Traub Lieerman Straus & Shrewsberry LLP | March 22,2 016
In its recent decision in Georgia Farm Bureau Mut. Ins. Co. v. Smith, 2016 Ga. LEXIS 245 (Ga. Mar. 21, 2016), the Supreme Court of Georgia had occasion to consider whether under Georgia law, the pollution exclusion applies to a bodily injury claim arising out of ingestion of lead paint.
Georgia Farm Bureau (“GFB”) issued a general liability policy to the landlord of a private rental house. The landlord was named as a defendant in a lawsuit alleging that a child tenant suffered injury as a result of ingesting paint chips containing lead. GFB contended, among other things, the claim was barred by its policy’s pollution exclusion which applied to bodily injury claims arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of “pollutants” at or from any premises owned or occupied by any insured. The policy defined the term “pollutants” as:
… any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.
While the trial court initially granted summary judgment in GFB’s favor, the Georgia Court of Appeals reversed, concluding that lead-based paint was not a pollutant for the purpose of the exclusion. In so doing, the Court of Appeals distinguished the Supreme Court’s decision in Reed v. Auto-Owners Ins. Co., 284 Ga. 286 (2008), which held the pollution exclusion applicable to an underlying claim involving the indoor release of carbon monoxide.
In considering the issue, the Georgia Supreme Court noted that while the pollution exclusion was originally drafted to apply to environmental contamination, the language was revised in the 1980s to encompass non-environmental pollution claims. The Court further observed that while some jurisdictions have continued to limit the pollution exclusion to traditional environmental harms despite these changes in the exclusion, Georgia courts have not applied such a limitation, as reflected in the Reed decision.
The Court further observed that the proper analysis for determining whether a particular constituent is a “pollutant” is not to look to the “purpose and historical evolution” of the pollution exclusion, but instead to look to the plain language of the terms. With this frame of reference, the Court concluded that lead-based paint is a “pollutant” and that as such, the pollution exclusion was applicable to the underlying claim.