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Ohio Supreme Court Pollution Exclusion
Ohio Supreme Court Restricts the Scope of the Absolute Pollution Exclusion
Charlie Kingdollar, Stamford
On November 14, 2001, the Ohio Supreme Court joined the high courts of Indiana and Illinois in restricting the scope of the absolute pollution exclusion to "traditional environmental pollution" (Anderson v. Highland House Co. et al., 2001 Ohio St. 3d 547). In a case involving illness caused by, and wrongful death arising from, carbon monoxide fumes in the Highland House Apartments, the court reversed a decision by the Eighth District Court of Appeals the court ruled that carbon monoxide was not a "pollutant." In its finding, the court noted that "the absolute pollution exclusion was designed to bar coverage for gradual environmental degradation...and to preclude coverage responsibility for government-mandated cleanup[s]."
The court examined the drafting and filing history of both the sudden and accidental and the absolute pollution exclusions, as well as taking the "reasonable expectations of the insured" into account to support their decision. The court stated that "based on the history and original purposes for the pollution exclusion, it was reasonable for Highland House and RMI (the property manager which was also named as a defendant in the case) to believe that the policies purchased for their multi-unit complex would not exclude claims for injuries due to carbon monoxide leaks."
Rejecting the Indiana Insurance Company's argument that carbon monoxide is a "pollutant" because it is a "gaseous... irritant or contaminant" and is a "very toxic gas" The court found that carbon monoxide emitted from a malfunctioning residential heater "is not a 'pollutant' under the pollution exclusion of a comprehensive general liability policy unless specifically enumerated as such."
Other jurisdictions have ruled that the absolute pollution exclusion is not applicable to incidents occurring indoors, however, the Ohio high court's decision is more onerous in that it has found ambiguity in the definition of "pollutant" because of the generic terms employed in the pollution exclusion rather than attempting to list specific substances. A similar argument was made by the Indiana Supreme Court in its Kiger decision.
An earlier decision by, the Ohio Court of Appeals ruled that an absolute pollution exclusion does not preclude coverage for voluntary cleanup costs resulting from an accidental pollution release (Celina Mutual Ins. Co. v. Marathon Oil Co., OH App. 3rd Dist., Lexis 2453, June 8, 2000). The case involved a Marathon pipeline ruptured by a trenching contractor. The more recent high court decision seems to track with this decision with the majority of the panel stating that the absolute exclusion bars coverage for the costs of government mandated cleanups - leaving the question of voluntary cleanup costs open for further clarification.
In their 1998 revisions ISO amended the absolute pollution exclusion in their CGL policy exempting from the exclusion (i.e. giving back coverage for) bodily injury "if sustained within a building and caused by smoke, fumes, vapor or soot from equipment used to heat that building." Insurers using the 1998 form will no longer be denying claims like the one at issue based upon the absolute pollution exclusion.
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