Evanston Insurance Company v. Xytex Tissue Services, LLC et al

Filing 49

ORDER granting 48 Motion to Add Defendants; granting in part and denying in part 24 Motion to Exclude or Limit Testimony - Dr. Zuckerman is permitted to testify regarding all matters within his expertise, chemistry; granting in part and denyi ng in part 25 Motion for Summary Judgment - Plaintiff has no duty to indemnify for punitive damages under the Policies. The remainder of Plaintiff's motion for summary judgment is denied. Signed by Chief Judge J. Randal Hall on 3/27/2019. (pts)

IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF GEORGIA
AUGUSTA DIVISION
*

EVANSTON INSURANCE COMPANY,

*
*

Plaintiff,

5

*

V.

CV 117-140

*
*

XYTEX TISSUE SERVICES, LLC;
XYTEX CRYO INTERNATIONAL,
LTD.; XYTEX PROPERTIES LLC;

*
■k
*

LINDSEY MEAGHER, Individually,

*

and as Executor for the Estate

*

of Greg Meagher; MARY M.

*

MEAGHER; and EMMA G. MEAGHER,

*
*

Defendants.

ORDER

Before the Court are the following motions:

Defendants Xytex Issue Services,

LLC,

(1) Plaintiff and

Lindsey Meagher,

Mary M.

Meagher, and Emma G. Meacher's (''Existing Parties") joint motion
to add defendants

(Doc.

48);

(2)

Plaintiff's motion to exclude

expert testimony (Doc. 24); and (3) Plaintiff's motion for summary

judgment (Doc. 25) .

The joint motion to add defendants is GRANTED.

Plaintiffs' motion to exclude expert testimony is GRANTED IN PART
and

DENIED

IN

PART.

Finally,

Plaintiff's

motion

judgment is GRANTED IN PART and DENIED IN PART.

for

summary

I. BACKGROUND

A. Underlying State Court Action

The facts alleged in the underlying state court tort action,
Meagher v. Xytex Tissue Services, LLC, No, 2017RCCV00492, Superior

Court of Richmond County, Georgia (''Underlying Lawsuit"), giving
rise to the present coverage action are largely undisputed.

Underlying Lawsuit Compl., Doc. 1-2.)

(See

Defendant Xytex Tissue

Services, LLC ("Defendant Xytex") stores biological material at

low temperatures. (St. of Mat. Facts, Doc. 25-2, SI 1 (admitted).)^
To

keep

the

material

cooled

to

the

appropriate

temperature.

Defendant Xytex employs cryogenic storage freezers "cooled by an
on-site liquid nitrogen delivery system."

(Id. SI 3 (admitted).)

If the pressure in the delivery system exceeds the permissible
limits, the relief valves open to release liquid nitrogen and lower

the pressure in the system.

(Id. SISI 6, 10 (admitted).)

Once

released, the liquid nitrogen vaporizes into nitrogen gas.

(See

id.

SISI 6, 14 (admitted).)

release process occurred.

On

February 5, 2017, the pressure

(Id. SISI 8, 10 (admitted).)

The system

1 Here, Defendant Xytex specifically admits Plaintiff's Statement of Undisputed
Material Fact. (Resp. to St. of Mat. Facts, Doc. 32-1, SI 1.) However, in
admissions elsewhere. Defendant Xytex responds to Plaintiff's Statement of
Undisputed Material Facts with the response: "Xytex admits the complaint in the
underlying tort action makes the allegations contained in [the] statement."
(See, e.g., id. SI 3.)

Because "[a]n insurer's duty to defend turns on the

language of the insurance contract and the allegations of the complaint asserted
against the insured," Ga. Farm Bureau Mut. Ins. Co. v. Vanhuss, 532 S.E.2d 135,
136 (Ga. Ct. App. 2000), an admission that the complaint in the Underlying
Lawsuit makes the allegation is sufficient to establish an undisputed fact for
the purposes of this summary judgment motion. Accordingly, the Court designates
Defendant's responses in this form as "admitted" unless otherwise noted.

released the liquid nitrogen — which subsequently vaporized — into
Defendant Xytex's warehouse.

(Id. SI 7 (admitted).)

The discharge of the nitrogen into the warehouse set in motion
a series of unfortunate events.

At the outset, the oxygen level

in the warehouse began to drop, triggering the warehouse's oxygen
sensor alarm.

(Id. SI 11 (admitted).)

The accumulation of gaseous

nitrogen in the warehouse formed a dense fog setting off the
warehouse's motion detectors and burglar alarms.

(admitted).)

(Id. SISI 14, 15

A Defendant Xytex employee first responded to the

alarms, then collapsed in the warehouse. (Id. SISI 21-22; Underlying

Lawsuit Compl., SI 30.)
warehouse.

(St.

of

Next, Deputy Greg Meagher entered the

Mat.

