A federal court in Louisiana granted an insurer’s motion for summary judgment holding the insurer had no duty to indemnify or defend against a “legacy” oilfield claim because the policy’s pollution exclusion and various exclusions for damage to property precluded coverage. Evanston Ins. Co. v. Riceland Petroleum Co., 2019 U.S. Dist. LEXIS 53830 (W.D. La. Mar. 28, 2019).

Landowners sued the insured for damage caused by the insured’s oil and gas operations which allegedly polluted the plaintiffs’ property. The insured sought coverage under its primary and excess policies, and the insurer filed a complaint for declaratory relief and moved for summary judgment. The insurer argued that coverage was not triggered and that any coverage, if afforded, was excluded by the pollution exclusion and various exclusions for damage to property.

The court granted the insurer’s summary judgment motion. The court held that the pollution exclusion applied after finding all three factors of the Doerr test articulated by the Louisiana Supreme Court had been satisfied: (1) the insured was a “polluter” based on the nature of and risk posed by its business; (2) the injury-causing substances allegedly released by the insured were “pollutants”; and (3) the insured released these “pollutants.” The court also held that coverage was barred pursuant to exclusions for damage to property the insured owns, rents or occupies; property loaned to the insured; and real property on which the insured is performing operations because the insured damaged the plaintiffs’ property while conducting oil and gas operations pursuant to mineral leases on the property.