Galloway Johnson Tompkins Burr & Smith attorneys secured a summary dismissal in Louisiana, with James Prather and Frances McGinnis exemplifying the result-driven representation that has made Galloway a premier insurance defense firm in the Gulf South.
Plaintiff/Named Insured owned and operated a convenience store and gas station. During a delivery of gasoline, the driver erroneously pumped approximately 164 gallons of gasoline into the observation well or Release Detection Device rather than into the Underground Storage Tank. Plaintiff alleged this resulted in the spill and contamination of gasoline at his property. Plaintiff further alleged it was required to close its sale of fuel and report the spill to the Louisiana Department of Environmental Quality and EPA, and had to contract with a fuel spill company to attempt to remove and clean up the fuel spill and contamination. Plaintiff filed a lawsuit against its Insurer, the fuel company, and the fuel company’s insurer. The lawsuit alleged damages of loss of revenue, business interruption, loss of value to its property, and costs and expenses for testing, removal, and remediation of contamination of the fuel spill.
The Insured never filed a claim with its insurer. The Insurer’s first notice of the claim was the lawsuit filed by the Insured. Our client, the Insurer, issued an insurance policy to the Plaintiff/Named Insured, containing a Commercial General Liability Coverage Form and a Building and Personal Property Coverage Form. The Insurer was facing exposure under the CGL for potential environmental contamination and under the Building policy for the insured’s alleged damage to property, environmental clean-up costs, and business interruption. James and Frances reviewed coverage and recommended disclaiming coverage and indemnity.
Coverage was excluded under the CGL under the Total Pollution exclusion (“TPE”) added by endorsement and the Damage To Property exclusion. The Damage to Property exclusion excludes coverage to “[p]roperty you own, rent, or occupy, including any costs or expenses incurred by you … for repair, … restoration or maintenance of such property for any reason, including prevention of injury to a person or damage to another’s property.” In addition to adding the TPE, the policy contained an endorsement defining “pollutants” which definition included petroleum, gasoline, and fuel oil. Over twenty years ago, the Louisiana Supreme Court set forth three factors for the applicability of a pollution exclusion. All were met here: (i) the owner of a UST is a polluter; (ii) gasoline is a pollutant; and (iii) there was a discharge, dispersal, seepage, release and/or escape of a pollutant.
There was no coverage under the Building and Personal Property policy. The policy was not triggered for the alleged damage to the Insured’s land. Covered property does not include “other paved surfaces” or “[l]and (including land on which the property is located), water …” Furthermore, coverage was excluded by the pollution exclusion, which contains an exception. The exclusion provides “[w]e will not pay for loss of damage caused by or resulting from … [d]ischarge, dispersal, seepage, migration, release or escape of ‘pollutants’ unless the discharge, dispersal, seepage, migration, release or escape is itself caused by any of the ‘specified causes of loss.’” “‘Specified cause of loss’ means the following: fire; lightning; explosion; windstorm or hail; smoke; aircraft or vehicles; riot or civil commotion; vandalism; leakage from fire-extinguishing equipment; sinkhole collapse; volcanic action; falling objects; weight of snow, ice or sleet; water damage.”
The exception to the pollution exclusion did not apply—the discharge, dispersal, release or escape of the gasoline was not caused by any of the “specified causes of loss.” The vehicle did not cause the spill. The truck was merely used to transport the gasoline. Coverage, including the limited additional coverage for Pollutant Clean-up and Removal, was excluded.
The exclusion from coverage for “[d]elay, loss of use or market” served to exclude coverage for the Insured’s claim of loss of revenue and business interruption.
James and Frances moved for summary judgment based upon these coverage defenses. The trial court agreed, granting summary judgment dismissing the Insured’s claims and suit with prejudice, declaring that the alleged property damage did not trigger the Commercial Property Coverage Part of the policy, and that coverage was clearly and unambiguously excluded under the CGL and Commercial Property Coverage Part of the policy.
Galloway values collaborating with its clients, working way above and way beyond, and achieving winning results together.