The Fifth Circuit held that an insurer had no duty to defend based on the policy’s pollution exclusion where the complaint alleged only injury from vapors emitted from insulation installed in a residence. Evanston Insurance Co. v. Lapolla Industries, Inc., 2015 WL 9460301 (5th Cir. Dec. 23, 2015).
The insured manufactured spray polyurethane foam insulation which was installed in a home. Shortly thereafter, the homeowners and their house guest smelled odors and suffered respiratory distress, causing them to leave the residence. The homeowners sued the general contractor and various subcontractors for negligence and breach of contract. The contractors then filed a third-party complaint against the manufacturer who tendered its defense to its insurer. The insurer filed suit seeking a declaration that it had no duty to defend or indemnify pursuant to the policy’s pollution exclusion. The insured counterclaimed, and the parties cross moved for summary judgment. The district court held that the pollution exclusion precluded coverage.
On appeal, the Fifth Circuit affirmed. The homeowners argued that the harm occurred from both physical contact with and mere presence of the insulation. The Fifth Circuit rejected those arguments as the injury and claimed damages suffered by the homeowners were due solely to vapors emitted from the insulation regardless of characterization otherwise.