## Facts

- Dimmitt Chevrolet, Inc. operated automobile dealerships in Florida and sold used crankcase oil to Peak Oil Company from about 1974 to 1979.
- Peak stored waste oil and sludge in unlined pits and bins, leading to leakage and contamination of soil and groundwater over time.
- In 1983, the EPA identified Dimmitt as a potentially responsible party under CERCLA based on its waste-oil sales to Peak.
- Dimmitt entered an administrative order on consent to perform remedial measures, without conceding CERCLA liability.
- From 1972 to 1980, Dimmitt held CGL policies issued by Southeastern Fidelity Insurance Corporation.
- The policies contained a pollution exclusion for property damage arising out of the discharge, dispersal, release, or escape of pollutants, with an exception for discharges that were “sudden and accidental.”
- The contamination at Peak resulted from leakage occurring gradually over many years, not from a single discrete release.

## Issues

1. Whether the phrase “sudden and accidental” in the CGL pollution exclusion is ambiguous.
2. Whether “sudden” can mean only “unexpected,” such that unintended gradual pollution falls within the exception.
3. Whether the pollution exclusion bars coverage for long-term leakage where no abrupt discharge is shown.

## Decision

- The Florida Supreme Court affirmed summary judgment for Southeastern.
- The court held “sudden and accidental” is unambiguous.
- “Sudden” includes a temporal requirement of immediacy or abruptness, not merely unexpectedness.
- Because the pollution occurred gradually over years, the exception did not apply and the pollution exclusion barred coverage.
- Southeastern had no duty to defend or indemnify Dimmitt for the Peak Oil environmental claims.

## Legal Principles

- Insurance policy terms are interpreted according to ordinary meaning in context; ambiguity is not established merely because dictionaries provide multiple definitions.
- The conjunctive phrase “sudden and accidental” requires both an abrupt discharge (“sudden”) and an unintended or unexpected event (“accidental”).
- Contract language should be construed to give each term independent effect; reading “sudden” as only “unexpected” would make it redundant of “accidental.”
- When policy language is unambiguous, courts apply it as written and need not consider extrinsic drafting history.
- Under the standard pollution exclusion, gradual pollution over an extended period is not “sudden,” even if unintended, and remains excluded.

## Conclusion

The court held that the pollution exclusion’s “sudden and accidental” exception applies only to abrupt, unintended discharges; it does not restore CGL coverage for environmental damage caused by gradual leakage over many years.


Dimmitt Chevrolet, Inc. v. Southeastern Fidelity Insurance Corp., 636 So. 2d 700 (Fla. 1993)