In Scottsdale Insurance Co. v. Pursley, Slip Copy, 2012 WL 3553405 (11th Cir. Aug. 20, 2012), the U.S. Court of Appeals for the 11th Circuit rejected an attempt to limit the application of a commercial general liability policy’s total pollution exclusion to traditional, environmental pollution.
In Scottsdale, Sheryl Simpson-Jones (Simpson-Jones) and her husband, Christopher Jones (Jones), hired Richard Pursley to repair their boat. Pursley completed the repair, but neglected to cover the exhausts for the starboard engine after he was done. After the Joneses retook possession of their boat, Jones turned on its generator to operate the boat’s air conditioner. The generator and starboard engine shared a common exhaust vent, and carbon monoxide filled the boat’s cabin, kitchen, and sleeping quarters, where Jones had fallen asleep. Jones died of carbon monoxide poisoning, and Simpson-Jones filed a wrongful death claim against Pursley.
Scottsdale had issued a commercial general liability policy to Pursley covering liabilities arising out of his mobile marine engine repair business. The policy, however, contained a total pollution exclusion that precluded coverage for “‘bodily injury’ … which would not have occurred in whole or in part but for the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of ‘pollutants’ at any time.” The policy defined “pollutants” to mean “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.” Scottsdale filed a declaratory judgment action against Simpson-Jones in Georgia federal district court. The court, in granting Scottsdale’s motion for judgment on the pleadings, determined that the total pollution exclusion in Scottsdale’s policy precluded coverage for Jones’ death. Simpson-Jones appealed, arguing that the district court’s application of the exclusion disregarded the historical purpose of the pollution exclusion to preclude coverage for traditional environmental pollution. Rejecting Simpson-Jones’ argument, the 11th Circuit noted that the Georgia Supreme Court held in Reed v. Auto-Owners Insurance Co., 667 S.E.2d 90, 91 (Ga. 2008), that there was “no language in the policy supporting restricting application of the exclusion to traditional environmental pollution.” Therefore, the 11th Circuit affirmed the district court’s grant of Scottsdale’s motion for judgment on the pleadings.