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Case Briefs

By Laura A. Foggan and Benjamin J. Theisman
June 27, 2008

Alaska Supreme Court Enforces Pollution Exclusion

The Alaska Supreme Court has ruled in Whittier Properties, Inc. v. Alaska National Insurance Co., No. 6273 (Alaska June 13, 2008) that coverage is barred by an 'absolute' pollution exclusion for gasoline leaks from an underground storage tank, holding that the exclusion is unambiguous and that the policyholder's contrary interpretation was unreasonable. The court further ruled that the 'personal injury' coverage part does not provide coverage for environmental harms. This decision is the first Alaska high court ruling on these issues.

The policyholder in this suit owned and managed a gas station and attached convenience store. Prior to the relevant policy periods, the policyholder had a gasoline storage tank installed on its site. The policyholder agreed to indemnify the tank installer for damages arising out of the tank. After several years of operation, it became apparent that the gasoline storage tank was not installed properly, and a significant leak had developed in the tube used to fill the tank with gasoline. As a result of the leak, owners of several neighboring properties sued the policyholder and the state of Alaska commenced a regulatory proceeding.

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