Factory Insurance Coverage When Fire Originated from Desired Products of Tire-Recycling Process and Not Its Waste

In Mid-Continent Casualty Co. v. Safe Tire Disposal Corp., 16 S.W.3d 418 (Tex. App. 2000) "unintended" fire at a factory that processed scrap tires began in a wire pile and spread to some rubber chips, which produced "huge volumes of thick, black smoke" that permeated the surrounding area. Mid-Continent, 16 S.W.3d at 420. Residents of the area around the facility filed suit, alleging "damage and injury that was proximately caused by the inhalation and proximity to the smoke from Defendants' factory fire." Mid-Continent, 16 S.W.3d at 420. At the time of the fire, the factory was covered under a general commercial liability policy, which provided coverage for "bodily injury" or "property damage" that resulted from a fire. Mid-Continent, 16 S.W.3d at 420. the policy contained a pollution exclusion, stating that coverage was not provided for "bodily injury" or "property damage" arising out of the release or escape of pollutants' " " 'at or from any premises, site or location which is or was at any time used by or for any insured or others for the handling, storage, disposal, processing or treatment of waste.' " Mid-Continent, 16 S.W.3d at 420. The policy also included a "hostile fire" exception to the pollution exclusion, which reinstated coverage unless the fire originated from any-premises used by the insured for " 'the handling, storage, disposal, processing, or treatment of waste.' Mid- Continent, 16 S.W.3d at 420. Under the policy, the term "waste" included:" 'materials to be recycled, reconditioned or reclaimed.' " Mid-Continent, 16 S.W.3d at 424. The court found that the term "waste," as defined in Merriam-Webster's Collegiate Dictionary, encompassed only unwanted by products and, because "the rubber chips and wire from which the fire in this case originated are the desired products of the tire-recycling process" and did "not constitute 'waste' under the policy," held that the factory was covered under the insurance policy. Mid-Continent, 16 S.W.3d at 424.