While Florida courts have typically refused to limit pollution exclusions within insurance policies to traditional environmental claims, a District Court in Florida has extended the application of such exclusions even further by finding that a pollution exclusion applies to claims against a bar for injuries allegedly caused by an “exotic” cocktail served by the bar.
In Evanston Insurance Company v. Haven South Beach, LLC, et al., Case No. 15-20573 (S.D. Fla. Dec. 28, 2015), the insured, a bar, served an alcoholic drink infused with liquid nitrogen to create a “smoky” effect. A patron sued the bar after allegedly sustaining injuries after drinking one of the smoky cocktails. The insured sought coverage for the suit from its insurer, who denied coverage based on a pollution exclusion to its policy. The exclusion barred coverage for bodily injury or property damage which would not have occurred but for “actual alleged or threatened discharge, dispersal, seepage, migration, release or escape of ‘pollutants’ at any time.” The policy defined the term “pollutant,” in part, as an “irritant or contaminant…”. The insurer argued that the pollution exclusion applied because the bar discharged, dispensed or released liquid nitrogen, a pollutant, which caused the alleged injuries. In response, the insured disputed that liquid nitrogen was a pollutant and claimed that its intentional placing of the liquid nitrogen in the cocktail did not constitute a release or escape of a pollutant.
In analyzing the coverage dispute, the District Court for the Southern District of Florida found that Florida courts have not limited the application of similar pollution exclusions to traditional environmental claims. The District Court further noted that, first and foremost, because the language of the exclusion was unambiguous, the plain meaning of the exclusion governs. Therefore, the District Court concluded that based on the plain meaning of the pollution exclusion, the exclusion was not limited to traditional environmental pollutants. The District Court further held that, because the pollution exclusion defined pollutant, in part, as any irritant or contaminant, and because it found that liquid nitrogen can cause irritation and the substance is defined as an irritant under OSHA regulations, the District Court concluded that liquid nitrogen was a pollutant within the meaning of the exclusion.
In deciding whether the insured had “discharged” the liquid nitrogen, the District Court looked to the dictionary definition of the term, which it found to be “put forth”. The District Court noted that the allegations in the underlying complaint clearly supported a finding that the insured put forth the liquid nitrogen into the injured party’s drink. Accordingly, the District Court found that the pollution exclusion applied to bar coverage to the insured for the patron’s bodily injury claim and that the insurer had no duty to defend or indemnify the insured bar for the claim.
This case is another in a string of decisions by courts applying pollution exclusions more expansively by finding that the exclusions apply to non-traditional environmental claims.