The Minnesota Pollution Control Agency required the owner of nearly 100 acres of land, after an environmental assessment, to pay for remedial investigation of the scope of contamination. Development of the parcel was conditional on compliance with the order. The owner brought a declaratory judgment action against a group of insurers that provided its comprehensive general liability insurance between 1963 and 1984 when each denied coverage. It was a matter of record that several acres of the land had been used as a township dump from the late 1930s until 1954.

The insured moved to amend its complaint to estop the insurance companies from enforcing the pollution clause in their policies. It claimed that, when filings were made with state insurance departments for introduction of the standardized pollution exclusion clause in 1970, a brief explanation provided to the regulators "misled" the regulators "into believing that the pollution exclusion clause was merely a clarification of existing coverage when, in fact, it was a significant reduction in coverage."

The trial court denied the insured's motion to amend the complaint. The appeal court reversed the judgment of the trial court, finding the insured's proposed amendment of the complaint proper. The matter then rested with the Minnesota Supreme Court, which focused on "....whether it was reasonable for (the insured) or the (Minnesota Insurance Commissioner) to rely on any information that indicated the pollution exclusion clause did not exclude from coverage pollution that was released gradually over time."

The high court cited its conclusion in a prior case (Board of Regents v. Royal Insurance Company of America) that "....the pollution exclusion clause was unambiguous and barred coverage for any discharge that was not both sudden, meaning abrupt, and accidental, meaning unexpected or unintended." It found that there was no coverage for the gradual pollution over time when a section of the insured's land was used for a waste disposal site.

The court then concluded that "....reliance on any explanations (allegedly) contrary to the unambiguous meaning of the policy language is, as a matter of law, unreasonable."

Finding the pollution exclusion clause unambiguous and suggested reliance on any contrary representations not reasonable, the court reversed the judgment of the appeal court in favor of the insurance companies and against the insured.

(ANDERSON ET AL., Respondents v. MINNESOTA INSURANCE GUARANTEE ASSOCIATION, Respondent. Minnesota Supreme Court. No. C7-93-2490. July 28, 1995. 1995 CCH Fire and Casualty Cases, Paragraph 5414.)