Central Crude v. Liberty Mutual Ins, No. 21-30707 (5th Cir. 2022)
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In 2017, Plaintiff discovered a crude oil leak on its property. Despite 15 years of remediation efforts, the leak persists and the cause of the leak remains unknown. Plaintiff filed a claim with Defendant insurance company under a commercial general liability policy. However, the policy contains a "total pollution exclusion endorsement" which removes coverage for various events related to "pollution."
Initially, the insurer agreed to cover Plaintiff's loses, but later denied the claim. In January 2017, Plaintiff filed this lawsuit in state court seeking: (1) coverage for past and future expenses it incurred in cleaning up the spill; (2) coverage for defense costs in connection with the Lawsuit; and (3) damages, penalties, and attorney fees. The insurer removed the case to federal court and the district court determined that the total pollution exclusion barred coverage.
The Fifth Circuit affirmed, explaining "the absolute pollution exclusion in Liberty Mutual’s policy unambiguously excludes coverage ... related to 'clean up' or 'remov[al]' of the crude oil, as well as for any 'property damage’ which would not have occurred in whole or part but for the . . . release or escape” of the crude oil."
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