This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1994)

Mary Lyman, et al.,
Dakota Mental Health Center (now known as
Linden Center for Psychological Health, Inc.),


Stuart Corporation
The Travelers Insurance Company,

Minnesota Court of Appeals #C3-95-2460
Ramsey County District Court #C093768

May 7, 1996

David R. Ludwigson, 336 Robert Street North, Suite 1506, St. Paul, MN 55101 (for appellants)

Paul G. Neimann, Charles E. Jones, Moss & Barnett, P.A., 4800 Norwest Center, 90 South Seventh Street, Minneapolis, MN 55402-4129 (for respondent)

Considered and decided by Parker, Presiding Judge, Schumacher, Judge, and Mansur, Judge.*

U N P U B L I S H E D    O P I N I O N


Mary Lyman and Melanie Terbovic appeal from summary judgment dismissing their claim against respondent The Travelers Insurance Company for injuries sustained while occupying a building managed by Stuart Corporation, its insured. We affirm.


Appellants Mary Lyman and Melanie Terbovic worked in the Apple Valley Commons No. 2 office building as licensed clinical psychologists for Dakota Mental Health Center. The Commons was owned by American National Bank and managed by Stuart Corporation.

During the fall of 1990, a new tenant leased space in the Commons. Prism Commercial and Industrial Painting was hired to paint the interior of the renovated sections. Prism used solvents and other "noxious substances" during the renovations.

Lyman and Terbovic alleged they were injured by the noxious substances. The parties do not dispute that the sole cause of Lyman and Terbovic's injuries was their inhalation of the chemical fumes used by Prism.

Lyman and Terbovic sued Prism for failing to ensure adequate ventilation and failing to warn the occupants of the Commons about the danger of inhaling its products. They also sued Stuart for failing to ensure adequate ventilation and prior knowledge of their complaints. Lyman and Terbovic also claimed American National was vicariously liable for Stuart's alleged negligence.

Lyman and Terbovic settled with Prism and American National for $33,500. Lyman and Terbovic then executed a Miller v. Shugart [1] agreement with Stuart under which they agreed to accept $75,000 for Lyman and $45,000 for Terbovic, payable only out of policy proceeds, if any, from Stuart's insurer, Travelers.

Lyman and Terbovic then brought an action against Travelers, claiming the amount in the agreement. Travelers denied coverage, arguing that an absolute pollution exclusion in the policy precluded any coverage for Lyman and Terbovic's injuries.

The Travelers' policy provided broad coverage for

those sums the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" * * * caused by an "occurrence".

The policy contained an absolute pollution exclusion, which stated:

This insurance does not apply to:

* * * *

f. (1) "Bodily injury" or "property damage" arising out of the actual, alleged or threatened discharge, dispersal, release or escape of pollutants:

(a) At or from premises you own, rent or occupy * * *.

* * * *

Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.

The parties brought cross-motions for summary judgment. The district court granted Travelers summary judgment, concluding that the exclusion was applicable to American National as owner of the building and Stuart as its building manager. Lyman and Terbovic appeal.


The only issue on appeal is the construction and effect of an insurance contract. Insurance coverage issues are questions of law. State Farm Ins. Cos. v. Seefeld, 481 N.W.2d 62, 64 (Minn. 1992). A reviewing court is not bound by and need not give deference to a trial court's decision on a purely legal issue. Frost-Benco Elec. Ass'n v. Minnesota Pub. Utils. Comm'n, 358 N.W.2d 639, 642 (Minn. 1984).

Insurance contracts are to be construed as a whole and the contract language is to be given its plain and ordinary meaning. Seefeld, 481 N.W.2d at 64. "[A]n insurer has the burden of proving that a policy exclusion applies." Id. Exclusions in insurance contracts are read narrowly against the insurer. Id.

Lyman and Terbovic argue that the pollution exclusion does not protect Stuart because the "you" in the exclusion is defined only as the "Named Insured," American National, and not its property manager Stuart, who is not a "Named Insured." Lyman and Terbovic argue in the alternative that Stuart is a "Named Insured" because its name appears on the declarations page. They argue that if Stuart is a "Named Insured," the exclusion does not apply because Stuart does not "own, rent or occupy" the Commons. We disagree. The declarations page shows the "NAMED INSURED AND MAILING ADDRESS" as:

ST. PAUL, MN 55116-3048

The address listed was for Stuart. A common sense reading shows that the comma and the "%" symbol mean the policy should be mailed "in care of" Stuart, American National's property manager. Stuart is not a "Named Insured."

Lyman and Terbovic's technical reading of the policy misinterprets the application of pollution exclusions in general. Absolute pollution exclusions are valid and exclude all coverage. See, e.g., City of Maple Lake v. American States Ins. Co., 509 N.W.2d 399, 405-06 (Minn. App. 1993) (holding absolute pollution exclusion bars any recovery for injuries arising from release of pollution from municipal wastewater treatment plant), review denied (Minn. Feb. 24, 1994); League of Minn. Cities Ins. Trust v. City of Coon Rapids, 446 N.W.2d 419, 422 (Minn. App. 1989) (holding pollution exclusion bars any recovery for injuries arising from release of pollution by Zamboni machine at ice rink), review denied (Minn. Dec. 15, 1989).

Here, the exclusion essentially provides that there is no coverage for Lyman and Terbovic's injuries that arose from the noxious substances released at the Commons. Whether Stuart was a "Named Insured" or not is irrelevant. The policy simply excludes coverage.



* Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.

[1] 316 N.W.2d 729 (Minn. 1982).