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<p class=MsoNormal>Hi everyone, <o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal>During our last meeting, Fred Dudley asked that I compare
Judge Bucklew’s recent May 17 summary judgment order (wherein she found
that the pollution exclusion to a commercial general liability policy does not
apply in Chinese drywall context) to Judge Fallon’s December 16, 2010 order
on motions to dismiss (also finding that the pollution exclusion does not apply
in a homeowner’s policy). To my knowledge, Judge Fallon has not
heard oral arguments on Neal Sivyer’s motion in a commercial general
liability context. <o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal>Judge Fallon considered several motions to dismiss brought
by various insurers wherein thy argued that the homeowners’ insurance
policies excluded coverage for losses caused by pollution or
contamination. He applied a three-step analysis used by the Louisiana Supreme
Court in <i>Doerr v. Mobil Oil Corp. i</i>n determining that the pollution
and/or contamination exclusions did not bar coverage. The <i>Doerr </i>considerations
are: (1) whether the insured is a “polluter” within the meaning of
the exclusion; (2), whether the injury-causing substance is a pollutant; and
(3) whether there was a “discharge, dispersal, seepage, migration,
release, or escape” of a pollutant by the insured. <o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal>In applying the <i>Doerr </i>considerations, Judge Fallon
found that: (1) the homeowners did not constitute polluters “under any
sense of the word;” (2) whether the Chinese drywall is a pollutant is at
best a factual issue; and (3) whether there was a “discharge, dispersal,
seepage, migration, release, or escape” is also a fact issue.
Therefore, based on these considerations, Judge Fallon found that the pollution
exclusion did not apply. <o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal>Here is a summary of the order (a copy of which is
attached):<o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoListParagraph style='margin-left:1.0in;text-indent:-.25in;
mso-list:l0 level2 lfo2'><![if !supportLists]><span style='mso-list:Ignore'>a.<span
style='font:7.0pt "Times New Roman"'> </span></span><![endif]>ORDER
& REASONS on various carriers’ motions to dismiss complaints for
homeowners insurance coverage<o:p></o:p></p>
<p class=MsoListParagraph style='margin-left:1.5in;text-indent:-1.5in;
mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo2'><![if !supportLists]><span
style='mso-list:Ignore'><span style='font:7.0pt "Times New Roman"'>
</span>i.<span style='font:7.0pt "Times New Roman"'>
</span></span><![endif]>Damage caused by CDW meets definition of covered loss;<o:p></o:p></p>
<p class=MsoListParagraph style='margin-left:1.5in;text-indent:-1.5in;
mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo2'><![if !supportLists]><span
style='mso-list:Ignore'><span style='font:7.0pt "Times New Roman"'>
</span>ii.<span style='font:7.0pt "Times New Roman"'>
</span></span><![endif]>Policy Exclusions<o:p></o:p></p>
<p class=MsoListParagraph style='margin-left:2.0in;text-indent:-.25in;
mso-list:l0 level4 lfo2'><![if !supportLists]><span style='mso-list:Ignore'>1.<span
style='font:7.0pt "Times New Roman"'> </span></span><![endif]>Carriers
did not meet burden of proving applicability of latent defect exclusion;<o:p></o:p></p>
<p class=MsoListParagraph style='margin-left:2.0in;text-indent:-.25in;
mso-list:l0 level4 lfo2'><![if !supportLists]><span style='mso-list:Ignore'>2.<span
style='font:7.0pt "Times New Roman"'> </span></span><![endif]>Pollution
exclusion does not apply;<o:p></o:p></p>
<p class=MsoListParagraph style='margin-left:2.0in;text-indent:-.25in;