Facts,

SI 23 (admitted).)

He,

too,

succumbed to the conditions in the warehouse and died as a result.

(Id. SI 24; Underlying Lawsuit Compl., SI 33.)

Following Deputy Meagher's passing, Lindsey Meagher, Mary

Margaret Meagher, and Grace Meagher ("'Meagher Defendants") filed
the

Underlying

defendants.

Lawsuit

against

Defendant

Xytex

and

other

(Underlying Lawsuit Compl.) Plaintiff, disputing its

duties to indemnify and defend, is defending Defendant Xytex in

the Underlying Lawsuit under a reservation of rights. (Reservation
of Rights Letters, Docs. 22-1, 22-3, 22-4, 22-6.)
B. The Declaratory Judgment Action

Believing coverage is excluded under two insurance policies.
Plaintiff

filed

the

instant

declaratory judgment

suit.

(See

Compl., Doc. 1.)
under

Defendant Xytex is an additional named insured

commercial

general

liability

policy

number

3AA116895

{''Primary Policy") and named insured on commercial excess policy
number EZXS1005877 ("Excess Policy," and collectively with Primary

Policy, "Policies").

(St. of Mat. Facts, SISl 33, 34 (factual

assertions admitted).)

Plaintiff asks that the Court grant summary

judgment, thereby declaring that it has no duty to defend or
indemnify
Lawsuit.

Defendant

Xytex

in

connection

with

the

Underlying

(Mot. for Summ. J., Doc. 25, at 1.)

1. Insurance Policies

The General Policy contains the following coverage:
SECTION I - COVERAGES

COVERAGE A - BODILY INJURY AND PROPERTY DAMAGE LIABILITY

1. Insuring Agreement

a. We will pay those sums that the insured becomes

legally obligated to pay as damages because of "bodily
injury" . . . to which this insurance applies.^ We will
have the right and duty to defend the insured against
any "suit" seeking those damages. However, we will have
no duty to defend the insured against any "suit" seeking
damages for "bodily injury" . . . to
which
this
insurance does not apply.

We may, at our discretion,

investigate any "occurrence" and settle any claim or
"suit" that may result.

But:

(1) The amount we will pay for damages is limited as
described in Section III - Limits Of Insurance; and

2 The provision also contains coverage for "property damage."
is

not

at

issue

because

the

complaint

in

the

Underlying

Property damage
Lawsuit

omits

allegations of damages attributable to property damage. (See Underlying Lawsuit
Compl.)

(2) Our right and duty to defend ends when we have
used up the applicable limit of insurance in the
payment of judgments or settlements under Coverages
A or B or medical expenses under Coverage C.

No other obligation or liability to pay sums or perform
acts or services is covered unless explicitly provided
for under Supplementary Payments - Coverages A and B.
(Primary Policy, Doc. 1-3, at 30.)

The Parties^ agree that the Primary Policy is modified by a
Total Pollution Exclusion Endorsement that provides, in relevant

part:

''This

insurance

does

not

apply

to: . . . (1)

'Bodily

injury' . . . which would not have occurred in whole or part but
for

the

actual,

alleged

or

threatened

discharge,

dispersal,

seepage, migration, release or escape of 'pollutants' at any time."
(Id. at 56.)

As defined by the Primary Policy, "pollutants" are

"any solid, liquid, gaseous or thermal irritant or contaminant,
including smoke, vapor, soot, fumes, acids, alkalis, chemicals and
waste."

The

(Id. at 44.)

Punitive

Combination

or

General

Exemplary

Endorsement

Damages
further

Exclusion

modifies

the

in

the

Primary

Policy: "This insurance does not apply to: . . . Fines, penalties,
and

punitive

or

exemplary

damages,

or

any

expenses

or

any

obligation to share such damages or repay another." (Id. at 59.)

3 Unless otherwise stated, "Parties" refers to all parties to this action

inclusive of the parties added pursuant to this Order.

The additional parties

are deemed to have been parties to this lawsuit from its inception.

Moreover,

all filings to this point are deemed, as stated herein, to also have been filed
on behalf of the defendants added pursuant to this Order.
infra.)

(See Section V,

The Combination General Endorsement also contains a Hazardous or

Toxic

Materials

exclusion:

''This

insurance

does

not

apply

to: . . . 'Bodily injury' . . . or any injury, loss, or damage,

including consequential injury, loss or damage, arising out of,
caused

or

contributed

materials' . . . ."

to

(Id.

at

by

'hazardous

59-60.)

or

"Hazardous

or

toxic
toxic

materials" is defined as "asbestos, lead, silica dust, toxic dust,

'fungi',

bacteria,

organic

systemic chemical poison."

pathogens,

bio-organic

growth

or

(Id. at 61.)

The Excess Policy insured Defendant Xytex beyond the limits

of the Primary Policy.
assertions admitted).)

