Bacterial Contamination and the Pollution Exclusion in the CGL Form

An action for declaratory relief was the derivative of a state court action brought by Szabo against the Weizers as the owners and operators of Florida West Covered RV & Boat Storage. This case is Markel International Insurance Company v. Florida West Covered RV & Boat Storage, 2011 WL 3505217 (C.A.11).

 

Szabo was forced to wade through retained flood water to retrieve his personal property from a storage unit that he leased from Florida West. Szabo alleged that he contracted bacterial poisoning, a severe bacterial infection, and injury due to millings from roadwork that had mixed with the flood waters, and sued Florida West. The insured sought protection from its insurer, Markel, and the insurer then filed a declaratory judgment action.

 

The United States District Court granted summary judgment to the insurer because it found the absolute pollution exclusion applied. An appeal from the insured went to the Eleventh Circuit Court.

 

Florida West argued that the district court improperly relied on the dictionary definitions of “irritant” and “contaminant” without considering whether millings are irritants or contaminants under environmental regulations and case law from other jurisdictions. Florida West also argued that the court erred in even considering whether millings constituted a pollutant because the underlying complaint alleged that bacteria caused the infection. The appeals court did not agree with the insured.

 

The court pointed out that the complaint alleged that the water retention and flooding mixed with millings and this caused bacterial poisoning and injury. This to the court meant that the millings caused the infection rather than the bacteria. And the court agreed with the trial court that, pursuant to a reasonable reading of the complaint, millings mixed with flood water constituted a pollutant within the meaning of the absolute pollution exclusion. The court was of the opinion that using the dictionary definitions of “contaminant” and “irritant” in construing the exclusion was proper. The court also noted that it is a product's ability to produce an irritating effect that places the product within the policy's definition of an irritant, and subsequently a pollutant.

 

According to Szabo's complaint, he contracted bacterial poisoning and infection from millings that Florida West allowed to mix with flood water. The court found that, while millings may not inflict injury under normal circumstances, millings are alleged to have produced bacterial poisoning and infection, and these are certainly irritating effects. Thus, under the facts alleged in the complaint, the millings constituted a pollutant. The ruling of the district court was affirmed.

 

Editor's Note: There are two items to consider from this opinion by the Eleventh Circuit Court of Appeals.

 

First, the definition of a pollutant can be seen by different courts to mean different things. Some courts prefer a limited definition of pollutant, with reference only to environmental damage; others look at the definition of pollutant in the general liability policy and are of the opinion that it can mean anything that causes harm as a contaminant or irritant. To this court, a product's ability to produce an irritating effect or to cause harm makes that product a pollutant. What constitutes a pollutant is not a settled question.

 

Second, the insured in this case tried to emphasize the fact that the complaint did not actually use the words “irritant”, “contaminant”, “pollutant”, or “pollution” and so, the pollution exclusion was not applicable. The court, finding for the insurer, said coverage does not depend on artful pleading or the inclusion of certain “buzz words”. The facts stated in the complaint will determine an insurer's duty to defend, and the insurer is under no duty to defend if the allegations in the complaint implicate a policy exclusion. In this instance, the court found the pollution exclusion clearly applied.