if the pollution exclusion removes coverage for their other
harms. It further argues that plaintiffs’ alleged injuries are
6
A. The Pollution Exclusion
To establish insurance coverage, the insured bears the
initial burden of showing that the harm described in the
plaintiff’s complaint potentially falls within the scope of the
policy. State Farm Fire & Cas. Co. v. Estate of Mehlman, 589
F.3d 105, 110 (3d Cir. 2009). “If the complaint avers facts that
might support recovery under the policy, coverage is triggered
covered by its automotive insurance, personal injury, and work
site pollution coverage. The latter form of coverage appears in
an endorsement to the policy and insures against pollution-
related losses provided that the discharge of pollutants lasts no
longer than seventy-two hours. Reliance argues that Devcon
waived its right to assert coverage under these policies because
it neglected to raise them before the District Court. Devcon
responds that it preserved the issues because it incorporated the
pertinent policy provisions into the summary judgment record
and because Reliance referenced those provisions in its
summary judgment briefing. However, Devcon never argued
those issues in its summary judgment briefs, and it therefore
never provided the District Court with an opportunity to rule on
those issues in the first instance. Accordingly, Devcon has
waived its right to assert those coverage issues on appeal. See
In re Ins. Brokerage Antitrust Litig., 579 F.3d 241, 262 (3d Cir.
2009) (“A fleeting reference or vague allusion to an issue will
not suffice to preserve it for appeal, so ‘the crucial question
regarding waiver is whether defendants presented the argument
with sufficient specificity to alert the district court.’” (quoting
Keenan v. City of Phila., 983 F.2d 459, 471 (3d Cir.1992))).
7
and the insurer has a duty to defend.” Sikirica v. Nationwide
Ins. Co., 416 F.3d 241, 225-26 (3d Cir. 2005). The burden then
shifts to the insurer to demonstrate that an exclusion places the
particular harm outside of the policy’s reach. Estate of
Mehlman, 589 F.3d at 111. Exclusions from coverage are
strictly construed against the insurer. Nationwide Mut. Ins. Co.
v. Cosenza, 258 F.3d 197, 206-07 (3d Cir. 2001).
In performing the foregoing analyses, the court must
evaluate the terms of the policy to determine whether they are
ambiguous. Lucker Mfg. v. Home Ins. Co., 23 F.3d 808, 814 (3d
Cir. 1994). A term is ambiguous if more than one reasonable
interpretation of the term exists. Id. If the court finds that the
policy is unambiguous, the court must give effect to the terms as
stated on the face of the policy. However, if the court identifies
an ambiguity in the policy, the court must resolve the ambiguity
by giving effect to the interpretation of the term that is most
favorable to the insured, as the non-drafting party. J.C. Penney
Life Ins. Co. v. Pilosi, 393 F.3d 356, 364 (3d Cir. 2004).
Reliance does not challenge Devcon’s assertion that the
injuries described in the underlying complaint fall within the
policy’s grant of coverage for bodily injury and property
damage. Instead, Reliance argues that the pollution exclusion
removes coverage for those harms. Devcon counters that the
pollution exclusion was drafted for the purpose of excluding
coverage for environmental pollution akin to the dumping of
hazardous waste. According to Devcon, the exclusion is
ambiguous, not because a particular term in the policy is
susceptible to multiple interpretations, but because the
exclusion, if read literally, would remove coverage for a large
8
number of harms that do not implicate the environmental
catastrophes that the exclusion was supposedly intended to
address.
We have previously addressed this type of argument in
Reliance Insurance Company v. Moessner, 121 F.3d 895 (3d
Cir. 1997). In that case, the plaintiffs were injured when a
device used to cure concrete products emitted hazardous
amounts of carbon monoxide into an enclosed area, causing
various non-fatal injuries. Id. at 898 & n.1. The plaintiffs
brought suit against the insured, which had purchased a general
liability policy from Reliance that contained a pollution
exclusion identical to the one in Devcon’s policy. Id. at 899-
900. Reliance brought a declaratory judgment action, and the
insured responded with the same argument that Devcon
currently makes: it argued that the pollution exclusion was
ambiguous because “its terms ‘suggest that the exclusion applies
only to environmental catastrophes.’” Id. at 900. We rejected
that argument as contrary to a facial reading of the policy.