(St. of Mat. Facts,

40-41 (factual

As with the Primary Policy, the Excess

Policy contains a Pollution exclusion: "This policy does not apply
to . . . [a]ny

liability

arising

out

of

actual,

alleged

or

threatened discharge, dispersal, seepage, migration, release or

escape of 'pollutants' at any time." (Excess Policy, Doc. 1-4, at
37.)

"Pollutants," in relevant part, is defined the same in the

Excess Policy as the Primary Policy.

(Compare id., with Primary

Policy, at 44.) The Excess Policy additionally contains a Punitive
or Exemplary Damages exclusion.

(Excess Policy, at 38.)

2. Reservation of Rights

Plaintiff

drafted

and

"Reservation of Rights" letters.

sent

Defendant

Xytex

several

The first letter, dated February

13, 2017, explained that Plaintiff was investigating the incident

and reserved the right to supplement the letter in the future.

{Doc. 22-1.)

At the time of the second Reservation of Rights

letter, dated June 12, 2017, no lawsuit had been filed, and
Plaintiff

notified

Defendant

investigate the matter.

Xytex

that it

(Doc. 22-3.)

was

continuing

to

The third Reservation of

Rights letter confirmed Defendant Xytex's receipt of notice of the
Underlying Lawsuit.

(Doc. 22-4.)

In relevant part, the third

letter ''reserve[d] the right to seek reimbursement of any defense

costs paid on Xytex's behalf if a court finds that [Plaintiff] has
no duty to defend Xytex for all of the claims in the Lawsuit."
(Id. at 12.)

Plaintiff sent a final letter (Doc. 22-6) in response

to a letter from Defendant Xytex's counsel.

Plaintiff again

expressed it would "continue to defend Xytex for the Lawsuit, but
that defense will be subject to the full reservation of rights set
out in the" third Reservation of Rights letter.

(Id.)

3. Testimony of Dr. Eric J. Zuckerman

Defendant Xytex offers the testimony of Dr. Eric J. Zuckerman

as an expert in chemistry.
31, at 2, 7.)

Department

of

(Resp. to Mot. to Exclude Test., Doc.

Dr. Zuckerman is an Associate Professor in the

Chemistry

and

Physics

at

Augusta

University.

(Zuckerman Curriculum Vitae, Doc. 16-1, at 1.) Dr. Zuckerman holds
bachelor's, master's, and doctorate degrees in chemistry.

(Id.)

Defendant Xytex tenders Dr. Zuckerman's testimony to support its

position that liquid nitrogen is not an irritant, contaminant, or

systemic chemical poison. (Zuckerman Expert Report, Doc. 16; Resp.
to Mot. to Exclude Test., at 7.)

Plaintiff asks the Court to exclude Dr. Zuckerman's testimony

entirely or, in the alternative, exclude portions of his testimony

interpreting the insurance contract.

(Br. Supp. Mot. to Exclude

Test., Doc. 24-1, at 11-21.) Plaintiff argues that Dr. Zuckerman's
testimony is improper because interpreting the contract is a matter
of law for the Court and he is unqualified to testify as an expert

regarding matters of insurance.

(Id.)

4. Joint Motion to Add Defendants

After completing summary judgment briefing, the Parties filed

their joint motion to add Lindsey Meagher, as Executor for the
Estate of Greg Meagher''; Xytex Cryo International, LTD.; and Xytex

Properties LLC as party defendants in this action pursuant to
Federal Rules of Civil Procedure 19 and 21 ('Voinder Defendants,"

and collectively with Defendant Xytex and Meagher Defendants,
''Defendants").

(Joint Mot. to Add Defs., Doc. 48.)

The Parties

represent that the Underlying Lawsuit was recently amended to add
Lindsey Meagher, as Executor for the Estate of Greg Meagher, as a

plaintiff and the remaining Joinder Defendants as defendants. (Id.
5 2.)

The joint motion further: (1) Requests that the Joinder

Defendants be treated as if they were parties from the commencement

^ Lindsey Meagher is already a party to this suit in her individual capacity,
(See Compl., at 1.)

of this action; and (2) States that the Joinder Defendants agree

to be bound by the rulings on Plaintiff's motions for summary

judgment and to exclude expert testimony.

(Id.

9, 13.)

II. JOINT MOTION TO ADD DEFENDANTS

The Parties agree that with the addition of the Joinder
Defendants

to

the

Underlying

defendants in this action.

Lawsuit,

they

are

necessary

(Joint Mot. to Add Defs., SISI 1~2, 4-

5.) The Court agrees that adding the Joinder Defendants is proper.

III. MOTION TO EXCLUDE EXPERT TESTIMONY

Plaintiff

objects

to

the

admission

of

Dr.

