Declarations and Exclusions

Writers on the Storm

While this weblog has been on another of its practice-compelled hiatuses [hiati?], others have been vigorously pursuing the profusion of insurance issues flowing from Hurricanes Katrina and Rita.   For those who have not been following these stories and who want to catch up, here is a quick catalog of legal webloggers who are on the case.   

I'm providing pointers to posts that I particularly recommend, but your best approach with all of these weblogs would be to click through to the main page and just start scrolling downward in order to read everything these gentlemen have posted.

The Catalog

• Doug Stratton's Insurance Defense Blog, while headquartered in the vicinity of the District of Columbia, has been turning its attention south to good effect:

• Insurance Coverage for Katrina Losses -- Some Links [9/12/05]

• Mississippi Coverage Suits Still Brewing [10/4/05]

• History of Flood Insurance [10/8/05]

• Update on Coverage Suit By Mississippi Attorney General Jim Hood [10/17/05]

• Doug Simpson's Unintended Consequences is self-described as "weblog of research on the collision of law, networks and disruptive technologies," and the collision of wind, water and lawyers is proving plentifully disruptive:

• Flood Insurance and Exclusions, Proximate and Concurrent Causation [9/12/05]

• Subsidence, Old levees, Slow Government Response. Not New Orleans: California  [9/14/05]

• Possible Seminar: "Impacts of Insurance Subsidies on Public Safety" [9/15/05]

• Impact of Katrina on Gulf states' wind pools [9/17/05]

• Unintended Consequences of Flood Exclusion Avoidance Suits [9/17/05]

• Thoughts on Retroactive Flood Insurance Proposals [9/28/05]

• Martin Grace (with the able assistance of Ty Leverty) on the RiskProf weblog has been musing and commenting most productively:

• Where is Daniel Webster When You Need Him? [9/8/05]

• How to Destroy the Insurance Industry in the Gulf States [9/12/05]

• How to Destroy the Insurance Industry II [9/15/05]

• A Change is Needed [10/5/05]

Bonus Material:  Martin was among the panelists for the American Enterprise Institute's October 3 program on Katrina's Liability Implications, moderated by Ted Frank of Overlawyered and PointofLaw.com.  The link leads to the main page for the event, with further links to written materials and video.

• For a more personal view of Katrina's impact, be sure to follow Ernest Svenson -- Ernie The Attorney -- as he returns to New Orleans.

Dogged Determination

Part of the fun of practicing insurance coverage law is the opportunity to read appellate decisions that start like this:

“The cat will mew, and dog will have his day.” (Shakespeare, Hamlet, act 5, scene 1.) Here, Dwayne Vandagriff’s dog elected to have his day by biting Robert Grisham’s leg after escaping from Vandagriff’s parked pickup truck.

What is the coverage issue here? It is this: Does a dog bite occurring 20 to 25 feet away from the dog owner’s pickup truck, in which the dog has been left for between 30 and 120 minutes, “arise out of the use of” that truck, so as to be covered under the dog owner’s automobile insurance policy?

A surprisingly large number of California decisions have wrestled with similar questions. At its most basic, the question boils down to whether there is some identifiable causal connection between the way in which a vehicle has been used and the plaintiff’s injury. For instance, automobile coverage has been held to exist when a gun goes off inside a car as a result of a combination of its hair-trigger and the bouncing inherent in driving off-road. On the other hand, merely driving in a car to get to the scene of an otherwise unrelated criminal or tortious act has been held not to be covered. As for dogs: bites that occur inside the vehicle, when humans and dogs are sharing the space, or injuries that occur when humans and dogs both try to exit the vehicle simultaneously, may be covered by the auto policy. The Court of Appeal in this latest case, however, found that the dog bite was too far removed from the pickup truck in both time and space, and that the auto coverage does not apply. You cannot say the victim’s attorney didn’t try hard in a losing cause:

Finally, Grisham argues that Vandagriff was using his truck as a temporary pet storage, and this was a substantial rather than a trivial factor in causing Grisham’s injury. Grisham points to the water dish that Vandagriff left for the dogs in the pickup cab. One problem with this argument is that Grisham was not bit when the dogs were being stored in the vehicle. Of course, Grisham would say that’s the point --Vandagriff was negligently storing the dogs in the truck. Nevertheless, the temporary storage of the dogs in the truck is not much different from their transport in the truck. As we have seen, the transport of the dogs here is akin to the situation of transporting a tortfeasor who departs the vehicle and commits a tort; the tort is not considered to have resulted from the use of the vehicle. [Citations omitted.] . . . The fact remains, at the time of the biting, neither Grisham nor the dog had anything to do with Vandagriff’s truck; they were 20 to 25 yards away from it. The issue is not whether Grisham’s injury resulted from Vandagriff’s negligence, but whether that injury resulted from the use of Vandagriff’s truck.

We conclude that Grisham’s injury did not result from the use of Vandagriff’s truck.

The decision in State Farm Mut. Auto. Ins. Co. v. Grisham (Sept. 20, 2004), Case No. C045912, can be accessed at these links in PDF and Word formats. [Note: The links will expire in approximately 120 days; the opinion should still be accessible thereafter by substituting "archive" for "documents" in the URL.]

Molding a Consensus -- Pollution Exclusions and Mold Claims

Washington D.C.'s Dave Stratton on his Insurance Defense Blog provides a link to an in-depth article by Los Angeles attorney Jacqueline M. Jauregui on the interaction between mold claims and pollution exclusions. Here are the introductory paragraphs from that article:

Whether mold is a pollutant presents a question of considerable and pressing interest both to insurers and insureds who must deal with general policy forms that lack a mold exclusion but otherwise exclude pollution. Similarly, it poses coverage issues when insurers or insureds must deal with carriers who have incorporated specific pollution coverage without reference to mold losses. The frequency and cost of claims involving species of molds such as stachybotrys chartarum have become so high that insurers with both types of contracts need some certainty on this issue. Unfortunately, common parlance points in one direction while published opinions interpreting the pollution exclusion seem to suggest another. This anomaly creates tremendous uncertainty about the relationship between mold and pollution coverage and pollution exclusions.

To date, only two opinions, have evaluated the question whether mold is a pollutant. Both were decided in federal court at the district court level but both reached different conclusions. Thus, there is scant guidance from the courts on this issue.

With abundant footnotes, the article concludes that mold probably ought to be treated as a contaminant, but that courts may be hesitant as a practical matter to adopt that position. This is a costly issue for insurers, and one that is sure to generate further discussion.