{"id":524,"date":"2024-10-30T10:42:39","date_gmt":"2024-10-30T14:42:39","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/insurancelaw\/?p=524"},"modified":"2024-10-30T10:42:40","modified_gmt":"2024-10-30T14:42:40","slug":"fungi-and-pollution-exclusions-foreclose-duty-to-defend-wrongful-death-suit","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/insurancelaw\/2024\/10\/30\/fungi-and-pollution-exclusions-foreclose-duty-to-defend-wrongful-death-suit\/","title":{"rendered":"Fungi and Pollution Exclusions Foreclose Duty to Defend Wrongful Death Suit"},"content":{"rendered":"\n

By: Daniel B. Heidtke<\/a><\/strong><\/p>\n\n\n\n

Facing claims that it \u201callowed a dangerous substance\u2014mold\u201d to grow in a resident\u2019s apartment, an insured sought coverage under its \u201cbusinessowners insurance\u201d coverage.  In denying a duty to defend the underlying wrongful death suit, the insurer relied on two exclusions: (1) the \u201cFungi or Bacteria Exclusion\u201d and (2) the Pollution Exclusion.  After analyzing the plain meaning of both exclusions, the U.S. District Court for the Northern District of Georgia agreed with the insurer, held that it owed no duty to defend the insured, and granted the insurer\u2019s motion for judgment on the pleadings.<\/p>\n\n\n\n

The court began by applying basic principles under Georgia law.  It noted, \u201c[i]f the terms of the insurance contract are plain and unambiguous, the Court must \u2018simply [] apply [them] as written, regardless of whether doing so benefits the carrier or the insured.\u2019\u201d  Reed v. Auto Owners Ins. Co.<\/em>, 284 Ga. 286, 287 (2008).  \u201cThis rule holds even for policy exclusions, which \u2018must be given effect\u2019 when unambiguous, \u2018even if \u2018beneficial to the insurer and detrimental to the insured.\u2019\u201d  Cont\u2019l Cas. Co. v. Winder Lab\u2019ys, LLC<\/em>, 73 F.4th 934, 941 (11th Cir. 2023) (quoting Fid. Nat\u2019l Title Ins. Co. of N.Y. v. OHIC Ins. Co.,<\/em> 275 Ga. App. 55, 57 (2005)).<\/p>\n\n\n\n

The policy provided coverage for sums \u201cthat the insured becomes legally obligated to pay as damages because of \u2018bodily injury\u2019\u201d to which the insurance applies.  \u201cBodily injury\u201d includes \u201cbodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.\u201d  In \u201cany suit\u201d seeking damages covered by the policy, the insurer has a \u201cduty to defend the insured.\u201d  The court then turned to the relevant exclusions.<\/p>\n\n\n\n\n\n\n\n

The policy\u2019s Fungi or Bacteria Exclusion excluded coverage for bodily injury arising out of a \u201cfungi or bacteria incident.\u201d  That \u201cincident\u201d was defined to mean:<\/p>\n\n\n

an incident which would not have occurred, in whole or in part, but for the actual, alleged or threated inhalation of, ingestion of, contact with, exposure to, existence of, or presence of, any \u2018fungi\u2019 or bacteria on or within a building or structure, including its contents, regardless of whether any other cause, event, material or product contributed concurrently or in any sequence to such injury or damage.<\/p>\n\n\n

The policy defined \u201cfungi\u201d to include \u201cany type or form of fungus, including mold or mildew[.]\u201d<\/p>\n\n\n\n

The court held that the Fungi or Bacteria Exclusion applies.  It explained, \u201c[t]he Underlying Complaint\u2019s allegations\u2014that mold at least in part caused Decedent\u2019s bodily injury\u2014unambiguously exclude the incident from coverage\u201d and thus relieve the insurer of its duty to defend the suit.  Rejecting the insured\u2019s argument that the underlying complaint created an ambiguity, the court explained that even though \u201cthe Underlying Complaint does make five references to \u2018mold and\/or other toxic substances,\u2019 these vague and occasional references to \u2018other toxic substances\u2019 are not sufficient to create the ambiguity [the insured seeks to present. The repeated and specific references to mold throughout the entirety of the Underlying Complaint make clear that the Underlying Complaint alleges that mold at least in part caused Decedent\u2019s illness.\u201d<\/p>\n\n\n\n

The court held that the Pollution Exclusion also applied.  The policy\u2019s Pollution Exclusion excluded coverage for any bodily injury \u201carising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of \u2018pollutants[.]\u2019\u201d  The court found that the underlying complaint\u2019s repeated reference to \u201cmold and other toxic substances\u201d as causing the decedent\u2019s injuries  \u201cclearly qualife[d]\u201d as an \u201cirritant or contaminant\u201d under the Pollution Exclusion.  The court also rejected the insured\u2019s argument that interpreting \u201cmold\u201d as \u201cpollutant\u201d would render the Fungi or Bacteria Exclusion meaningless.  The court held that Georgia law \u201cinstruct[s] \u2026 that exclusions in insurance policies are to be read independently of one another such that no exclusion \u2018can properly be regarded as inconsistent with another exclusion, since they bear no relationship with one another.\u2019\u201d  Fid. Nat\u2019l Title<\/em>, 275 Ga. App. at 58 (citing Weedo v. Stone-E-Brick, Inc.,<\/em> 405 A.2d 788, 795 (N.J. 1979)); Nautilus Ins. Co. v. Chiaha Guild of Arts & Crafts, Ltd<\/em>., 2024 WL 2785316, at *3 (N.D. Ga. Mar., 7, 2024).<\/p>\n\n\n\n

Decided by U.S. District Judge Thomas W. Thrash, the case is Nationwide Property & Casualty Ins. Co. v. Hampton Court, L.P., et al.<\/em>, Cas No. 1:23-cv-4726.<\/p>\n","protected":false},"excerpt":{"rendered":"

By: Daniel B. Heidtke Facing claims that it \u201callowed a dangerous substance\u2014mold\u201d to grow in a resident\u2019s apartment, an insured sought coverage under its \u201cbusinessowners insurance\u201d coverage.  In denying a duty to defend the underlying wrongful death suit, the insurer relied on two exclusions: (1) the \u201cFungi or Bacteria Exclusion\u201d and (2) the Pollution Exclusion.  … <\/p>\n

Continue reading “Fungi and Pollution Exclusions Foreclose Duty to Defend Wrongful Death Suit”<\/span><\/a><\/p>\n","protected":false},"author":243,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[308,57,270,484,12,19,483,183],"ppma_author":[431],"class_list":["post-524","post","type-post","status-publish","format-standard","hentry","category-general","tag-daniel-heidtke","tag-duty-to-defend","tag-exclusion","tag-georgia","tag-insurance","tag-insurance-coverage","tag-mold","tag-pollution"],"authors":[{"term_id":431,"user_id":243,"is_guest":0,"slug":"dbheidtke","display_name":"Daniel B. Heidtke","avatar_url":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-content\/uploads\/sites\/12\/2024\/10\/Danny-Heidtke-LinkedIn-6249-e1729870422263-100x100.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-json\/wp\/v2\/posts\/524","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-json\/wp\/v2\/users\/243"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-json\/wp\/v2\/comments?post=524"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-json\/wp\/v2\/posts\/524\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-json\/wp\/v2\/media?parent=524"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-json\/wp\/v2\/categories?post=524"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-json\/wp\/v2\/tags?post=524"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-json\/wp\/v2\/ppma_author?post=524"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}