Zuckerman's

testimony pursuant to Federal Rule of Evidence 702 and Daubert.
Defendant Xytex responds that Dr. Zuckerman meets all necessary

requirements as a chemistry expert. The Court initially addresses
the standard employed to analyze such disputes.
A. Daubert Standard

Federal Rule of Evidence 702 provides:

A witness who is qualified as an expert by knowledge,
skill, experience, training, or education may testify in
the form of an opinion or otherwise if:

(a) the expert's scientific, technical, or other
specialized knowledge will help the trier of fact to
understand the evidence or to determine a fact in issue;

(b) the testimony is based on sufficient facts or data;

(c) the testimony is the product of reliable principles
and methods; and

(d) the expert has reliably applied the principles and
methods to the facts of the case.

"As the Supreme Court recognized in Daubert v. Merrell Dow Pharms.,
Inc., [509 U.S. 579 (1993)], Rule 702 plainly contemplates that
the district court will serve as a gatekeeper to the admission of

[expert] testimony."

Quiet Tech. DC-8, Inc. v. Hurel-Dubois UK

Ltd., 326 F.3d 1333, 1340 (11th Cir. 2003). "The burden of laying

the proper foundation for the admission of the expert testimony is
on the party offering the expert, and admissibility must be shown

by a preponderance of the evidence." Allison v. McGhan Med. Corp.,
184 F.3d 1300, 1306 (11th Cir. 1999).

The Eleventh Circuit has explained that district courts are

to engage in a three-part inquiry to determine the admissibility
of expert testimony under Rule 702. Quiet Tech., 326 F.3d at 1340.
Specifically, the court must consider whether:
(1) [t]he expert is qualified to testify competently

regarding the matters he intends to address; (2) the
methodology by which the expert reaches his conclusions
is sufficiently reliable as determined by the sort of

inquiry mandated in Daubert; and (3) the testimony
assists the trier of fact, through the application of

scientific,

technical,

or

specialized

expertise,

to

understand the evidence or to determine a fact in issue.
Id. at 1340-41.

First, an expert may be qualified to testify due to his

knowledge, skill, experience, training, or education. Trilink Saw

10

Chain, LLC v. Blount, Inc., 583 F. Supp. 2d 1293, 1304 (N.D. Ga.

2008). ''A witness's qualifications must correspond to the subject
matter of his proffered testimony."

Anderson v. Columbia Cty.,

No. CV 112-031, 2014 WL 8103792, at *7 (S.D. Ga. Mar. 31, 2014)

(citing Jones v. Lincoln Elec. Co., 188 F.3d 709, 723 (7th Cir.
1999)).

However,

an

expert's training

need

tailored to match the exact point of dispute.

not be

narrowly

McDowell v. Brown,

392 F.3d 1283, 1297 (11th Cir. 2004).

Second, the testifying expert's opinions must be reliable.

In Daubert, the Supreme Court directed district courts faced with

the

proffer

of

expert

testimony

to

conduct

a

^^preliminary

assessment of whether the reasoning or methodology underlying the

testimony is scientifically valid and of whether that reasoning or

methodology properly can be applied to the facts in issue."
U.S.

at

592-93.

There

are

four

factors

that

courts

509

should

consider: (1) whether the theory or technique can be tested,
(2) whether it has been subject to peer review, (3) whether the

technique has a known or potential rate of error, and (4) whether
the

theory

community.

has

attained

Id. at 593— 94.

general

acceptance

in

the

relevant

^^These factors are illustrative, not

exhaustive; not all of them will apply in every case, and in some
cases other factors will be equally important in evaluating the

reliability

of

proffered

expert

opinion."

United

Frazier, 387 F.3d 1244, 1262 (11th Cir. 2004).

11

States

v.

For example.

experience-based experts need not satisfy the factors set forth in
Daubert.

Cir.

See United States v. Valdes, 681 F. App'x 874, 881 (11th

2017)

(affirming

admission

of

testimony

from

expert

identifying firearms based upon years of experience working with
firearms).

However, ''[t]he inquiry is no less exacting where the

expert ^witness is relying solely on experience' rather than
scientific methodology."

Summit at Paces, LLC v. RBC Bank, No.

1:09-CV-03504-SCJ, 2012 WL 13076793, at *2 (N.D. Ga. May 22, 2012)

(quoting Fed. R. Evid. 702, advisory committee's notes to 2000
amendment)).

Bearing in mind the diversity of expert testimony,

^^the trial judge must have considerable leeway in deciding in a

particular case how to go about determining whether particular

expert testimony is reliable." Kuhmo Tire Co. v. Carmichael, 526
U.S. 137, 152 (1999).

Regardless of the specific factors considered, 'Mplroposed
testimony must be supported by appropriate validation - i.e., ^good

grounds,' based on what is known."

Daubert, 509 U.S. at 590.

