[While Coverage Opinions likes to kid around, the following summary involves a real case. You can look it up. 2014 U.S. Dist. LEXIS 59278]
I have been a student of the pollution exclusion for many years. I can’t even begin to imagine how many pollution exclusion cases I have read. I recently mentioned in Coverage Opinions [Vol. 3, Iss. 2 (January 29, 2014)] that one of the reasons why the pollution exclusion is such an interesting issue, and the subject of so much commentary, is that the substances under consideration are so varied and sometimes quirky. Over the past three decades or so it seems that courts have addressed whether just about anything and everything is a “pollutant” for purposes of the exclusion. Claudia Catalano’s A.L.R. article – which is more accurately described as a phonebook – on the pollution exclusion – “What Constitutes ‘Pollutant,’ ‘Contaminant,’ ‘Irritant,’ or ‘Waste’ Within Meaning of Absolute or Total Pollution Exclusion in Liability Insurance Policy” – contains an index of substances that have been presented to courts for their answer to this question. The index lists in the range of 260 entries -- and include every letter of the alphabet except J. Many of the substances under consideration seem somewhat strange in the context of a discussion of the pollution exclusion (which is, of course, a fundamental debate in so many of the cases). Pollution exclusion cases have addressed such things as the smell of curry, the smell of a deli, bat guano, noise and light and trespassers.
When considering all of the substances that have been the subject of pollution exclusion cases, I now know what stands at the top of the strangeness mountain. The answer lies in Chestnut Associates, Inc. v. Assurance Company of America, No. 13-1755 (M.D. Fla. Apr. 29, 2014) [enhanced version available to lexis.com subscribers]. Here we go.
The Jansens filed suit in Florida state court against Chestnut Associates for damages allegedly caused when Chestnut’s pool service technician came to their house to service the swimming pool. I’ll let the court take over the factual recitation from here. “Jansen alleges that ‘the pool service technician removed all of his clothes and entered the pool naked. The technician then ‘sexually pleasured himself in the pool’ and ‘brought this sexual behavior to conclusion by casting ejaculate into [Jansen’s] pool.’ Jansen alleges that Chestnut's ‘pool service technician intended and knew or should have known that emotional distress would likely result of [Jansen] as a result of this subject behavior. Jansen seeks damages for emotional distress, mental anguish, embarrassment, humiliation, loss of dignity and diminution of the value of his house. The only cause of action alleged in the underlying complaint is for intentional infliction of emotional distress.”
Assurance Company of America issued a general liability policy to Chestnut Associates. Coverage litigation arose. [Chestnut maintained that there was no coverage dispute because the underlying complaint was not being prosecuted. Nonetheless, because the underlying case was still listed as open on the court records, the court went ahead and addressed the pending motions.]
The court addressed several issues, including the insurer’s argument that the Pollution Exclusion (“bodily injury” arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of “pollutants”) applied because the Jansens alleged that damages were caused by the contamination of their swimming pool by a “pollutant,” the pool service technician’s ejaculate.
While the Chestnut Associates court’s discussion of the issue was not in-depth, it noted that courts have held that, under Florida law, natural bodily substances can be “pollutants” where they satisfy the definition in an insurance policy. This seemed to be all that the court needed to conclude that “[t]he damages the Jansens allege in the underlying complaint arise out of the release of a ‘pollutant’ in the Jansens’ swimming pool.”
It may be that the Chestnut Associates court’s discussion of the pollution exclusion was not in-depth because it concluded that, for other reasons too, no coverage was owed. For example, the court held that there was no allegation of “property damage” in the underlying complaint as the only damages alleged were economic losses from the alleged diminution of the value of the property; the alleged intentional acts are not an “occurrence,” despite the absence of allegations “that anyone was at home at the time of the alleged incident, that the pool service technician intended to be or that he was being watched while he engaged in the purported conduct, or that the pool service technician knew that security cameras were recording his alleged conduct”; and the pool service technician was not an insured under the policy as he was not performing acts within the scope of his employment.
The pollution exclusion has certainly grown-up from its initial versions in the 1970s that were designed to address the harms associated with environmental pollution.
Coverage Opinions is a bi-weekly (or more frequently) electronic newsletter reporting or providing commentary on just-issued decisions from courts nationally addressing insurance coverage disputes. Coverage Opinions focuses on decisions that concern numerous issues under commercial general liability and professional liability insurance policies. For more information visit www.coverageopinions.info.
The views expressed herein are solely those of the author and not necessarily those of his firm or its clients. The information contained herein shall not be considered legal advice. You are advised to consult with an attorney concerning how any of the issues addressed herein may apply to your own situation. Coverage Opinions is gluten free but may contain peanut products.
Randy Maniloff is Counsel at White and Williams, LLP in Philadelphia. He previously served as a firm Partner for seven years and transitioned to a Counsel position to pursue certain writing projects including Coverage Opinions . Nonetheless he still maintains a full-time practice at the firm. Randy concentrates his practice in the representation of insurers in coverage disputes over primary and excess obligations under a host of policies, including commercial general liability and various professional liability policies, such as public official’s, law enforcement, educator’s, media, computer technology, architects and engineers, lawyers, real estate agents, community associations, environmental contractors, Indian tribes and several others. Randy has significant experience in coverage for environmental damage and toxic torts, liquor liability and construction defect, including additional insured and contractual indemnity issues. Randy is co-author of “General Liability Insurance Coverage - Key Issues In Every State” (Oxford University Press, 2nd Edition, 2012). For the past twelve years Randy has published a year-end article that addresses the ten most significant insurance coverage decisions of the year completed.
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