In Montrose Chem. Corp. of Cal. v. Superior Court,
114 Cal. App. 5th 889, 337 Cal. Rptr. 3d 222 (2025), the California Court of Appeal refused to allow extrinsic evidence to interpret the word "sudden" in qualified pollution exclusions as including gradual but unexpected pollution. The court held that, under controlling California appellate precedent, the term "sudden" in these standard-form exclusions unambiguously includes a temporal element (abruptness) and cannot reasonably be construed to mean "gradual," even if the pollution was unintended or unexpected. Therefore, extrinsic evidence offered to prove that unreasonable interpretation was irrelevant and inadmissible.
Key Facts of the Case
Montrose Chemical Corporation operated a DDT manufacturing plant in Torrance, California, resulting in long-term environmental contamination. Montrose sued numerous insurers seeking coverage under commercial general liability policies for liabilities arising from the contamination. The insurers denied coverage based on "qualified pollution exclusions" (QPEs) in the policies, which exclude coverage for pollution damage unless the discharge, dispersal, release, or escape of pollutants was "sudden and accidental" or caused by a "sudden, unintended and unexpected happening."
Montrose sought to introduce extrinsic evidence (industry drafting history and statements to state regulators) to argue that "sudden" means only "unexpected" or "unintended," without any temporal (abrupt) requirement. The trial court excluded the evidence, citing prior appellate decisions holding that "sudden" unambiguously requires abruptness and is the antonym of "gradual."
Legal Analysis
Montrose petitioned for a writ of mandate to reverse the evidentiary ruling. The California Court of Appeal upheld the exclusion due to binding precedent rejecting the exact interpretation that Montrose advanced.
The primary legal issues involved included the following.
Does the "prior judicial construction" doctrine categorically bar extrinsic evidence when a policy term has previously been held unambiguous?
Was Montrose's proffered extrinsic evidence admissible to prove that "sudden" in the QPEs is reasonably susceptible to meaning "gradual but unexpected"?
Citing California Supreme Court decisions, the court reaffirmed that extrinsic evidence is provisionally admissible if relevant to prove a meaning to which the policy language is reasonably susceptible, even if the language appears unambiguous on its face. Drafting history and industry materials may be considered for standardized provisions, but only if they tend to prove a susceptible meaning.
A term judicially construed as unambiguous is generally treated as unambiguous unless the parties show contrary intent through evidence of a different but still reasonably susceptible meaning (Bartlome v. State Farm Fire & Cas. Co.,
208 Cal. App. 3d 1235 (1989)). The doctrine does not absolutely preclude extrinsic evidence; it simply incorporates the prior construction unless rebutted by admissible evidence.
Uniform California appellate precedent holds that "sudden" includes a temporal element (abrupt or immediate onset). "Sudden" and "gradual" are antonyms; no objectively reasonable insured would expect "sudden" to cover gradual pollution.
The phrase "sudden and accidental" cannot reasonably be read to cover gradual, continuous discharges, regardless of intent or expectation. The trial court was bound to follow controlling appellate decisions. The California Court of Appeal, while not strictly bound by co-equal panels, independently agreed: "Gradual is the opposite of sudden." Extrinsic evidence offered solely to prove an unreasonable meaning is irrelevant and inadmissible.
Case Outcome and Significance
The writ was denied, and the trial court's evidentiary ruling was affirmed.
The decision reinforced decades of California's authority that "sudden" in qualified pollution exclusions requires temporal abruptness and excludes gradual pollution, limiting insureds' ability to use extrinsic evidence to relitigate settled interpretations of standard-form language is inappropriate.
Conclusion
No one likes to have a claim denied. A major corporation like Montrose has the ability to litigate insurance policy interpretation when faced with major losses like those resulting from pollution. In this case, the pollution took place gradually over a period of years. Montrose sought an interpretation that "sudden and accidental" was limited to "accidental" only to find multiple Supreme Court decisions defining "sudden" to include a temporal effect and that it was the opposite of "gradual" even when not intended. Insurance policies that contain clear and unambiguous language supported by multiple precedential rulings cannot be revisited, and extrinsic evidence cannot be used to change the precedents.
Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.
In Montrose Chem. Corp. of Cal. v. Superior Court, 114 Cal. App. 5th 889, 337 Cal. Rptr. 3d 222 (2025), the California Court of Appeal refused to allow extrinsic evidence to interpret the word "sudden" in qualified pollution exclusions as including gradual but unexpected pollution. The court held that, under controlling California appellate precedent, the term "sudden" in these standard-form exclusions unambiguously includes a temporal element (abruptness) and cannot reasonably be construed to mean "gradual," even if the pollution was unintended or unexpected. Therefore, extrinsic evidence offered to prove that unreasonable interpretation was irrelevant and inadmissible.
Key Facts of the Case
Montrose Chemical Corporation operated a DDT manufacturing plant in Torrance, California, resulting in long-term environmental contamination. Montrose sued numerous insurers seeking coverage under commercial general liability policies for liabilities arising from the contamination. The insurers denied coverage based on "qualified pollution exclusions" (QPEs) in the policies, which exclude coverage for pollution damage unless the discharge, dispersal, release, or escape of pollutants was "sudden and accidental" or caused by a "sudden, unintended and unexpected happening."
Montrose sought to introduce extrinsic evidence (industry drafting history and statements to state regulators) to argue that "sudden" means only "unexpected" or "unintended," without any temporal (abrupt) requirement. The trial court excluded the evidence, citing prior appellate decisions holding that "sudden" unambiguously requires abruptness and is the antonym of "gradual."
Legal Analysis
Montrose petitioned for a writ of mandate to reverse the evidentiary ruling. The California Court of Appeal upheld the exclusion due to binding precedent rejecting the exact interpretation that Montrose advanced.
The primary legal issues involved included the following.
Citing California Supreme Court decisions, the court reaffirmed that extrinsic evidence is provisionally admissible if relevant to prove a meaning to which the policy language is reasonably susceptible, even if the language appears unambiguous on its face. Drafting history and industry materials may be considered for standardized provisions, but only if they tend to prove a susceptible meaning.
A term judicially construed as unambiguous is generally treated as unambiguous unless the parties show contrary intent through evidence of a different but still reasonably susceptible meaning (Bartlome v. State Farm Fire & Cas. Co., 208 Cal. App. 3d 1235 (1989)). The doctrine does not absolutely preclude extrinsic evidence; it simply incorporates the prior construction unless rebutted by admissible evidence.
Uniform California appellate precedent holds that "sudden" includes a temporal element (abrupt or immediate onset). "Sudden" and "gradual" are antonyms; no objectively reasonable insured would expect "sudden" to cover gradual pollution.
The phrase "sudden and accidental" cannot reasonably be read to cover gradual, continuous discharges, regardless of intent or expectation. The trial court was bound to follow controlling appellate decisions. The California Court of Appeal, while not strictly bound by co-equal panels, independently agreed: "Gradual is the opposite of sudden." Extrinsic evidence offered solely to prove an unreasonable meaning is irrelevant and inadmissible.
Case Outcome and Significance
The writ was denied, and the trial court's evidentiary ruling was affirmed.
The decision reinforced decades of California's authority that "sudden" in qualified pollution exclusions requires temporal abruptness and excludes gradual pollution, limiting insureds' ability to use extrinsic evidence to relitigate settled interpretations of standard-form language is inappropriate.
Conclusion
No one likes to have a claim denied. A major corporation like Montrose has the ability to litigate insurance policy interpretation when faced with major losses like those resulting from pollution. In this case, the pollution took place gradually over a period of years. Montrose sought an interpretation that "sudden and accidental" was limited to "accidental" only to find multiple Supreme Court decisions defining "sudden" to include a temporal effect and that it was the opposite of "gradual" even when not intended. Insurance policies that contain clear and unambiguous language supported by multiple precedential rulings cannot be revisited, and extrinsic evidence cannot be used to change the precedents.
© Barry Zalma 2026
Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.