mso-list:l0 level4 lfo2'><![if !supportLists]><span style='mso-list:Ignore'>3.<span
style='font:7.0pt "Times New Roman"'> </span></span><![endif]>Dampness,
water vapor, temperature extreme exclusion does not apply;<o:p></o:p></p>
<p class=MsoListParagraph style='margin-left:2.0in;text-indent:-.25in;
mso-list:l0 level4 lfo2'><![if !supportLists]><span style='mso-list:Ignore'>4.<span
style='font:7.0pt "Times New Roman"'> </span></span><![endif]><b>Faulty
materials exclusion excludes coverage for damages caused by CDW</b><o:p></o:p></p>
<p class=MsoListParagraph style='margin-left:2.0in;text-indent:-.25in;
mso-list:l0 level4 lfo2'><![if !supportLists]><span style='mso-list:Ignore'>5.<span
style='font:7.0pt "Times New Roman"'> </span></span><![endif]><b>Corrosion
exclusion excludes coverage for damages resulting from corrosion caused by CDW</b><o:p></o:p></p>
<p class=MsoListParagraph style='margin-left:1.5in;text-indent:-1.5in;
mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo2'><![if !supportLists]><span
style='mso-list:Ignore'><span style='font:7.0pt "Times New Roman"'>
</span>iii.<span style='font:7.0pt "Times New Roman"'>
</span></span><![endif]>Ensuing loss exception to coverage exclusions (provides
coverage for covered losses not excluded by faulty materials and corrosion
exclusions)<o:p></o:p></p>
<p class=MsoListParagraph style='margin-left:2.0in;text-indent:-.25in;
mso-list:l0 level4 lfo2'><![if !supportLists]><span style='mso-list:Ignore'>1.<span
style='font:7.0pt "Times New Roman"'> </span></span><![endif]>Loss
caused by odor of drywall is not ensuing loss – no coverage<o:p></o:p></p>
<p class=MsoListParagraph style='margin-left:2.0in;text-indent:-.25in;
mso-list:l0 level4 lfo2'><![if !supportLists]><span style='mso-list:Ignore'>2.<span
style='font:7.0pt "Times New Roman"'> </span></span><![endif]>Loss
caused by corrosive properties of drywall is not ensuing loss – no
coverage<o:p></o:p></p>
<p class=MsoListParagraph style='margin-left:2.0in;text-indent:-.25in;
mso-list:l0 level4 lfo2'><![if !supportLists]><span style='mso-list:Ignore'>3.<span
style='font:7.0pt "Times New Roman"'> </span></span><![endif]>Court
grants carriers’ motions with respect to ensuing losses since plaintiffs
allege no ensuing losses in the complaints, however, court does not preclude
homeowners from seeking coverage under ensuing loss provisions if secondary
losses occur in the future (i.e., loss caused by fire due to corroded
electrical wiring)<o:p></o:p></p>
<p class=MsoListParagraph style='margin-left:1.5in;text-indent:-1.5in;
mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo2'><![if !supportLists]><span
style='mso-list:Ignore'><span style='font:7.0pt "Times New Roman"'>
</span>iv.<span style='font:7.0pt "Times New Roman"'>
</span></span><![endif]>Coverage for Other Losses<o:p></o:p></p>
<p class=MsoListParagraph style='margin-left:2.0in;text-indent:-.25in;
mso-list:l0 level4 lfo2'><![if !supportLists]><span style='mso-list:Ignore'>1.<span
style='font:7.0pt "Times New Roman"'> </span></span><![endif]>No
coverage for <b>personal property loss</b> b/c only certain perils covered of
which CDW is not included<o:p></o:p></p>
<p class=MsoListParagraph style='margin-left:2.0in;text-indent:-.25in;
mso-list:l0 level4 lfo2'><![if !supportLists]><span style='mso-list:Ignore'>2.<span
style='font:7.0pt "Times New Roman"'> </span></span><![endif]>No
coverage for <b>Loss of use of home</b> to the extent the policy does not
provide coverage for such losses <o:p></o:p></p>
<p class=MsoListParagraph style='margin-left:2.0in;text-indent:-.25in;
mso-list:l0 level4 lfo2'><![if !supportLists]><span style='mso-list:Ignore'>3.<span
style='font:7.0pt "Times New Roman"'> </span></span><![endif]>No
coverage for <b>personal injury</b> to the extent the policy does not provide
