On December 23, 2015 the United States Court of Appeals Fifth Circuit Judges Davis, Barksdale and Dennis filed a ruling affirming a lower courts decision that the Evanston Insurance Company is not obligated to honor insurance policies with the spray foam manufacturer Lapolla Industries and defend Lapolla in a lawsuit brought by Michael and Kimberly Commaroto of Connecticut. The Commarotos filed the lawsuit after they were forced to move permanently out from their home after spray foam insulation was installed there.
The reason: Pollution exclusions.
The decisions notes:
…the policies at issue include total pollution exclusion that excludes coverage for:
(1) “Bodily Injury” or “property damage” which would not have occurred in whole or part but for the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants at any time.
. . . .
Pollutants mean any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, electromagnetic fields and waste. Waste includes materials to be recycled, reconditioned or reclaimed.
The decision goes on to note the summary of the operative facts of the Commaroto complaint provided by the district court:
The plaintiffs’ operative pleading alleges that vapors from the SPF insulation caused their bodily injuries and property damage. According to the second amended complaint, the defendants “failed to seal off completely areas in which vapors could be transported from the areas under renovation and construction to the existing area of the house[,] in which the Commarotos, their three minor children, and their houseguest, Schlegel, were living and sleeping during the construction process.” (Docket Entry No. 24, ¶ 30). As a result, the plaintiffs allegedly suffered adverse health effects, incurred costs in investigating and remediating the situation, and suffered property losses in the form of personal belongings affected by the vapor and their inability to use their newly renovated home. (See id., ¶¶ 31 (describing the failure to contain “vapors” from the SPF insulation), 38 (alleging a “strong odor” and “symptoms of respiratory distress”), 41 (“respiratory distress”)…
The judges then state:
A plain reading of the complaint shows that all of the plaintiffs’ injuries, both personal injury and property damage, were alleged to have been caused by “pollution” as defined by the policies.
Going somewhere unexpected, Lapolla’s attorneys raise the “asbestos” word.
On appeal, Lapolla has attempted to refine its position, arguing: “To be sure, the Commarotos could still argue that although the `unsafe and dangerous’ SPF may not pose a health risk, like asbestos, left undisturbed, it may still negatively affect the value of their home.”
The judges conclude:
We conclude, essentially for the reasons set out in that opinion as supplemented above, that Evanston is entitled to a judgment declaring that Evanston owes no duty to defend Lapolla in the Commaroto suit.