Indiana Lumbermens Mutual Insurance Company, an Indiana Corporation v. West Oregon Wood Products, Inc., an Oregon Corporation

Defendant West Oregon Wood Products, Inc., appeals the district court’s grant of summary judgment in favor of Plaintiff Indiana Lumbermens Mutual Insurance Company. The district court held that Plaintiff, which provided Defendant with commercial liability insurance, had no duty to defend Defendant in a nuisance action. We affirm.

BACKGROUND

1. Procedural History

On April 12, 1999, Finos Lunsford filed an action (“Lunsford Action”) on behalf of himself and other plaintiffs. The complaint alleged that, since 1998, Defendant’s plant had emitted gases and particulates, causing personal injury and property damage to the Lunsford Action plaintiffs. Defendant tendered the defense to Plaintiff, which denied any duty to defend. Plaintiff concluded that the pollution exclusions in each of its policies barred coverage for liability arising from any of the claims alleged in the Lunsford Action.

On June 1, 1999, Defendant demanded a defense based on the “hostile fire” exception to the pollution exclusions. Plaintiff again denied any obligation to defend on the ground that the complaint did not allege harm caused by a fire. Plaintiff then filed this declaratory judgment action, seeking a…