The Colorado Court of Appeals issued its opinion in Figuli v. State Farm Mutual Fire & Casualty on March 29, 2012.
Insurance—Injuries—Sewage—Absolute Pollution Exclusion Clause.
In this action concerning insurance coverage, plaintiffs Shadi Figuli, Joshua Figuli, and Jean Chu appealed the district court’s summary judgment in favor of defendant State Farm Mutual Fire and Casualty (State Farm). The judgment was affirmed.
In 2004, the Figulis became ill while living in a rental property owned by Chu. The property was covered by a rental dwelling policy with State Farm, and Chu also had a personal liability umbrella policy. After testing on the property revealed the presence of toxic mold and raw sewage, the Figulis filed suit against Chu for their injuries.
Plaintiffs argued that the district court erred in concluding that raw sewage is a pollutant excluded from coverage by State Farm policies’ absolute pollution exclusion (APE clause) and granting summary judgment in favor of State Farm. Here, the APE clause is unambiguous when applied to raw sewage. The policy defines “pollutants” as “any solid, liquid, gaseous or thermal irritant or contaminant, including . . . waste.” “Waste” is defined in the policy as including, but not limited to, materials to be recycled, reconditioned, or reclaimed. The plain meaning of the term “sewage” is waste, and waste clearly is included in the definition of “pollutants” under the policy. Therefore, the district court correctly held that State Farm had no duty to defend or indemnify Chu and properly granted summary judgment in State Farm’s favor.