In

most cases, "[t]he expert's testimony must be grounded in an

accepted body of learning or experience in the expert's field, and
the expert must explain how the conclusion is so grounded."
R. Evid. 702,

advisory

committee's

notes

to

2000

Fed.

amendment.

''Presenting a summary of a proffered expert's testimony in the
form of conclusory statements devoid of factual or analytical

support is simply not enough" to carry the proponent's burden.

12

Cook ex rel. Estate of Tessier v. Sheriff of Monroe Cty.^ 402 F.3d

1092, 1113 (11th Cir. 2005).

Thus, ''if the witness is relying

solely or primarily on experience, then the witness must explain
how that experience leads to the conclusion reached, why that

experience is a sufficient basis for the opinion, and how that

experience is reliably applied to the facts."

Frazier, 387 F.3d

at 1261 (citation omitted).

Third, expert testimony must assist the trier of fact to
decide a fact at issue.
as one of "fit."

requirement,

the

The Supreme Court has described this test

Daubert, 509 U.S. at 591.

testimony

must

concern

To satisfy this

matters

beyond

the

understanding of the average lay person and logically advance a
material aspect of the proponent's case.

Daubert, 509 U.S. at

591; Frazier, 387 F.3d at 1262. Yet, "[pjroffered expert testimony

generally will not help the trier of fact when it offers nothing
more than

what lawyers for the parties can argue in closing

arguments."

Frazier, 387 F.3d at 1262-63.

At times, expert

testimony is required in contract interpretation to "clarify or
define terms of art, science, or trade."

See TCP Indus., Inc. v.

Uniroyal, Inc., 661 F.2d 542, 549 (6th Cir. 1981).
B. Discussion

Plaintiff asserts that

Dr.

Zuckerman's testimony will not

assist the trier of fact, that Dr. Zuckerman is not qualified to

13

testify

as

an

insurance

expert,

methodology is unreliable.

and

that

Dr.

Zuckerman's

The Court addresses each contention.

1. Fit

Plaintiff's

primary

objection

to

the

admission

of

Dr.

Zuckerman's testimony is that his testimony does not "'fit" the
issue

the

trier

of fact

will

decide.

The

Plaintiff's ''fit" argument to be multifaceted.

argues that

Dr.

interpreting the
exclusions.

Zuckerman's testimony does
Pollution

Second,

and

Hazardous

Plaintiff contends

impermissible legal conclusions.

or
Dr.

Court

understands

First, Plaintiff

not assist

with

Toxic Materials
Zuckerman

offers

The Court addresses Plaintiff's

positions in turn.

The Court agrees with Plaintiff's argument that, as discussed
in Section IV(B), infra^ determining the plain language of the

contract and applying rules of construction when necessary is a
matter of law for the Court.

But Plaintiff does not address

whether Dr. Zuckerman's testimony fits in the event the Court

determines the Policies' language is ambiguous and the rules of
contract construction do not resolve the ambiguity as a matter of

law.5

At that point, the contracting parties' intended meaning of

the terms contained in the Policies becomes a fact issue for the

5 Based on the well-established principle that contract construction is a

question of law, the Court refrains from consulting the opinions of Dr.
Zuckerman in determining whether the terms are ambiguous in Section IV(B),
infra.

14

jury.
171

RLI Ins. Co. v. Highlands on Ponce, LLC, 635 S.E.2d 168,

(Ga.

Ct.

App.

2006);

see

also

O.C.G.A. § 13-2-1

(''The

construction of a contract is a question of law for the court.

Where any matter of fact is involved, the jury should find that
fact."); O.C.G.A. § 13-2-2.

Plaintiff takes the position that if the Court refuses to

conclude that the policy unambiguously excludes coverage Plaintiff

is obligated to provide a defense under Georgia law.

At that

point, the issue is resolved, and Dr. Zuckerman's testimony will
be useless to a jury.

Again, the Court agrees with Plaintiff's

interpretation of Georgia law on this point.

See BBL-McCarthy,

LLC V. Baldwin Paving Co., 646 S.E.2d 682, 685 (Ga. Ct. App. 2007).

Of course. Plaintiff's complaint contends that it has no duty to

defend or indemnify under the Policies.
45.)
the

(Compl.,

41-42, 44-

Plaintiff also moves for summary judgment on both issues:
duties to defend

and indemnify.

In the event the Court

concludes that the allegations in the complaint of the Underlying
Lawsuit do not unambiguously exclude coverage. Plaintiff will have

a duty to defend.

But, if ambiguity remains regarding Plaintiff's

obligation to indemnify, a jury will resolve the intent of the
Parties.

Said

another

way,

upon

a

finding

of

ambiguity.

Plaintiff's duty to defend will be decided, but a jury in this
declaratory judgment action will analyze fact issues ultimately
determining if Plaintiff has a duty to indemnify.

