Applying GA Law, Coverage for Welder’s Lung Claim Barred by Pollution Exclusion.

In an unpublished opinion, the Eleventh Circuit, applying Georgia law, affirmed a district court decision holding that a lung disease resulting from the inhalation of welding fumes fell within a policy’s pollution exclusion, because it qualified as an injury arising out of the release, escape or dispersal of a pollutant. 

John Flowers, an employee of Sandersville Railroad Company (“Sandersville”), sued his employer alleging he developed a lung disease called siderosis (welder’s lung) due to exposure to welding fumes during his employment. 

Sandersville tendered the claim to its insurer, Evanston Insurance Company (“Evanston”).  Evanston denied the claim, asserting that it fell within the policy’s pollution exclusion.  The pollution exclusion barred coverage for bodily injury “arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of ‘pollutants.’”  The policy did not define “discharge, dispersal, seepage, migration, release or escape.”  The policy defined “pollutants” as “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.”

Sandersville settled the claim with Flowers, without contribution by Evanston.  Evanston later sued Sandersville, seeking a declaration that the pollution exclusion barred coverage for the claim.  The district court agreed with Evanston, finding that Georgia law required a broad application of the pollution exclusion, irrespective of whether or not its original intent was to bar coverage for traditional environmental pollution.

In an unpublished opinion, the Eleventh Circuit agreed.  According to the appellate court, under its interpretation of Georgia law, if the substance to which Flowers was exposed constitutes a “pollutant” and such exposure was from the “discharge, dispersal, seepage, migration, release or escape” of the substance, the claim is barred.  Here, Flowers was exposed to discharged welding fumes, a “pollutant,” and, therefore, the claim was barred.

Sandersville argued that no reasonable insured would anticipate that the pollution exclusion, which was intended to bar coverage for traditional environmental pollution, would apply to this type of claim.  The appellate court, however, held that it was unable to consider the policyholder’s reasonable expectations, because the Georgia Supreme Court has held that the pollution exclusion is unambiguous and must be broadly interpreted and applied.  Only if the pollution exclusion was deemed ambiguous could the appellate court consider the policyholder’s reasonable expectations in interpreting its scope.  Evanston Ins. Co. v. Sandersville Railroad Co., No. 5:15-cv-00247-MTT (11^th Cir. Feb. 8, 2019).