Pollution Exclusion/FL App.shoke2013
Insurer Cannot Use Extrinsic Evidence to Demonstrate That Fire Suppression Foam is a “Pollutant” to Avoid Defense Obligation
A Florida appellate court, applying Florida law, ruled that an insurer must defend a policyholder that was alleged to have caused damage to airplanes from contact with its fire suppression foam. The court held that the lower court erred in weighing outside, or extrinsic, evidence to find that the insurer had no duty to defend based on the pollution exclusion.
The case stems from a failed foam fire suppressant system in an aircraft hangar that resulted in damage to several airplanes. Orion Jet Center LLC, the hangar’s owner, filed suit against Moss & Associates, LLC (“Moss”), the general contractor that constructed the aircraft hangar. Moss, in turn, filed a third-party complaint against Advanced Systems (“Advanced”), the subcontractor that installed the hangar’s fire suppression system. Advanced’s insurer, Gotham Insurance Company (“Gotham”), refused to fund Advanced’s defense under the commercial general liability policy issued in connection with Gotham’s Fire Suppression Insurance Program. Advance then sued Gotham in Florida state court.
The insurer moved for summary judgment four months later, asserting that the policy’s total pollution exclusion, which precluded coverage for property damage caused by the release of pollutants, freed it from any coverage obligations. The policy defined “pollutants” as “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste.” In support of its motion, Gotham included a declaration by a claims specialist who pointed to a data sheet detailing the chemical composition of “Chemguard C2,” which was purportedly the fire suppression foam that was released into the aircraft hangar. Based on that document, the trial court granted summary judgment, and concluded that the foam constituted a “pollutant” under the policy, thereby falling within the exclusion.
Advanced appealed, objecting to the use of the Chemguard C2 data sheet as unauthenticated evidence and beyond the scope to determine whether a duty to defend existed. The appellate panel agreed with Advanced.
Under Florida law, the general rule is that an insurer’s duty to defend is determined from the allegations in the complaint. However, under a narrow exception to that rule, courts may weigh extrinsic evidence if it is undisputed by both the insurer and policyholder. But here, Advanced “consistently contested the nature and composition of the released fire suppression foam.” As a result, the facts within the underlying suit against Advanced potentially fell within the policy’s coverage, and the trial judge “erred in relying on extrinsic evidence to determine that a duty to defend did not arise,” the panel held. Advanced Systems Inc. v. Gotham Insurance Co., No. 3D18-1744 (Fla. 3d DCA Apr. 17, 2019).