Applying Pennsylvania law, we held that the exclusion “admits
of no ambiguity in its exclusion of claims such as those [alleged
in the underlying action]. It clearly states that the exclusion
applies to the escape of pollutants ‘at any time,’ and contains no
language limiting its scope to environmental catastrophes.” Id.
at 901.
Devcon argues that Moessner should not guide our
decision because “Pennsylvania courts do not apply [principles
9
established by the Restatement (Second) of Contracts,3 ] as
Virgin Islands courts do.” (Appellant’s Rep. Br. at 3.) That
attempt to distinguish Pennsylvania law is unpersuasive because
both Pennsylvania and the Virgin Islands follow the same
guiding principles for the interpretation of insurance contracts.
Under the law of both jurisdictions, we look first to the
insurance policy and proceed no further if we find that the
policy language is clear and unambiguous. Evanston Ins. Co. v.
Treister, 794 F. Supp. 560, 569 (D.V.I. 1992) (“It is settled law
that if an insurance policy is susceptible of only one reasonable
construction, and its terms are unambiguous, it must be
construed according to its plain language.”); Loomer v. M.R.T.
Flying Serv., Inc., 558 A.2d 103, 105 (Pa. Super. Ct. 1989)
(same). When assessing ambiguity, both jurisdictions construe
contractual language according to its “generally prevailing
meaning.” R ESTATEMENT (S ECOND) C ONTRACTS § 202(3)(a)
(1981); see B A Props., Inc. v. Aetna Cas. & Sur. Co., 273 F.
Supp. 2d 673, 677 (D.V.I. 2003) (applying § 202(3) of the
Restatement); Gustine Uniontown Assocs., Ltd. ex rel Gustine
Uniontown, Inc. v. Anthony Crane Rental, Inc., 892 A.2d 830,
837 (Pa. Super. Ct. 2006) (same). If the contract is
unambiguous, neither jurisdiction’s courts will inquire into
evidence that is external to the insurance contract. Treister, 794
F. Supp. at 569; Brosovic v. Nationwide Mut. Ins. Co., 841 A.2d
1071, 1074 (Pa. Super. Ct. 2004). Our rationale in Moessner,
while not a binding interpretation of Virgin Islands law, is thus
3
In the absence of controlling law, the Virgin Islands
legislature has instructed that “[t]he rules of the common law, as
expressed in the restatements of the law approved by the
American Law Institute, and to the extent not so expressed, as
generally understood and applied in the United States, shall be
the rules of decision in the courts of the Virgin Islands in cases
to which they apply ... .” V.I. C ODE A NN. tit. 1, § 4.
10
persuasive, and we adopt Moessner’s construction of the
pollution exclusion.
Applying Moessner’s holding to the facts at hand, we
agree with the District Court’s grant of declaratory judgment to
Reliance based on the pollution exclusion. The policy excludes
coverage for injuries that result from the “release” of any “solid
... irritant or contaminant.” (App. at 892.) The plaintiffs in the
underlying action allege that particulate dust generated at the
airport site has caused a variety of personal and property
injuries, namely breathing disorders and groundwater
contamination. Those injuries are directly caused by the dust’s
alleged tendency to irritate plaintiffs’ respiratory systems and to
taint the water table beneath their properties. The plain
language of the exclusion places those alleged harms outside the
policy’s reach.4 Likewise, the copious amounts of engine
4
Devcon asserts that we must limit the reach of the pollution
exclusion because a literal reading of the exclusion “would
produce nonsensical results.” (Appellant’s Op. Br. at 34.) For
example, Devcon argues that, read literally, the exclusion would
remove coverage for a slip-and-fall injury caused by a bottle of
drain opener spilled in a supermarket aisle because that injury
would have resulted from the release of a chemical irritant onto
the floor. Whatever the merits of this argument, we need not
consider them because a slip-and-fall is not analogous to the
injuries that plaintiffs allege in the underlying action. In
Devcon’s hypothetical, the slip-and-fall was not caused by the
drain opener’s status as a chemical irritant or contaminant but
merely by the fact that a liquid was spilled on the floor. In other
words, the injury-causing liquid need not have been a pollutant.
