Insurer Has No Duty in Georgia Lead Paint Suit

By Peter Hayes

March 21 — A pollution exclusion relieves an insurer of the duty to defend claims that a child ingested lead-based paint in a rental property owned by the policyholder, the Georgia Supreme Court ruled March 21.

Lead-based paint unambiguously qualifies as an excluded “pollutant” under an absolute pollution exclusion in the policy, the court ruled in a case of first impression.

“Today’s decision follows a majority view and trend,” Laura Foggan with Wiley Rein LLP in Washington told Bloomberg BNA March 21. Foggan was of counsel to the Complex Insurance Claims Litigation Association as an amicus curiae in this appeal.

“I do think there is a clear trend in favor of enforcing the pollution exclusion as written, without any `traditional pollution' limitation,” she said. “As this court explained, there is no basis for such a limitation in the policy language and the exclusion has been applied to many substances and fact settings outside traditional hazardous waste cleanup.”

Counsel for the plaintiff Jonathan Johnson, with Jonathan W. Johnson LLC in Atlanta, however, said the decision is very unusual.

“In my research, only three states have adopted this approach with regard to lead paint, while 20 have gone the other way,” Johnson told Bloomberg BNA.

“It's a harsh ruling and out of line with other states, but it's consistent with the court's own precedent,” he said.

The exclusion bars coverage for bodily injury or property damage resulting from exposure to any “pollutant,” which it defines as “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.”

As a result, Georgia Farm Bureau Mutual Insurance Co. has no duty to defend Bobby Chupp against allegations by Amy Smith that her daughter suffered permanent injury from the ingestion of lead-based paint in the house she rented from Chupp, the court said.

The court cited its ruling in Reed v. Auto-Owners Ins. Co., 2008 BL 221797 (Ga. 2008), finding carbon monoxide gas to be a “pollutant.”

Reversing an appeals court ruling in favor of the policyholder, the court said “the contractual language of Chupp’s CGL policy unambiguously governs the factual scenario in this case. Accordingly, the court of appeals was required to simply apply the terms of the contract as written.”

Chief Justice Hugh P. Thompson wrote the unanimous opinion.

Jonathan W. Johnson LLC in Atlanta, Childers, Schlueter & Smith LLP in Atlanta and Turkheimer & Hadden, LLC in Atlanta represented the plaintiffs.

James Bates Brannan Groover LLP represented the insurer.

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