Pollution Exclusion Bars Coverage for Carbon Monoxide Death: Latest Pro-Insurer Result in Series of Pollution Exclusion Cases Meagher & Geer Has Handled for Clients

Case: Church Mutual Insurance Co. v. Clay Ctr. Christian Church, et al., No. 13-1613, 2014 WL 1181608 (8th Cir. Mar. 25, 2014) (to be published). To read the full opinion, click here.

A minister's estate and widow brought a wrongful death and injury claim against an insured church 21 months after the minister was fatally overcome by carbon monoxide in the rectory and the widow suffered bodily injuries. After the insurer issued a reservation of rights and started a declaratory action, the claimants entered into an assignment agreement with the church, which consented to judgment collectible only from the church's insurance policy. Applying Nebraska law, the United States Court of Appeals for the Eighth Circuit held that the pollution exclusions in a general liability policy and an umbrella policy preclude coverage for bodily injury and death caused by carbon monoxide released from a heating system in a private home.

The court held that the words "irritant" and "contaminant," as used in the definition of "pollutants," are unambiguous, and that carbon monoxide is a contaminant and therefore a "pollutant" within the meaning of the exclusion. According to the Eighth Circuit, because the interpretation of an insurance policy is a question of law, the district court did not abuse its discretion in excluding expert testimony regarding the meaning of the words "irritant" and "contaminant."

The claimants argued that the insurer's reservation of rights 21 months after the incident, when a claim was finally made, estopped the insurer from relying on the pollution exclusion. In rejecting that argument, the court reasoned that the agreement in which the insured confessed judgment and assigned its rights under the insurance policies in exchange for the claimants' agreement to proceed only against the insurer relieved the insured of any legal exposure, and thus defeated the estoppel claim because there was no prejudice to the insured.

Meagher & Geer lawyers Christian A. Preus and Anthony J. Alt represented Church Mutual.

This is only one in a series of recent pollution exclusion cases where Meagher & Geer lawyers, as part of their national insurance coverage practice, have obtained successful results for their client insurers in several different jurisdictions.

In Midwest Family Mutual Insurance Co. v. Wolters, 831 N.W.2d 628 (Minn. 2013), the Supreme Court of Minnesota held that a pollution exclusion precluded coverage for carbon monoxide poisoning allegedly caused by a general contractor's negligence. To read the full opinion, click here. Meagher & Geer lawyer, Laura J. Hanson, as local counsel, presented a brief in support of the insurance company on behalf of The Complex Insurance Claims Association.
In Scottsdale Indemnity Co. v. Village of Crestwood, 673 F.3d 715 (7th Cir. 2012), the Court of Appeals for the Seventh Circuit agreed with Meagher & Geer attorneys Bradley M. Jones and Anthony J. Alt that, under Illinois law, pollution exclusions in 22 insurance policies barred coverage for defense costs and $50 million in policy-limits exposure in response to claims that the insured Village of Crestwood, Illinois, had provided contaminated drinking water to its residents for more than twenty years, constituting traditional environmental contamination, even though the Village was not the original polluter. To view the opinion, please click here.

In Scottsdale Insurance Co. v. Universal Crop Protection Alliance, LLC, 620 F.3d 926, 928 (8th Cir. 2010), the Court of Appeals for the Eighth Circuit, applying Minnesota law, ruled in favor of Meagher & Geer's client, affirming an order holding that the policy's pollution exclusion relieved the insurer from the duty to defend and indemnify its insured, a chemical manufacturer, in underlying litigation involving allegations that the insured's herbicides (2,4-D) destroyed crops. To read the full opinion, click here. Meagher & Geer lawyer Robert E. Salmon represented Scottsdale Insurance.

In Continental Casualty Co. v. Advance Terrazzo & Tile Co., Inc., 462 F.3d 1002 (8th Cir. 2006), the Court of Appeals for the Eighth Circuit, applying Minnesota law, ruled in favor of Meagher & Geer's client, affirming an order holding that the policy's pollution exclusion relieved the insurer from the duty to defend and indemnify its insured, a terrazzo floor contractor, in the underlying litigation involving allegations that the insured's operation of a terrazzo floor grinder generated carbon monoxide, causing bodily injury to another contractor at the job site. To read the full opinion, click here. Meagher & Geer lawyer Robert E. Salmon represented Continental Casualty Company.

Established in Minneapolis in 1929, Meagher & Geer has earned a reputation as one of the leading litigation defense and insurance coverage firms in the Upper Midwest. With 80 lawyers in 20 practice areas, and from offices in Minneapolis, Minnesota and Phoenix, Arizona, we represent insurers, businesses of all sizes, public entities, non-profit organizations, and individuals. Our trial lawyers have taken more than 105 cases to verdict since 2007. During the same period, our appellate lawyers have handled more than 120 appeals in state and federal courts. At last count we represented more than 125 of the leading insurance companies in the U.S., and we also handle work for insurers based in London, Canada, and Bermuda.

Some of our lawyers are licensed in one or more states other than Minnesota and Arizona, including California, Georgia, Iowa, Illinois, Montana, Nebraska, New Jersey, New York, North Dakota, South Dakota, Texas, Utah, Virginia, and Wisconsin.

Christian A. Preus

Tel.

612.347.9182

cpreus@meagher.com

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Anthony J. Alt

Tel. 612.337.9673

aalt@meagher.com

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Bradley M. Jones

Tel. 612.347.9196

bjones@meagher.com

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Robert E. Salmon

Tel. 612.347.9172

rsalmon@meagher.com

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Laura J. Hanson
Tel. 612.347.9192
lhanson@meagher.com

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Disclaimer: This communication is published as an information service for clients and friends of the firm, and is made available with the understanding that it does not constitute the rendering of legal advice or other professional service. Some jurisdictions require that we label this material "Attorney Advertising." Any discussion of prior results does not guarantee a similar outcome.