Pollution Exclusion Precludes Coverage of Claim for Damages Allegedly Cause by Spraying of Pesticide in Home, Vermont’s Top Court Decides

The Vermont Supreme Court has ruled that a pollution exclusion in a homeowners’ insurance policy precluded coverage for the homeowners’ claim for property damages they alleged had been caused by the spraying of a pesticide in their home in an effort to exterminate bed bugs.

The Case

Neil and Patricia Whitney noticed bed bugs in their home after a new foster child had been placed with them by the Vermont Department for Children and Families (the “DCF”). The Whitneys said that, shortly thereafter, at the behest of the DCF, a pest control company sprayed the Whitneys’ home with the pesticide chlorpyrifos in order to eradicate the bed bugs. According to the Whitneys, the company sprayed the house, corner to corner, wall to wall, and sprayed the Whitneys’ personal effects within the home, including the inside of the oven and the ductwork of the forced hot air heating system. The Whitneys said that when they returned to their home after the spraying operation, the walls and surfaces of the home were visibly dripping with the pesticide.

Concerned by the amount of chemicals sprayed within their home, the Whitneys contacted the DCF, which referred them to the Vermont Department of Agriculture (the “VDA”). The Whitneys said that after their home was tested about a week after the spraying, revealing high levels of chlorpyrifos.  A VDA representative advised them to stay out of their home until further notice.

Shortly after the VDA’s testing, the Whitneys filed a claim with Vermont Mutual Insurance Company, which had issued a homeowners’ insurance policy to them.

The insurer denied the Whitneys’ claim, citing the policy’s pollution exclusion. The Whitneys sued.

The trial court ruled in the Whitneys’ favor. It reasoned that the terms “pollution” and “discharge, dispersal, release, and escape” in the policy’s pollution exclusion were ambiguous in the context of this case and that these terms, therefore, should be construed in favor of coverage.

Vermont Mutual appealed to the Vermont Supreme Court.

The Vermont Supreme Court’s Decision

The Vermont Supreme Court reversed the trial court’s decision and ruled that the pollution exclusion clause in the property damage coverage in Vermont Mutual’s homeowners’ insurance policy excluded the damage to the Whitneys’ home resulting from the spraying of chlorpyrifos throughout their home.

In its decision, the court explained that the rule in Vermont was that pollution exclusions were “not presumed, as a class, to be ambiguous or to be limited in their application to traditional environmental pollution” but that they should be construed “in the same way as any other insurance contract provision.”

The court then said that it was “clear” that the dousing of the Whitneys’ home with chlorpyrifos constituted “discharge, dispersal, seepage, migration, release, or escape” of chlorpyrifos.

It also decided that the terms “irritant,” “contaminant,” and “pollutant” in the policy’s pollution exclusion “plainly and unambiguously encompass the chlorpyrifos sprayed ‘corner to corner, wall to wall’ throughout the Whitneys’ home.”

The court observed that the “undisputed facts” were that “chlorpyrifos is: toxic to humans; can cause nausea, dizziness, confusion, and at very high exposures, respiratory paralysis and death; and is banned for residential use.” The court also pointed out that the pest control company’s use of chlorpyrifos in the Whitneys’ home “violated [U.S. Environmental Protection Agency (“EPA”)] regulations, and federal and state law” and that the concentration levels of the substance in the Whitneys’ home were consistently high relative to the EPA “action level” at which the EPA has determined that cleaning of housing units was required.

Accordingly, the court directed the trial court to award summary judgment to Vermont Mutual.

The case is Whitney v. Vermont Mutual Ins. Co., No. 15-073 (Vt. Dec. 11, 2015).