Author: Nancy Germond

Wait, So Does This Mean Every Claim Is Covered?

That headline is obviously hyperbolic. But maybe that's what the Rhode Island Supreme Court said in a Friday decision. Or, if not every claim, certainly a lot – even reasonably disputed ones.

At issue in Regan Heating & Air Conditioning v. Arbella Protection Ins. Company, No. 2020-170 (R.I. Jan. 27, 2023) was the interpretation of a total pollution exclusion to a claim for damage to a residence caused during Regan Heating & Air Conditioning's removal of an old heating system and replacement with a new one. In the process, 170 gallons of home heating oil leaked into the basement. 

As you can imagine, like many pollution exclusion disputes, at issue before the court was how to interpret it – broadly, and applicable to all releases of hazardous substance or narrowly, and applicable only to so-called traditional environmental pollution.

In resolving the dispute, the court observed that there have been decades of litigation over this issue and then, like many, set out to demonstrate various ways in which courts nationally have addressed it. Following this survey, the court made this pronouncement. Get ready. “This Court has acknowledged that diversity of judicial thought as to the meaning of terms in an insurance contract is 'proof positive' of ambiguity." (citations omitted).

 So, simply because different courts have addressed a coverage issue, and reached differing conclusions, is “proof positive" of ambiguity. That is a breathtaking statement. 

Coverage Opinions readers are well-aware that policy language is subject to varying interpretations by courts nationally. At the core of many coverage issues is courts' adoption of different schools of thought on the interpretation of policy language. Some courts see it one way and other courts see it a different way. Courts simply decide which camp they believe offers the more correct interpretation. I can count 20 such situations without even breaking a sweat. 

But the Rhode Island Supreme Court now tells us that this very process of judicial thought is “proof positive" of ambiguity and, therefore, gives rise to coverage.            

Not surprisingly, following this observation, the Rhode Island high court concluded that the policy's definition of “pollutant" is ambiguous and the exclusion – even a total pollution exclusion – does not apply to the release of 170 gallons of home heating oil leaked into a basement.  

For a full copy of the case, click this link. 

This article is reprinted with permission of its author, Randy Maniloff, Coverage Opinions newsletter. Maniloff is an attorney with White and Williams, LLP located in Philadelphia, PA. Visit Coverage Opinions here: www.coverageopinions.com to subscribe to his informative bulletin. 

Last Updated: February 17, 2023

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