15

Consequently,

if Dr. Zuckerman's testimony meets the other Daubert requirements,

his testimony is admissible to assist the jury in resolving the
remaining fact issues.

Second, Plaintiff offers authority stating that the expert

may not simply reiterate Defendant Xytex's contract interpretation
or the legal arguments of its counsel.
Test., at 12.)

(Br. Supp. Mot. to Exclude

Pursuant to Federal Rule of Evidence 704, 'Ma]n

opinion is not objectionable just because it embraces an ultimate
issue."

^^However, an expert may not ^merely tell the jury what

result to reach.'"

N. Am. Specialty Ins. Co. v. Wells, No. CV

412-146, 2013 WL 4482455, at *2 (S.D. Ga. Aug. 19, 2013) (quoting

Montgomery v. Aetna Cas. & Sur. Co., 898 F.2d 1537, 1541 (11th
Cir. 1990)).

The Court agrees that "Melxpert testimony may only

tread delicately on underlying legal principles in the context of
insurance claim disputes." Magnolia Bankshares, Inc. v. Fed. Ins.

Co., No. CV 312-055, 2014 WL 12703719, at *4 (S.D. Ga. Apr. 28,
2014).

To the extent Defendant Xytex proffers Dr. Zuckerman to inform

the jury that liquid nitrogen is outside the general Pollution or
Hazardous or Toxic Materials exclusion or comments on Plaintiff's

duty to defend or indemnify, his testimony is excluded.

(See,

e.g., Zuckerman Expert Report, Doc. 16, 57 (^'Liquid nitrogen is
not a ^pollutant' as defined in section (ii) below because it is
neither an irritant nor a contaminant under the facts of this

16

case."), SI 14 {''In addition, liquid nitrogen is not a 'hazardous
or toxic material' as defined in section (ii) below.")

However,

to the extent fact issues remain as to the intent and understanding

of ambiguous terms — i.e., irritant, contaminant, or systemic
chemical poison — Dr. Zuckerman is permitted to testify regarding
the nature of liquid nitrogen, its classification as one of the

ambiguous terms in the science community, and any other opinions
he is qualified to offer that are not merely a legal conclusion or
legal opinion.

Ultimately, the contracting parties' intended

meaning of ambiguous terms is a question of fact.

Dr. Zuckerman's

opinions regarding these ambiguous terms are not excluded simply
because his opinions may embrace an ultimate issue for the jury.
See Cook ex rel. Estate of Tessier, 402 F.3d at 1112 n.8.
2. Qualified to Testify

Plaintiff next disputes Dr. Zuckerman's competency to testify

under the "qualified" prong of Daubert, and the cases in the
Eleventh Circuit interpreting it, claiming that he is unqualified

to testify as an insurance expert.

First, the Court agrees that

Dr. Zuckerman is not qualified to testify as an insurance expert,

and Defendant Xytex concedes that it is not offering Dr. Zuckerman
for his insurance expertise.

(Resp. to Mot. to Exclude, at 7.)

Authority does not require an expert to be qualified as to all
issues that may arise in a particular case.

may

be

admitted, the

expert

must

17

Before his testimony

be "qualified

to

testify

competently regarding the matters he intends to address." City of
Tuscaloosa v. Harcros Chems., Inc., 158 F.3d 548, 562 (11th Cir.

1998) (emphasis added).

Insurance is undoubtedly a large element

of this dispute, but Dr. Zuckerman is not proffered to opine on
the interpretation of these terms generally in the insurance
industry.

Dr.

Zuckerman

intends

to

offer

testimony

as

to

terminology in the field of chemistry and the nature of liquid

nitrogen, both subject matters within his expertise.

Xytex's business is science oriented.
parties' intent

become

an issue

Defendant

Should the contracting

of fact.

Defendant Xytex's

understanding of certain terms could become relevant to resolving
that fact issue.

(See Scholer Decl., Doc. 32-3, at

2, 4, 5,

6.) Plaintiff does not dispute whether Dr. Zuckerman is qualified

as a chemistry expert, and the Court sees no issue with his
qualifications as such.

With that said, the Court reaches the following conclusions.

Although the Court finds little, if anything, in the record that
needs to be excluded as outside the scope of Dr. Zuckerman's

expertise,® the Court agrees with Plaintiff that Dr. Zuckerman is
not permitted to testify as an expert on insurance matters.

To

6 Dr. Zuckerman testified that he has almost zero experience reading and

interpreting insurance policies, and he has never researched how courts
interpret insurance policies. (Zuckerman Dep., Doc. 23-1, at 18-19.) Dr.
Zuckerman further testified that he is not an insurance expert, he is offering

his opinions based on his scientific qualifications, and he is qualified to
give his opinion - "[c]hemically speaking" - on the definitions of certain terms
at issue.

(Id. at 63-64.)

18

the extent

he

intends to testify regarding

matters requiring

insurance industry experience, that testimony is excluded.