Plaintiffs’ injuries, however, are a consequence of, for example,
the dust’s tendency to contaminate the environment and irritate
the lining of their lungs. Those injuries, if proven, are a result
of the dust as a pollutant of air and water. Thus, we need not
11
exhaust complained of are “fumes” and “gaseous” contaminants
covered by the pollution exclusion. (App. at 892.) We conclude
that the exclusion means what its plain language says: that the
policy provides no insurance coverage when bodily injury or
property damage results from airborne solids and fumes such as
the dust clouds and engine exhaust complained of in the
underlying action.
Devcon attempts to overcome the plain meaning of the
exclusion by arguing that it must be ambiguous because some
courts have limited its reach to environmental catastrophes
while others have not. However, an ambiguity arises only when
there are plausible, competing interpretations of a policy term.
The cases which limit pollution exclusions to catastrophic
releases of inherently hazardous substances do not seem to turn
on policy ambiguities. Instead, they appear to treat the historical
reasons for including pollution exclusions in insurance contracts
like a legislative history to guide interpretation of the
exclusions. Literal application of such an exclusion, their
reasoning goes, gives it such broad scope that it encompasses
many harms which, according to the alleged history of the
provision, it was never intended to reach. See, e.g., State v.
Allstate Ins. Co., 201 P.3d 1147, 1020 (Cal. 2009) (“Because of
the tension between the potentially broad literal meanings of
these terms and their connotations in common usage, the
pollution exclusion ... is ambiguous as to its exact scope of
application.”); Am. States Ins. Co. v. Koloms, 687 N.E.2d 72, 79
(Ill. 1997) (“[W]e are troubled by what we perceive to be an
overbreadth in the language of the exclusion as well as the
manifestation of an ambiguity which results when the exclusion
is applied to cases which have nothing to do with ‘pollution’ in
consider whether the exclusion is ambiguous when applied to
injuries not caused by the irritating or contaminating nature of
a substance.
12
the conventional, or ordinary, sense of the word.”); Motorists
Mut. Ins. Co. v. RSJ, Inc., 926 S.W.2d 679, 682 (Ky. Ct. App.
1996) (finding that the pollution exclusion was ambiguous
because “historical perspective and the continued use of
environmental law terminology” signaled an intent that it apply
only to environmental catastrophes); Morton Int’l, Inc. v. Gen.
Accident Ins. Co. of Am., 629 A.2d 831, 848-55, 875 (N.J. 1993)
(refusing to enforce a literal reading of the pollution exclusion,
in part because of evidence that the exclusion was intended to
apply only to large-scale environmental disasters). Even
Devcon recognizes that its argument relies not on competing
interpretations of a policy term but on a perceived inequity that
results from applying the exclusion’s plain meaning. (See
Appellant’s Op. Br. at 34 (“So many courts find the pollution
exclusion to be ambiguous because a literal reading of the
exclusion would produce nonsensical results.”).)
