A manufacturer of Lawn and Garden wheels brought claim under its named peril property insurance for interior damage to its plant caused by a vapor cloud emitted by processing equipment that had not been properly turned off after use. The insurer brought a declaratory judgment action to determine its rights and obligations with respect to the two perils under which claim was made: "Fire" and "Smoke causing sudden and accidental damage. This cause of loss does not include smoke from agricultural smudging or industrial operations."

The equipment involved was a degreaser, a vat with heating coils in the bottom and containing liquid trichloroethane. When heated, the chemical vaporized and caused removal of grease residue from fabricated steel wheels that were put into the degreaser. There was agreement that the vapor cloud, emitted from the equipment and causing damage to the plant, resulted from failure to properly shut down the heating coils at the end of the work day.

With regard to the fire peril, the insurer's expert witnesses testified that no fire occurred. They said that vaporized trichloroethane rose and escaped from the vat when cold water controls above were turned off and heating coils below were left on. Hydrochloric acid was formed when vapor entered the air, causing the damage to the inside of the plant. This theory was supported by eyewitnesses, including the fire chief, who saw no flames and by the fact that no fire fighting equipment was needed. As for the smoke peril, the insurer stressed that the vapor cloud was caused by industrial operations, specifically excluded under the peril.

An expert testifying for the insured testified that the heating coils became so hot that oil deposits at the bottom of the degreaser combusted, but that the fire extinguished itself before anyone reached the scene. The insured claimed that the events that followed were triggered by the fire. It also argued that smoke was a covered cause of loss and that the vapor cloud was not caused by its industrial operations.

The court found no evidence that a fire had occurred. There was no scorching or charring on the equipment or other property, not even on the exterior of the degreaser. There was no indication of fire or smoke stains anywhere in the plant. The court concluded that a fire did not occur. It further concluded that ".... the word 'smoke' is unambiguous and does not include gas vapors."

Judgment was entered in favor of the insurer and against the insured. (UNITED STATES FIDELITY AND GUARANTEE COMPANY, Plaintiff v. FIRST STATE BANK AND TRUST COMPANY ET AL., Defendants. United States District Court for the Eastern District of Missouri. No. 1:93 cv 0184 SNL. October 7, 1996. CCH 1997 Fire and Casualty Cases, Paragraph 5989.)