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Laura Foggan Discusses Pollution Exclusion Ruling in Minnesota Carbon Monoxide Case

Law360
June 5, 2013

Laura A. Foggan, chair of Wiley Rein’s Insurance Appellate Group, was quoted in a June 3 Law360 article about a Minnesota Supreme Court ruling that a general liability policy’s pollution exclusion bars coverage for carbon monoxide released inside a home by a negligently installed boiler.

Deciding in favor of the insurer, a majority of the court said May 31 that carbon monoxide qualifies as a pollutant under the terms of the absolute pollution exclusion. It refused to limit the exclusion to “traditional environmental pollution.” In Midwest Family Mutual Insurance Co. v. Michael D. Wolters, et al. Ms. Foggan is counsel for the Complex Insurance Claims Litigation Association, a trade group of property casualty insurers that filed an amicus brief in support of Midwest Family.

The court disagreed with the appellants’ argument that a reasonable policyholder would not have understood that carbon monoxide was exempt from coverage under the absolute pollution exclusion. The reasonable expectations doctrine does not apply in this case because the pollution exclusion clause was plainly designated in the policy, the court majority said.

The ruling will be important within Minnesota because it rejected the appellants’ attempt to expand the reasonable expectations argument, Ms. Foggan told Law360. The decision may help insurers in other types of coverage disputes, she added.

“The court makes clear that the reasonable expectations doctrine has a very narrow application in Minnesota,” Ms. Foggan said. “The lesson here is that there definitely are many courts that will apply the pollution exclusion’s plain terms.”