Peace v. Northwestern National Insurance Co.

Kevin Peace (plaintiff), a minor, lived with his mother in a rented apartment owned by Djukic Enterprises (Djukic). The Milwaukee health department inspected the building and found loose, peeling, flaking, and chipped lead paint. Djukic was ordered to remove the paint due to the risk of lead poisoning through ingestion or inhalation of fumes, dust, and chips. Lead poisoning can cause brain damage, developmental disorders, and kidney and liver disease. Six weeks later, Djukic purchased a general liability policy from Northwestern National Insurance (Northwestern) (defendant). The policy covered bodily injury and property damage but excluded coverage when the harm arose from the release of pollutants at the insured’s premises. Pollutants include solid, liquid, and gaseous irritants or contaminants, including fumes and chemicals. Peace experienced lead poisoning, and through his guardian ad litem, sued Djukic alleging negligence and statutory claims. Citing the pollution-exclusion clause, Northwestern denied a duty to defend Djukic and sought summary judgment releasing it. Djukic filed a cross-motion for summary judgment. The trial court found for Northwestern. The court of appeals affirmed, and then reversed following the Wisconsin Supreme Court’s decision in Donaldson v. Urban Land Interests. The supreme court granted Northwestern’s petition for review.