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Insurance Policy’s Pollution Exclusion Bars Coverage for Carbon Monoxide Poisoning

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The United States Court of Appeals for the Eleventh Circuit, applying Georgia law, held a commercial general liability (“CGL”) policy containing a pollution exclusion barred coverage for injuries following carbon monoxide poisoning.  Scottsdale Ins. Co. v. Pursley, 2012 WL 3553405 (August 20, 2012).

Sheryl Simpson-Jones and her husband Christopher Jones (“Plaintiffs”) hired Richard Pursley (“Pursley”), a boat mechanic, to repair their boat.  The Plaintiffs allege Pursley negligently performed repairs on their boat, which allowed for exhaust from an onboard generator to enter the boat’s engine room and ultimately into other parts of the boat, including the sleeping quarters. One night following Pursley’s repairs, Christopher Jones turned on the generator to operate the boat’s air conditioner and then went to sleep. He died that night of carbon monoxide poisoning.

Pursley tendered his defense to his insurer, Scottsdale Insurance Company (“Scottsdale”).  Scottsdale filed this declaratory judgment action seeking a declaration that it had no obligation to defend or indemnify Pursley due to the policy’s total pollution exclusion.  The District Court ruled in favor of Scottsdale, this appeal followed.

On appeal, the Plaintiffs argued that the claim fell outside of the total pollution exclusion and the District Court’s application of the exclusion violated Georgia public policy.  The Eleventh Circuit disagreed, noting that the Georgia Supreme Court held in Reed v. Auto-Owners Insurance Co., 284 Ga. 286 (2008), that the pollution exclusion language was not only aimed at traditional conventional environmental pollution but also excluded coverage for carbon monoxide poisoning.  In finding the underlying facts of the Plaintiffs’ claims analogous to those in Reed, the Eleventh Circuit ruled in favor of Scottsdale holding that the pollution exclusion applied to bar coverage following carbon monoxide poisoning.