The trouble with Devcon’s approach is that, instead of
asking whether the contractual language is clear and then
applying the exclusion’s unambiguous meaning, it looks at the
effects of the exclusion and concludes that the language must be
unclear because it produces, in Devcon’s view, bad results. That
is an unduly intrusive way to evaluate the relationship between
two sophisticated commercial entities bargaining at arm’s
length. See Moessner, 121 F.3d at 905 (recognizing that, as a
general matter, “sophisticated insureds may exercise more
bargaining power vis-a-vis the insurers, and therefore be in less
need of protection from the courts than other insureds”); see
also Canal Ins. Co. v. Underwriters at Lloyd’s London, 435 F.3d
431, 440 (3d Cir. 2006) (holding that, under Pennsylvania law,
the reasonable expectations of an insured may overcome
unambiguous policy language only when the insured is a non-
commercial entity); Owens-Illinois, Inc. v. United Ins. Co., 625
A.2d 1, 15 (N.J. Super. Ct. App. Div. 1993) (“The principles
favoring the interests of the insured are less persuasive in the
13
context of a large skilled corporation.”), rev’d on other grounds,
650 A.2d 974 (N.J. 1994). Whatever the insurance industry
background for the framing of the exclusion at issue here, the
dispositive point is that the language of the exclusion is, as the
District Court noted, sufficiently plain to understand on its face
and apply to these facts. That determination properly ends the
inquiry. See Clark v. Gen. Accident Ins. Co. PR. Ltd., 951 F.
Supp. 559, 562 (D.V.I. 1997) (“Because the insuring clauses are
not ambiguous, their plain meaning must be given effect.”).
If it seems harsh to leave Devcon without coverage, we
reiterate that both Devcon and Reliance are sophisticated
businesses capable of bargaining to protect their interests.
Indeed, it is no stretch to consider that injuries caused by clouds
of dust and diesel fumes generated constantly over a period of
several months represent the type of harm from which Reliance
sought to shield itself when drafting the pollution exclusion.5
Devcon accepted the insurance policy with full knowledge of
the exclusion’s broad language. It is not inequitable to hold
Devcon to the terms of its bargain, even if, in retrospect, it
wishes that it had negotiated for greater insurance coverage.
Accordingly, we conclude that the pollution exclusion applies to
5
This appeal does not raise the concerns expressed in cases
like Apana v. TIG Insurance Co., 574 F.3d 679 (9th Cir. 2009),
which observed that “[a]pplying the literal terms of [pollution
exclusions] will exclude a wide range of injuries from coverage;
indeed, it is difficult to say what injuries would be covered for
businesses, such as plumbers, that routinely deal with substances
that are technically ‘irritants’ or ‘contaminants.’” Id. at 684.
Whatever the merits of such concerns, the plaintiffs’ alleged
injuries here go to the fundamental purpose of the pollution
exclusion, namely, the withholding of coverage for injuries that
result from the alleged release of large quantities of harmful
substances into the atmosphere.
14
the injuries described in the underlying complaint and that the
policy provides no coverage for those alleged harms.
B. The Doctrine Of Reasonable Expectations
Devcon argues that, even if the pollution exclusion
removes plaintiffs’ alleged injuries from coverage, we should
nevertheless conclude that the doctrine of reasonable
expectations requires Reliance to defend and indemnify it in the
underlying action. The doctrine of reasonable expectations, as
articulated under Virgin Islands law, requires examination of the
reasonable expectations of the insured, when resolving an
ambiguity in an insurance contract.6 Berne v. Aetna Ins. Co.,
6
The doctrine of reasonable expectations varies from
jurisdiction to jurisdiction. In some jurisdictions, such as
Delaware and the Virgin Islands, courts look to the insured’s
expectations only for the purpose of resolving contractual
ambiguities and will not allow those expectations to override the
policy’s plain language. See Hallowell v. State Farm Mut. Ins.
Co., 443 A.2d 925, 927 (Del. 1982) (“[T]he doctrine of
reasonable expectations is applicable in Delaware to a policy of
insurance only if the terms thereof are ambiguous or conflicting,
or if the policy contains a hidden trap or pitfall, or if the fine
print purports to take away what is written in large print.”). In
others, including Pennsylvania and New Jersey, an insured may
invoke the doctrine – even when the language of the insurance
policy is plain – provided that the insured shows that
extraordinary circumstances support application of coverage.
