- Federal Court In Florida Looks Beyond Underlying Complaint To Find Pollution Exclusion Buy Back Was Not Triggered
- November 28, 2012 | Author: George B. Hall
- Law Firm: Phelps Dunbar LLP - New Orleans Office
federal court in Florida looked beyond the allegations in an underlying complaint to find that an exception, or “buy back,” to a pollution exclusion did not apply to suit for bodily injuries from carbon monoxide exposure. Composite Structures, Inc. v. Continental Ins. Co., 2012 WL 4867990 (M.D. Fla. Oct. 12, 2012).
A yacht manufacturer was sued by two seamen after they allegedly suffered injuries from exposure to carbon monoxide fumes while working aboard a yacht and sought a declaration that its CGL insurer had a duty to defend and indemnify. The parties cross-moved for summary judgment. The insurer claimed that the allegations in the underlying complaint fell within the policy’s pollution exclusion and that the buy back did not apply because undisputed facts outside the complaint established the following circumstances that did not permit the application of the buy back: the manufacturer learned of the emissions and the seamen’s exposure more than 72 hours after it commenced and failed to report the incident to the insurer within 30 days. The manufacturer did not dispute these facts, but alleged that the insurer had a duty to defend because the underlying complaint was silent as to such facts.
The district court granted the insurer’s motion for summary judgment and denied the manufacturer’s motion. Although the court recognized the general rule that the duty to defend is based solely on the underlying complaint, it held that the case fell squarely within the exception to the rule where the underlying pleading would not be expected to disclose the facts necessary to determine the duty to defend. The court reasoned that neither of the underlying causes of action required a plaintiff to allege the specific date on which he informed the manufacturer of his injuries or the specific date on which the manufacturer notified the insurer. Accordingly, the court, taking into account the extrinsic evidence, found that the manufacturer failed to meet the requirements of the exception to the pollution exclusion and that the exclusion applied.