There are no disputes regarding the facts of this case. Roy Street Associates owns an apartment building located at 200 Roy Street in Seattle, WA. Pacific Restoration (Pacific) was hired by the owners in 1996 to make repairs and improvements to the building. The parties agreed to use PC–220 and Polyglaze AL, manufactured by Polycoat Products as waterproofing for the surface of a deck. Both contain a toxic ingredient called toluene diisocyanate (TDI), whose fumes are known to irritate the respiratory tract and can cause central nervous system depression in high concentrations.
A tenant, Delores Kaczor, (Kaczor) lived in an adjoining apartment of the deck. Pacific failed to warn Kaczor that they were applying the sealant and fumes entered her apartment while the deck dried. The fumes aggravated her pre-existing chronic obstructive pulmonary disease and she required hospitalization as a result. She sued Pacific and the building owners for personal injury and property damage. Kaczor died in 1998 and the case was dismissed. Her estate filed a second lawsuit for her injuries and that was settled for $30,000.
At the time of the incident, Pacific was insured with a general liability policy from American States Insurance Company. Roy Street was named as additional insureds. Roy Street held their own coverage on a general liability policy with State Farm Fire and Casualty Company (State Farm). Both insurance companies denied the claim based on the pollution exclusion. The policyholders filed this action claiming that the insurance companies had failed to defend and seeking indemnification. Roy Street and Pacific contended that the pollution exclusion was meant for environmental harms, not for personal injuries arising from ordinary neglect.
The trial court granted a summary judgment in favor of the insurance companies and the policyholders filed for an appeal. The court of appeals affirmed and held that the exclusion was not ambiguous.
Quadrant Corp. v. American States Ins. Co., Supreme Court of Washington, En Banc. April 28, 2005, 154 Wash.2d 165 110 P.3d 733, No. 74663–0
