A federal court in Texas held that insurers had no duty to defend an insured against a wrongful death suit based upon pollution exclusions in their policies, but denied summary judgment with respect to the duty to indemnify as a factual question existed regarding the decedent’s actual cause of death.  Acadia Ins. Co. v. Jacob and Martin, Ltd., et al., 2014 WL 2217399 (N.D. Tex. May 28, 2014).

The insured contracted to design and install a new sewer system.  While working on the project, a subcontractor opened a manhole, climbed inside and removed a plug connected to the sewer line.  When the plug was removed, the subcontractor was overwhelmed with methane gas, which caused his death.  The polices contained a pollution exclusion for bodily injuries resulting from a release of any gaseous contaminant, including fumes.  The insurers sought a declaration that they had no duty to defend or to indemnify the insured.

The insured did not dispute that methane is a “pollutant” as defined by the policies, but attempted to introduce extrinsic evidence demonstrating that the subcontractor may have died from a lack of oxygen, rather than methane inhalation.  The court would not consider extrinsic evidence because the cause of the subcontractor’s death went to the merits of the underlying litigation.  The court held that the policies and the underlying petition were sufficient to hold there was no duty to defend.  But the court found that there was a genuine issue of material fact as to the cause of death and whether it falls outside the pollution exclusion contained in the policies, and denied summary judgment as to the duty to indemnify.