This

exclusion, however, does not apply to Dr. Zuckerman offering his

opinion on the meaning or intent of ambiguous, technical words in
the relevant exclusions from the perspective of a chemistry expert.
See O.C.G.A. § 13-2-2(2).

3. Methodology

Finally, Plaintiff moves to exclude Dr. Zuckerman's testimony
because his methodology is unreliable.

The record shows that Dr.

Zuckerman applied his knowledge in the field of chemistry to
certain terms at issue in this case.

Dr. Zuckerman has studied

the nature of liquid nitrogen over the course of his career.

Through that time, he gained a sufficient familiarity and expertise
with liquid nitrogen to reliably classify liquid nitrogen under
certain scientific terminology.

Plaintiff first takes issue with the fact that Dr. Zuckerman

did not conduct on-site testing or recreate an oxygen-deprived
environment before arriving at his conclusions.

The Court finds

this argument unavailing. The Eleventh Circuit has recognized the
existence of experience-based methodology.
at 1262.

See Frazier, 387 F.3d

Furthermore, the trial court is given considerable

discretion to determine reliability depending on the facts of the
case.

Kuhmo Tire, 526 U.S. at 152.

''To be sure, there are

instances in which a district court may determine the reliability

19

prong under Daubert based primarily upon an expert's experience
and general knowledge in the field . . .

Kilpatrick v. Breg,

Inc., 613 F.3d 1329, 1336 (11th Cir. 2010).
In the context of this case, field testing was unnecessary.

Dr.

Zuckerman's

scientific

opinion

is

that

vaporized

liquid

nitrogen is never an irritant, contaminant, or poison under the

facts presented based upon the meaning of those terms.''

Had he

performed any number of tests, his opinions would be the same
because they are based on his experience evaluating the nature of

nitrogen and vaporized liquid nitrogen's interaction with the
human body and natural air.

To the extent Plaintiff disputes the

factual accuracy of this opinion, it will have the opportunity to
challenge it on cross examination.

Furthermore,

although

applying

''common

knowledge"

to

"fundamental definitions" in the scientific world does not easily

lend

itself to

peer

review

or

an

error

rate.

Dr.

Zuckerman

consulted additional sources to confirm his understanding of the

issue.

(Zuckerman Dep., Doc. 23-1, at 8-11, 41.)

There is little

left for Dr. Zuckerman to do when relying on his own expertise and

experience with nitrogen and scientific terminology.

For this

reason, district courts are given flexibility to determine which,

if any, of the Daubert reliability factors apply in a particular

^ The Court recognizes that Dr. Zuckerman testified that liquid nitrogen could
be a thermal irritant based on its inherent temperature. (Zuckerman Dep., at
54-55.) However, thermal irritation is not at issue in this case.

20

case.

Quiet Tech., 326 F.3d at 1341 (Courts consider Daubert

reliability factors "to the extent possible.")
Under

these

circumstances.

Plaintiff's

reliance

reliability factors set forth in Daubert is misplaced.

on

the

Although

Dr. Zuckerman's opinions are scientific, his opinions do not rely

on experimental testing or scientific methodology.

As stated in

Valdes, when the methodology involves "mere identification and

comparison" utilizing the expert's years of experience on that

particular subject, the factors outlined in Daubert are generally
inapplicable.

681 F. App'x at 881.

Here, Dr. Zuckerman is asked

to provide the meaning of certain terms in his field and compare
those terms with his knowledge of liquid nitrogen. Dr. Zuckerman's

testimony explains how his experience leads to his conclusions,

why that experience is a sufficient basis for the opinions, and
how the experience is reliably applied to the facts.

Dep., at 15, 29-30, 36-44.)

(Zuckerman

His years of studying and teaching

chemistry provided him the expertise needed to provide his opinion
in this case.

Here, Dr. Zuckerman's significant experience as a chemistry

scholar and professor and his involvement with liquid nitrogen

satisfy the Court that his opinions are reliable in the scientific
community.

Because the Court concludes (1) Dr. Zuckerman is

qualified to testify as a chemistry expert; (2) his methodology
for his opinions as to the meaning of terms in the scientific

21

community is sufficiently reliable; and (3) his testimony will
assist the trier of fact, except as otherwise limited herein. Dr.
Zuckerman's testimony is admissible.

IV. MOTION FOR SUMMARY JUDGMENT

A. Summary Judgment Standard

Summary judgment is appropriate only if ^^there is no genuine

dispute as to any material fact and the movant is entitled to
judgment as a matter of law."

Fed. R. Civ. P. 56(a).

Facts are

''material" if they could "affect the outcome of the suit under the

governing [substantive] law," Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986), and a dispute is genuine "if the nonmoving

party has produced evidence such that a reasonable factfinder could
return a verdict in its favor."

