| Q&A of the Week |
Deer Blood and the Pollution Exclusion
A Pennsylvania subscriber recently asked the following question:
We represent a church that had a deer jump through a sanctuary window resulting in physical and blood damage to the building, including pews and pew cushions. The deer eventually left the structure through another window in an adjacent school hallway. The church is covered under Special Form CP 10 30 06 07. The carrier has put us on notice that they may attempt to deny the deer blood damage under the pollution exclusion. Does this exclusion apply to the deer blood damage?
ANSWER: While an argument could be made for blood to be categorized as "waste" within the meaning of the pollution exclusion, this is a stretch. We noted in a published Q&A regarding a homeowners policy and human blood (but with a similar pollution exclusion), "While bodily remains need to be cleaned up, they are not waste in the sense that they can be recycled, reconditioned or reclaimed. The pollution exclusion applies to gaseous, liquid or solid irritants including alkalis, acids, etc. While cleaning up a body may be distasteful, human remains aren't an irritant in the chemical sense that is described in the pollution exclusion. The exclusion specifically refers to manmade pollutants or contaminants, and exclusions are to be read narrowly. Therefore the remains are not pollutants and are not excluded." This is referring to human remains, but the same would apply to deer blood. |
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| Litigation Watch |
Estranged Husband as a Resident Spouse
The plaintiff auto insurer brought an action against the defendant insurer, seeking a contribution from the defendant toward underinsured motorist (UIM) and personal injury protection (PIP) benefits that the plaintiff paid to its insured. This case is IFA Insurance Company v. Government Employees Insurance Company, 2016 WL 1948775.
Falana and Oropeza were married in 1999 and moved into Falana's home in Collingswood. In 2011, Falana abandoned Oropeza without prior notice and moved to the Jersey Shore; Falana testified that he intended to divorce Oropeza.
Falana was insured under a policy issued by IFA at this time. Oropeza bought her own auto policy from GEICO. This policy listed Oropeza and Falana as named insureds. After a few days, GEICO issued a new policy listing Oropeza as the only named insured and listed her new address.
In October 2011, Falana learned that Oropeza had relocated from the Collingswood house and so, he decided to return there. In November 2011, Falana was struck by a car as he crossed the street and was seriously injured. IFA paid him $233,498 in PIP benefits and also paid him $50,000 in UIM benefits. IFA then filed a lawsuit seeking a pro rata contribution from GEICO.
The Superior Court, Law Division, Camden County entered summary judgment in favor of GEICO and this appeal followed.
The Superior Court of New Jersey, Appellate Division addressed the first argument put forth by IFA that GEICO was prohibited from removing Falana as a named insured without his consent. The court noted that Falana had his own policy and did not rely on the GEICO policy for coverage. Also, the court pointed out, Falana was unaware that he was covered by his spouse's policy and he was not rendered uninsured by the policy change dropping him as a named insured. Finally, there was no possibility that Falana would operate Oropeza's insured vehicle. So, the court did not accept IFA's argument.
IFA also argued that Falana was insured under the GEICO policy pursuant to New Jersey law. The statute provided for continuation of coverage even if the co-resident spouse moves, stating "If the spouse ceases to be a resident of the household of the named insured, coverage shall be extended to the spouse for the full term of any policy period in effect at the time of the cessation of residency." The court did not accept this argument.
The court said that while the GEICO policy initially listed Falana as a resident of the same household, he was not in fact a resident of Oropeza's household when the GEICO policy was issued. He ceased to be a resident of her household on July 10, 2011, before the GEICO policy went into effect. Consequently, the court found that extending coverage for the full term of any policy period in effect at the time of the cessation of residency provides no coverage at all in this instance.
The court additionally ruled that where a relative seeks coverage after moving out of the insured's household, the relative's intent matters. Here, Falana abandoned Oropeza with the intent to divorce her. She moved into a different residence. The fact that Oropeza remained in the Collingswood house for a few days after obtaining the GEICO policy was immaterial, as Falana had vacated the home almost three weeks earlier. Moreover, Falana's return to the house in October did not establish him as a resident of Oropeza's household since by then, she had moved into a different house.
In sum, said the court, because Falana ceased being a resident of Oropeza's household before the GEICO policy was issued, he did not meet the definition of a named insured under the policy or New Jersey statutes. Consequently, there was no basis for coverage for his injuries under the GEICO policy. The ruling of the trial court was affirmed.
Editor's Note: The Superior Court of New Jersey, Appellate Division, examines what it means to be a resident spouse when it comes to being considered as a named insured. |
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| Fraud of the Week |
Property Fraud – Nevada
AMOUNT: Unknown
A Nevada woman filed a claim for several Louis Vuitton items that she claimed were stolen from her home during a burglary. In actuality, the items had been returned to a store in California several years earlier. The woman pleaded guilty; sentencing will be October 31, 2016. Insurance fraud is punishable by up to four years in jail and a fine of no more than $5,000.
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