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Connors v. Zurich Am. Ins. Co.

Court of Appeals of Wisconsin

June 12, 2015, Submitted on Briefs; October 15, 2015, Decided; October 15, 2015, Filed

Appeal No. 2014AP2990

Opinion

 [*P1]  [**531]  [***111]    BLANCHARD, J. Patrick Connors alleges that a foundry where he had been employed negligently allowed bacteria to be dispersed or released into the air, that he inhaled some of these bacteria while visiting the foundry, and that this resulted in illness causing bodily injury. Connors filed this direct action against the foundry's insurer. The circuit court granted summary judgment to the insurer after concluding that a pollution exclusion provision contained in the foundry's insurance policy bars coverage for Connors' alleged injuries. The court concluded that the bacteria allegedly dispersed or released by the foundry and inhaled by Connors were "contaminants," which are defined to be "pollutants" under the pollution exclusion.

 [*P2]  [**532]   We conclude that the pollution exclusion in the foundry's policy, which is considerably more detailed than the standard pollution exclusion in many commercial general liability policies, is ambiguous on the question of whether the bacteria [****2]  are "pollutants" in the context of the occurrence alleged here. The exclusion is ambiguous in this context because the bacteria are not obviously in the nature of the commercial or industrial products or byproducts specified in the pollution exclusion, and therefore a reasonable insured could expect coverage. Accordingly, we reverse the summary judgment and remand for further proceedings.1

BACKGROUND

 [*P3]  In the operative complaint, Connors makes allegations that include the following. Connors had been an employee of Grede Foundries of Reedsburg, Wisconsin, and hoped to return to work there, when he became ill and was diagnosed with pneumonia caused by exposure to the bacteria Legionella pneumophila.2  [**533]  An investigation by a federal agency showed that water in the foundry cooling towers contained Legionella pneumophila. These towers were "in proximity" to "fresh air intakes" at the foundry. During the pertinent time period, the foundry had [****3]  a liability insurance policy with Charter Oak Fire Insurance Company.3

 [*P4]  As pertinent here, the complaint alleges that the foundry "was negligent in not properly maintaining its cooling towers, and other water sources," which "allowed for the growth of legionella pneumophila"  [***112]  and Connors' exposure to the bacteria, which resulted in bodily injury to him.

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2015 WI App 89 *; 365 Wis. 2d 528 **; 872 N.W.2d 109 ***; 2015 Wisc. App. LEXIS 755 ****

PATRICK J. CONNORS, PLAINTIFF-APPELLANT, v. ZURICH AMERICAN INSURANCE COMPANY, GREDE FOUNDRIES HEALTH PLAN BY ITS THIRD PARTY ADMINISTRATOR ANTHEM BLUE CROSS AND BLUE SHIELD AND DEF INSURANCE COMPANY, DEFENDANTS, CHARTER OAK FIRE INSURANCE COMPANY, DEFENDANT-RESPONDENT.

Prior History:  [****1] APPEAL from a judgment of the circuit court for Sauk County: GUY D. REYNOLDS, Judge. Cir. Ct. No. 2012CV471.

Disposition: Reversed and cause remanded for further proceedings.

CORE TERMS

pollution exclusion, bacteria, pollutants, coverage, endorsement, contaminant, Legionella, reasonable insured, ambiguous, insured, terms, occurrence, byproducts, irritant, mist, summary judgment, industrial, foundry, inhaled, provisions, interpretations, vapor, air, insurance policy, includes, products, policy language, unambiguously, vapor-borne, pesticides

Civil Procedure, Summary Judgment, Entitlement as Matter of Law, Genuine Disputes, Legal Entitlement, Materiality of Facts, Appeals, Summary Judgment Review, Standards of Review, Insurance Law, Policy Interpretation, Ambiguous Terms, Construction Against Insurers, Claim, Contract & Practice Issues, Ordinary & Usual Meanings, Plain Language, Commercial General Liability Insurance, Exclusions, Pollution, Exclusions, Entire Contract, General Overview