coverage for such loss<o:p></o:p></p>
<p class=MsoListParagraph style='margin-left:2.0in;text-indent:-.25in;
mso-list:l0 level4 lfo2'><![if !supportLists]><span style='mso-list:Ignore'>4.<span
style='font:7.0pt "Times New Roman"'> </span></span><![endif]>No
coverage for <b>additional living expenses</b> to the extent the policy does
not provide coverage for such losses<o:p></o:p></p>
<p class=MsoListParagraph style='margin-left:2.0in;text-indent:-.25in;
mso-list:l0 level4 lfo2'><![if !supportLists]><span style='mso-list:Ignore'>5.<span
style='font:7.0pt "Times New Roman"'> </span></span><![endif]>No
coverage for <b>diminished value</b> to the extent the policy does not provide
coverage for such losses <o:p></o:p></p>
<p class=MsoListParagraph style='margin-left:1.5in;text-indent:-1.5in;
mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo2'><![if !supportLists]><span
style='mso-list:Ignore'><span style='font:7.0pt "Times New Roman"'>
</span>v.<span style='font:7.0pt "Times New Roman"'>
</span></span><![endif]>No bad faith denial of coverage, breach of duty of good
faith, or misrepresentation<o:p></o:p></p>
<p class=MsoListParagraph style='margin-left:1.5in;text-indent:-1.5in;
mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo2'><![if !supportLists]><span
style='mso-list:Ignore'><span style='font:7.0pt "Times New Roman"'>
</span>vi.<span style='font:7.0pt "Times New Roman"'>
</span></span><![endif]>Plaintiffs’ Valued Policy Law Claims dismissed<o:p></o:p></p>
<p class=MsoListParagraph style='margin-left:1.5in;text-indent:-1.5in;
mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo2'><![if !supportLists]><span
style='mso-list:Ignore'><span style='font:7.0pt "Times New Roman"'>
</span>vii.<span style='font:7.0pt "Times New Roman"'>
</span></span><![endif]>Court did not award Plaintiffs the injunctive relief
requested (preventing carriers from canceling policies, raising rates, etc.)<o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal>In Judge Bucklew’s order, she ruled that the pollution
exclusion in a commercial general liability context did not apply where the
“pollutants” at issue did not arise while the insured was
performing operations. She relied on <i>Scottsdale Ins. Co. v.
American Safety Indemnity Co</i>, wherein the court there held “the plain
language of the Pollution Exclusion limits its reach to a pollutant releases at
locations where the insured contemporaneously performs operations, rather than
pollutant releases at locations where the insuered performed operations
earlier.” A copy of Judge Bucklew’s order is also attached
for your use.<o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal>Please let me know if you have any questions. <o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal><span style='color:black'>Ty G. Thompson<o:p></o:p></span></p>
<p class=MsoNormal><span style='color:black'>Board Certified Construction
Attorney</span> | <span style='color:black'>Mills Paskert Divers</span><o:p></o:p></p>
<p class=MsoNormal><span style='color:black'>100 North Tampa Street, Suite 2010
| Tampa, Florida 33602</span><o:p></o:p></p>
<p class=MsoNormal><span style='color:black'>813-769-4802 (direct) |
813-229-3500 (firm) | 813-229-3502 (facsimile)</span><o:p></o:p></p>
<p class=MsoNormal><a href="blocked::http://www.mpdlegal.com/"
title="http://www.mpdlegal.com/"><span style='color:navy'>www.mpdlegal.com</span></a>
<o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
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attachments are private communications sent by a law firm, Mills Paskert
Divers, and may contain confidential or legally privileged information meant
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<p class=MsoNormal><o:p> </o:p></p>
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