## Facts

- Ribi Immunochem Research, Inc. operated a biomedical research facility in Montana that generated liquid toxic waste.
- For about three years, Ribi intentionally disposed of this liquid waste by regularly pouring it into a county landfill, believing it would evaporate.
- The waste migrated through soil and contaminated groundwater, prompting remediation and generating claims by private property owners and government entities.
- Ribi incurred defense costs and settlement payments to resolve the environmental claims.
- Ribi held a Comprehensive General Liability policy issued by Travelers covering “occurrences” causing property damage.
- The policy included a qualified pollution exclusion for damages arising from the “discharge, dispersal, release or escape” of pollutants, with an exception if the discharge was “sudden and accidental.”
- Travelers defended under a reservation of rights and sought a declaration of no coverage and reimbursement of defense costs.

## Issues

1. Whether the qualified pollution exclusion barred coverage because Ribi’s pollutant discharge was not “sudden and accidental.”
2. Whether Travelers owed a duty to defend Ribi against the environmental claims.
3. Whether Travelers could recoup defense costs advanced under a reservation of rights after a judicial determination of no duty to defend.
4. Whether the trial court properly ordered Travelers to pay attorney’s fees incurred by Ribi in pretrial discovery motions.

## Decision

- The court affirmed summary judgment for Travelers.
- The pollution exclusion barred coverage; the “sudden and accidental” exception did not apply to Ribi’s repeated, intentional waste dumping over an extended period.
- Because there was no potential for coverage, Travelers had no duty to defend any of the environmental claims.
- Travelers was entitled to reimbursement of defense costs it paid under a reservation of rights after it was determined that no duty to defend existed.
- The court affirmed the limited attorney’s-fee award to Ribi related to discovery-motion litigation.

## Legal Principles

- In a qualified pollution exclusion, the “sudden and accidental” exception is evaluated by focusing on the discharge event (the act of releasing pollutants), not later migration or resulting damage.
- “Sudden and accidental” requires both (a) a temporal component (abruptness, not a routine or prolonged practice) and (b) fortuity (the discharge itself must be unintended and unexpected from the insured’s standpoint).
- Where policy language and the nature of the claims establish no possible coverage, the insurer has no duty to defend.
- An insurer that provides a defense under a reservation of rights may recover defense costs if a court later determines the insurer had no duty to defend any of the asserted claims.

## Conclusion

The Montana Supreme Court held that routine, deliberate disposal of toxic waste over years is neither “sudden” nor “accidental,” so the pollution exclusion barred coverage and eliminated any duty to defend; because no duty to defend ever existed, the insurer could recoup defense costs advanced under a reservation of rights, while a limited discovery-related fee award to the insured was upheld.


Travelers Cas. & Sur. Co. v. Ribi Immunochem Rsch., Inc., 108 P.3d 469 (Mont. 2005)