A recent insurance coverage decision from the United States District Court for the Northern District of Georgia highlights the difficulties of court interpretation of insurance policies and serves as a warning for contractors regarding application of the Absolute Pollution Exclusion in a General Liability Policy. The case involves injuries sustained by Joel Edgar Love Jr. arising out of construction dust. Love Lang v. FCCI Insurance Company, 530 F.Supp.3d 1299 (N.D. Ga 2021). The procedural history of this case is complicated by the fact that there were several different actions filed with the ultimate insurance coverage issue determination being made in an action where Mr. Love’s Estate was pursuing coverage from a general contractor’s insurer following an agreed order against the contractor. For purposes of the instant analysis, we will not focus on the intricacies of the procedural history of the various cases but will focus on the facts of the underlying injury, the policy language at issue, and the ultimate coverage decision by the Court.
In August 2013, a construction crew removed bricks from the façade of an apartment building apartment unit by drilling a row of holes in the grout between the bricks, and then cutting the holes together to remove the brick. The work caused clouds of dust to enter the apartments. It was undisputed that the dust “did not contain any toxic or particularly harmful material, the dust did not contain within it any particular known irritants, contaminants, toxins or poisons, and the dust did not contain any lead or asbestos.” It was also undisputed that exposure to the dust “would not necessarily be dangerous and would not automatically result in injury to an individual with healthy lungs.” Mr. Love, however, did not have healthy lungs; he had end-stage emphysema, and Mr. Love was hospitalized after the construction work outside his apartment produced clouds of dust that accumulated in his unit.
Mr. Love complained to the workers about the dust and its effect on his health, and Mr. Love sued the building owner and the construction company, in state court. The construction company was insured by Defendant FCCI Insurance Company (“FCCI”) but FCCI denied coverage based on the Policy’s “Total Pollution Exclusion,” which provided: “This insurance does not apply to: (1) ‘Bodily injury’ or ‘property damage’ which would not have occurred in whole or part but for the actual, alleged, or threatened discharge, dispersal, seepage, migration, release, or escape of ‘pollutants’ at any time.” The Policy defines “pollutant” as “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.”
The issue before the Court in the coverage litigation was whether the construction dust at issue constitutes a “pollutant” within the meaning of the Policy, and thus, whether the construction dust was a “solid, liquid, gaseous or thermal irritant or contaminant.” In construing an insurance policy under Georgia law, a court will first determine whether the policy language is clear and unambiguous. If a policy is ambiguous, any ambiguities are strictly construed in favor of the insured and any exclusions, such as the Absolution Pollution Exclusion, should be construed strictly in favor of coverage. Finally, ambiguous policies should be interpreted in accordance with the reasonable expectations of the insured.
The Love Lange court considered decisions from the Georgia Supreme Court and the Georgia Court of Appeals to construe the language of the Absolution Pollution Exclusion at issue. In the relevant Supreme Court cases, carbon monoxide gas and lead paint were held to be “pollutants” under identical policy language. In the Court of Appeals cases, however, natural gas and nitrogen were held not to be pollutants. Specifically, the Court of Appeals held that natural gas was not an irritant or a contaminant because “exposure to natural gas is not necessarily dangerous and does not automatically result in injury” and it would “violate public policy to allow the insurer to sell a liability policy to cover a company whose main product is natural gas when that policy contains an exclusion for damages resulting from such natural gas.” Similarly, another Georgia Court of Appeals case held that nitrogen was not “unambiguously a ‘pollutant’” because “nitrogen is present in large quantities in the ambient air” and the insured, which “was in the business of storing tissue at low temperature using liquid nitrogen, reasonably expected that liability related to a nitrogen leak would be insured.”
Applying those Georgia Supreme Court and Court of Appeals cases to the construction dust at issue in Love Lange could have resulted in a determination that the bodily injury caused by construction dust was a covered claim – because the dust, like natural gas and nitrogen, did not contain any toxic or particularly harmful material, unlike carbon monoxide and lead paint. Instead, the Love Lange court held, “‘a cloud of dust, even absent toxicity or other impurities, is a substance that was an ‘irritant’ and a ‘contaminant’ to Mr. Love and his respiratory system.” (emphasis added). In short, the Love Lange court did not interpret the policy based on application of the policy language and whether construction dust itself was an irritant or a contaminant but focused on whether the construction dust was annoying or irritating to a particular plaintiff. In so doing, the Love Lange court’s broad interpretation of the Absolute Pollution Exclusion might abrogate coverage for any byproduct of construction, which could always be interpreted as an irritant or contaminant to any particular plaintiff.
The Love Lange court entered its order at summary judgment; no notice of appeal was filed, and the underlying lawsuit has been dismissed by the parties. It is not clear whether any other courts will follow the Love Lange analysis, but it is likely that insurers will cite the Love Lange decision to support future denials of coverage for claims of bodily injury or property damage arising from dust which is a frequent product of the construction process. To guard against a potential gap in coverage created by the Absolute Pollution Exclusion in general liability policies, a contractor could consider procuring an Environmetal Liability policy which may bridge that gap.