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151447 - Charlie B Hobson v Indian Harbor Ins Co

Charlie B. Hobson and Mary L. Hobson,
Mark R. Bendure
(Appeal from Ct of Appeals)
(Wayne – McDonald, K.)
Indian Harbor Insurance Company, XL Insurance America, Inc., and XL Insurance Company of New York, Inc.,
Drew M. Broaddus
Wilson Investment Service & Construction, Inc., Wilson Investment Service, Crescent House Apartments, Crescent House Apartments, L.L.C., W-4 Family Limited Partnership, W-4 Family L.L.C., and James P. Wilson,


The plaintiffs allege that they were injured when a fire broke out in their apartment building, flooding their apartment with smoke. In this declaratory judgment action, they claim that the defendant Indian Harbor Insurance Company, which issued a commercial general liability insurance policy to the property owner, owes compensation to them for their injuries. Indian Harbor Insurance denied coverage based on its Total Pollution Exclusion Endorsement, and filed a motion for summary disposition.  The exclusion states that the insurance does not apply to “‘[b]odily injury’ or ‘property damage’ which would not have occurred in whole or part but for the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of ‘pollutants’ at any time.”  “Pollutants” is defined to include “smoke, vapor, soot, [and] fumes . . . .”  The trial court denied the motion, and the Court of Appeals affirmed in an unpublished opinion. The panel held that the alleged injuries were not caused by a pollutant; they arose from the negligence of the insured property owner, which resulted in a fire. Indian Harbor Insurance filed an application for leave to appeal to the Supreme Court. On December 9, 2015, the Supreme Court directed the Clerk to schedule oral argument on the application. The parties were asked to address:  “(1) whether the Total Pollution Exclusion Endorsement is ambiguous, and (2) whether there was a discharge, dispersal, seepage, migration, release, or escape of a pollutant that caused the plaintiffs’ injuries.”