Total Pollution Exclusion And Indoor Air Pollution Exclusion Do Not Apply To Indoor Carbon Monoxide Poisoning
In Century Surety Co. v. Casino West, Inc., 2010 U.S. Dist. LEXIS 19807 (D. Nev., March 4, 2010), the court addressed whether the total pollution exclusion and a separate indoor air exclusion applied to all indoor air pollution. In Century Surety, four people were killed by carbon monoxide poisoning when vapors from the motel’s pool heater room permeated their room because air intake vents had been blocked.
The insurer first argued that its pollution exclusion applied. There was an exception to the exclusion for injury “sustained within a building and caused by . . . vapor . . . from equipment used to heat that building.” The insurer argued that the presence of the exception indicated that all instances of indoor air pollution not within the exception were excluded. The court reviewed cases from other jurisdictions finding both that the pollution exclusion should be limited to instances of traditional environmental pollution, and that the exclusion applied to indoor air pollution. The court decided that “an ordinary policyholder may not reasonably characterize carbon monoxide emitted from a motel pool heater as pollution.” The court also rejected the insurer’s argument that the presence of the exception would indicate to a reasonable policy holder that other types of indoor air pollution are excluded.
The policy also had a separate exclusion for injury “arising out of, caused by, or alleging to be contributed to in any way by any toxic, hazardous, noxious, irritating, pathogenic or allergen qualities or characteristics of indoor air, regardless of cause.” The court found this exclusion ambiguous because “the exclusion can also be reasonably construed as applying only to ongoing air quality issues that result from biological organisms, asbestos or silica.” Since the court found the exclusion ambiguous, it did not apply to the circumstances before the court.
Please comment on "Nautlius Ins. Co. v. Country Oaks Apartments, 566 F.3d 452(5th Cir.2009), which heald the emission of carbon monoxide from a furnace into an apartment unambiquously satisfies the pollution exclusion's requirement of the"discharge..."of a pollutant. (article is in IRMI.com."CGL Pollution Exclusion Bars Coverage for Injury from Carbon Monoxide Released from Heater", dated 12/2009. (Believe one of your associates-Thorpe-had an article several years back on this subject. Thanks. Dennis Gambill, consultant
Dennis,
Thanks for your comment. Courts have not uniformly interpreted the pollution exclusion when applying it to non-traditional environmental pollution. The judge in the District of Nevada case did seem to strain what should be a reasonable interpretation of the policy provisions, especially the separate exclusion for indoor air pollution. The Fifth Circuit's decision in the Nautilus case rejected a number of decisions that would have limited the definition of "pollutant." The Nevada case would simply be added to that list. I think that the two cases show that despite the long history of the pollution exclusion, courts have still not reached a uniform interpretation, or even a uniform method for interpretation, of the exclusion.
Thanks,
Diane