In its recent decision in Maxine Furs, Inc. v. Auto-Owners Ins. Co., 2011 U.S. App. LEXIS 6706 (11th Cir. March 31, 2011), a case decided under Alabama law, the Eleventh Circuit closely aligned itself with the line of authority holding that the pollution exclusion is not limited to traditional environmental pollution.The insured, Maxine Furs, was a fur shop which shared an air-conditioning duct with an adjoining Indian food restaurant. Over time, the store’s fur inventory began to smell of curry. Maxine Fur’s subsequently had its affected furs cleaned and then filed a claim with its own insurer, Auto-Owners. Auto-Owners denied coverage for the cleaning costs based on its policy’s absolute pollution exclusion.
At issue in the subsequent coverage litigation was whether curry aroma qualified as a “pollutant,” defined by the policy, in part, as a “solid, liquid, gaseous or thermal irritant or contaminant.” The Eleventh Circuit relied on a reasonable expectations analysis to conclude that “[w]e do not think a person of ordinary intelligence could reasonably conclude that curry aroma is not a contaminant under these circumstances.” The court cited to a Webster’s dictionary definition of “contaminant” as something that “soil[s], stain[s], corrupt[s] or infect[s] by contact or association.” The court found it determinative that the curry aroma “soiled” the inventory of Maxine Furs. Thus, concluding that the aroma constituted a “pollutant” which migrated into the insured’s premises, the court agreed that the pollution exclusion in Auto-Owners’ policy applied.
There is only limited case law across the United States on the issue of whether odor constitutes a pollutant for the purpose of the “pollution exclusion.” Barney Greengrass, Inc. v. Lumbermans Mutual Cas. Co., 2010 U.S. Dist. LEXIS 78781 (S.D.N.Y. July 27, 2010) (odors emanating from a fish purveyor’s store not a pollutant); Tri-Municipal Sewer Commission v. Continental Ins. Co., 636 N.Y.S.2d 856 (2d Dep’t 1996) (odors emanating from a sewage plant fall within the pollution exclusion); Kent Farms, Inc. v. Zurich Ins. Co., 998 P.2d 292, 295 (Wash. 2000) (holding pollution exclusion applied to odors emanating from an industrial composting facility); Cold Creek Compost, Inc. v. State Farm Fire and Cas. Co., 68 Cal. Rptr. 3d 216 (Cal.App. 2007) (pollution exclusion applied to odors generated from composting facility). Ultimately, whether and to what extent a particular jurisdiction limits application of the pollution exclusion to “traditional environmental pollution” will largely determine whether a particular odor qualifies as a “pollutant” for the purpose of a pollution exclusion.
