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Iowa's top court was asked June 22, 2005 in a toxic fumes case to
weigh in on
the unsettled question of how broad absolute pollution exclusion
clauses
should be interpreted in that state (Bituminous Casualty Corp. v.
Sand Livestock
Systems Inc., N.D. Iowa, No. C04-4028-PAZ, 06/22/05).
Certifying a question related to the breadth of such clauses to
the Iowa
Supreme Court, the U.S. District Court for the Northern District
of Iowa said no
Iowa courts have ruled definitively on whether absolute pollution
clauses go
beyond traditional environmental pollution to cover damages
related to
occupational exposure to toxic fumes.
The federal court noted that courts in other jurisdictions "have
reached a
dizzying array of results" in regards to the breadth of absolute
pollution
clauses and that both insurers, who favor reading such clauses
broadly, and
insureds, who favor a narrower reading, can find case law to
support their positions.
The district court said its certification to Iowa's top court is
the result
of its inability to predict how the state court would rule in a
case involving
damages related to a worker's death from carbon monoxide
poisoning.
Overcome by Carbon Monoxide Fumes
In 2002, an Iowa man, Raymond Gossage, was working in a hog
facility in Ida
County when he was overcome by carbon monoxide fumes. The fumes
were produced
by a propane power washer that had been installed in the facility
by its
operator, Sand Livestock Systems Inc.
Gossage subsequently died from his exposure, and his widow, Cori
A. Gossage,
filed a wrongful death suit in state court against Sand
Livestock.
Anticipating insurance claims related to Cori Gossage's suit,
Sand
Livestock's insurer, the Bituminous Casualty Corp., filed suit in
federal court, seeking
a declaration that it had no duty to either defend or indemnify
Sand
Livestock from the state action.
Moving for summary judgment, Bituminous argued that the scope of
the absolute
pollution exclusion clauses in the insurance policies issued to
Sand
Livestock barred coverage for toxic exposure-related claims like
the one involved in
Cori Gossage's suit.
Countering, Cori Gossage and Sand Livestock argued that the
pollution
exclusion clauses should be interpreted narrowly to bar from
coverage only damages
related to traditional acts of environmental pollution.
Exclusion Question Certified
After finding no on-point Iowa opinions and numerous varying
opinions from
non-Iowa courts, the federal court certified the following
question to the Iowa
Supreme Court: "Do the total pollution exclusions in the policies
issued by
Bituminous to Sand Livestock relieve Bituminous from any
obligation to defend or
indemnify Sand Livestock, or to pay damages to Mrs. Gossage, for
claims
arising out of the death of Raymond Gossage?"
In certifying the question, the district court noted that both
sides could
cite precedent in their favor from courts outside Iowa. In
particular, the court
noted, while at least two state supreme courts, Massachusetts and
Ohio, have
ruled that absolute pollution exclusion clauses should be read
narrowly not to
bar damage claims related to carbon monoxide exposure; two
federal courts,
interpreting how the top courts of Pennsylvania and the District
of Columbia
would rule, have held the opposite.
The Massachusetts and Ohio cases are W. Alliance Ins. Co. v.
Gill, 426 Mass.
115 (Mass. 1997) and Andersen v. Highland House Co., 93 Ohio St.
3d 547 (Ohio
2001).
The Pennsylvania and District of Columbia rulings are United
States Fidelity
& Guaranty Co. v. Lehigh Valley Ice Arena Inc., 121 Fed. Appx.
979 (3d Cir.
2005) and Nationwide Mut. Ins. Co. v. Nat'l. REO Mgmt. Inc., 205
F.R.D. 1
(D.D.C. 2000).
Timothy W. Hamann with Clark, Butler, Walsh & Hamann in Waterloo
represented
Bituminous Casualty Corp. Donald H. Molstad with the Molstad Law
Firm in Sioux
City represented Sand Livestock Systems Inc. Robert Allen Burnett
Jr. with
the Law Office of Robert A. Burnett Jr. in Des Moines represented
Cori Gossage.
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