See Betz v. Erie Ins. Exch., 957 A.2d 1244, 1253 (Pa. Super. Ct.
2008) (“[A] court’s focus upon the insured’s ‘reasonable
expectations’ is not limited only to situations in which the
insurance contract might be deemed ambiguous ... .”); see also
G-I Holding, Inc. v. Reliance Ins. Co., 586 F.3d 247, 254 (3d
Cir. 2009) (stating that, under New Jersey law, the reasonable
15
604 F. Supp. 958, 962 (D.V.I. 1985) (refusing to consider the
insured’s expectations when the policy contained no ambiguous
terms). The doctrine applies only when a term in a policy is
ambiguous, and an insured may not use it to obtain coverage
when the plain language of an exclusion clearly places an injury
beyond the policy’s scope. Id. (“[T]he reasonable expectations
doctrine ‘is not a rule granting substantive rights to an insured
when there is no doubt as to the meaning of policy language.’”
(quoting Hallowell v. State Farm Mut. Ins. Co., 443 A.2d 925,
927 (Del. 1982))).
In this case, Devcon asserts that we should invoke the
doctrine to extend coverage because it reasonably expected the
policy to cover “any liability incurred as a result of its negligent
performance of its construction activities.” (Appellant’s Op. Br.
at 40.) It also argues that it could not have reasonably
anticipated that the dust would constitute a pollutant under the
policy because the dust “is a naturally-occurring material that is
literally the stuff St. Croix is made of.” (Id. at 41.) Neither of
these arguments is sufficient to trigger insurance coverage
because Devcon has failed to show that the pollution exclusion
is ambiguous, an essential prerequisite to application of the
doctrine under Virgin Islands law.7 Berne, 604 F. Supp. at 962.
expectations of the insured may overcome the plain meaning of
a policy only under “exceptional circumstances”). In this case,
we are concerned only with the former iteration of the doctrine.
7
Assuming that we could consider Devcon’s expectations,
however, we would still reject its argument, which is premised
on dust being a naturally occurring byproduct of V.I. Cement’s
normal construction activities. That argument is less than
persuasive, first, because the dust clouds created by the
construction were, by definition, not naturally occurring. They
16
III. Conclusion
Reliance has carried its burden to show that the plain
language of the pollution exclusion removes coverage for the
plaintiffs’ alleged harms. Accordingly, we will affirm the
judgment of the District Court.
occurred because of V.I. Cement’s activities. And second, the
argument is unpersuasive because it assumes that a substance in
nature – “the stuff St. Croix is made of” – cannot constitute a
pollutant. Generally speaking, whether a substance is a
pollutant depends on context, including the quantity of the
substance released into the air or water. The question does not
depend on whether the substance exists naturally but on whether
it causes harm once dispersed. E NVIRONMENTAL P ROTECTION
A GENCY, T ERMS OF ENVIRONMENT: G LOSSARY, A BBREVIATIONS
AND A CRONYMS, G lo ssary P (M ay 8 , 2 0 0 8 ),
http://www.epa.gov/OCEPAterms/pterms.html (defining as a
pollutant “any substance introduced into the environment that
adversely affects the usefulness of a resource or the health of
humans, animals, or ecosystems”). The clouds of dust that
engulfed parts of the American Midwest during the Great
Depression were no less choking because they were the stuff
that Oklahoma was made of than had they been something other
than dust. Similarly, no one would say that an oil spill is not
polluting simply because oil is a naturally occurring substance.
Nor is it a defense to argue that harms caused by particulate dust
should be covered because the dust was created as the result of
V.I. Cement’s usual business activities. Devcon could have
foreseen the risks associated with its construction activities and
accordingly sought adequate insurance coverage for those risks,
not to mention that it may have undertaken more aggressive dust
control efforts on the runway expansion project at issue in the
underlying litigation. Hindsight and regret cannot expand
contractual rights.
17