Legionella Bacteria not a Pollutant
February 19, 2013
The insurer brought an action against its insured for a declaratory judgment seeking to determine whether it had a duty to defend and indemnify the insured against a wrongful death claim. This case is Westport Insurance Corporation v. VN Hotel Group, 2012 WL 5262886. (Note that this case was not selected for publication in the Federal Reporter.)
After staying at the Quality Suites near Universal Studios, Walker, Cooper, and Wheatley contracted Legionnaires Disease. Walker died; Cooper and Wheatley survived but incurred extensive medical bills. Cooper and Wheatley filed a lawsuit against VN Hotels and Valerie Walker filed a wrongful death lawsuit as representative of her husband's estate. The complaints against the insured alleged that the guests contracted the disease through water in the shower or the outdoor spa. Eventually, Wheatley dismissed his claim, Cooper settled, and that left Walker's wrongful death lawsuit.
VN Hotel Group tendered that lawsuit to its insurer, Westport Insurance and the insurer filed a declaratory judgment action. The insurer claimed that it had no duty to defend or indemnify VN Hotel Group because the claim was not covered due to the pollution exclusion and the fungi or bacteria exclusion. The district court ruled in favor of the insured and the insurer appealed.
The Court of Appeals noted that the general liability policy excluded coverage for bodily injury arising out of the actual discharge, dispersal, release, or escape of pollutants. Pollutants were defined as any solid, liquid, gaseous, or thermal irritant or contaminant. The policy also excluded coverage for bodily injury that would not have occurred but for the actual inhalation of, ingestion of, contact with, exposure to, or presence of any fungi or bacteria on or within a building or structure.
The parties to the lawsuit acknowledged that Legionnaires Disease is caused by inhaling the legionella bacteria that is found naturally in water. So the court said it had to decide whether the legionella bacteria fall into any of the policy exclusions.
After reading the entire policy in context, the court agreed that if the bacteria were considered a pollutant, the fungi/bacteria exclusion would be meaningless. Because the policy includes a separate exclusion provision for bacteria, the legionella bacteria cannot be considered a pollutant under the terms of the policy. Therefore, the pollution exclusion does not apply.
As for the fungi/bacteria exclusion, the court found the exclusion to be inapplicable because the legionella bacteria did not occur on or within a building or structure. The parties agreed that Walker inhaled the bacteria at the outdoor spa and the court saw no reason to consider the outdoor spa as a building or structure. The court said that the term “building” modifies the term “structure” and shows that structure is to be narrowly construed.
The ruling of the district court was affirmed.
Editor's Note: The ruling of the United States Court of Appeals, Eleventh Circuit, that the legionella bacteria is not a pollutant is not out of the ordinary; other courts have decided the same thing. However, finding that an outdoor spa is not a structure is strange. The policy does not define “structure”, but the ordinary dictionary calls a structure “something that is constructed, something arranged in a definite pattern”. Black's Law Dictionary defines a structure as “any construction, or any production or piece of work artificially built up or composed of parts joined together in some definite manner, an edifice of any kind”. It seems that an outdoor spa would fit this description.