Waddell v. Valley Forge Dental

Assocs., Inc., 276 F.Sd 1275, 1279 (11th Cir. 2001).

The Court

must view factual disputes in the light most favorable to the non-

moving party, Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 587 (1986), and must draw "all justifiable inferences

in [the non-moving party's] favor." United States v. Four Parcels
of Real Prop., 941 F.2d 1428, 1437 (11th Cir. 1991) (en banc)

(internal punctuation and citations omitted),

The Court should

not weigh the evidence or determine credibility.
U.S. at 255.

22

Anderson, 477

The moving party has the initial burden of showing the Court,

by reference to materials on file, the basis for the motion.
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

Because the

standard for summary judgment mirrors that of a directed verdict,
the initial burden of proof required by either party depends on
who carries the burden of proof at trial.

Id.

^^When the moving

party has the burden of proof at trial, that party must show
affirmatively the absence of a genuine issue of material fact: it

^must support its motion with credible evidence that would entitle
it to a directed verdict if not controverted at trial.'"

Four

Parcels of Real Prop., 941 F.2d at 1438 (emphasis omitted) (quoting

Celotex Corp., 477 U.S. at 331 (Brennan, J., dissenting)).

"If

the moving party makes such an affirmative showing, it is entitled
to summary judgment unless the nonmoving party, in response, ^comes
forward with significant, probative evidence demonstrating the
existence of a triable issue of fact.'"

Id. (quoting Chanel, Inc.

V. Italian Activewear of Fla., Inc., 931 F.2d 1472, 1477 (11th
Cir. 1991)).

In this action, the Clerk of Court gave Defendants notice of
the motion for summary judgment and informed them of the summary

judgment rules, the right to file affidavits or other materials in
opposition, and the consequences of default. (Doc. 26.) For that
reason, the notice requirements of Griffith v. Wainwright, 772
F.2d 822, 825 (11th Cir. 1985) (per curiam), are satisfied.

23

The

time for filing materials in opposition has expired, the issues
have been thoroughly briefed, and the motion is now

ripe for

consideration.

B. Discussion

The

implicates

Parties

disagree

exclusions

under

whether

the

the

release

Primary and

of

Excess

nitrogen

Policies.

Accordingly, the questions before the Court are ones of contract
interpretation.

First, as this is a diversity jurisdiction case,

the Court is bound by the applicable state law governing the
contract.

Giddens v. Equitable Life Assurance Soc^y of the U.S.,

445 F.3d 1286, 1297 n.9 (11th Cir. 2006).

The Parties do not

dispute that Georgia law controls.

Initially, under Georgia law, the construction of a contract

''is a question of law for the court."

Am. Empire Surplus Lines

Ins. Co. V. Hathaway Dev. Co., 707 S.E.2d 369, 371 (Ga. 2011).
Insurance "is a matter of contract and the parties to the contract

of insurance are bound by its plain and unambiguous terms." Hurst

V. Grange Mut. Cas. Co., 470 S.E.2d 659, 663 (Ga. 1996).

"Words

used in the policy are given their usual and common meaning, and
the policy should be read as a layman would read it and not as it

might be analyzed by an insurance expert or an attorney." Liberty
Surplus Ins. Corp. v. Norfolk S. Ry. Co., 684 F. App'x 788, 790
(11th Cir. 2017) (quoting Ga. Farm Bureau Mut. Ins. Co. v. Smith,
784 S.E.2d 422, 424 (Ga. 2016)). An insurance company is permitted

24

to ^^fix the terms of its policies as it sees fit, so long as they

are not contrary to the law," and is free ^^to insure against
certain risks while excluding others."
Consistent

interpretation,

question of law.

with

the

construction

general

of

an

Smith, 784 S.E.2d at 424.
rule

governing

insurance

contract

contract

is

a

Elan Pharm. Research Corp. v. Emp^rs Ins, of

Wausau, 144 F.3d 1372, 1375 (11th Cir. 1998) (applying Georgia

law).

Under Georgia law, an insurer's refusal to defend is

justified only if the complaint ''does not assert any claims upon
which there would be insurance coverage."

City of Atlanta v. St.

Paul Fire & Marine Ins. Co., 498 S.E.2d 782, 784 (Ga. Ct. App.

1998).

As with the general interpretation of insurance contracts,

Claussen v. Aetna Cas. & Surety Co., 380 S.E.2d 686, 687-88 (Ga.

1989), any doubt as to an insurer's duty to defend, "should be
resolved in favor of the insured."

Penn-Am. Ins. Co. v. Disabled

Am. Veterans, Inc., 490 S.E.2d 374, 376 (Ga. 1997).

To succeed on

summary judgment that it has no duty to defend. Plaintiff must
show the terms of the policy "unambiguously exclude coverage."
BBL-McCarthy, 646 S.E.2d at 685.

Under Georgia's contract construction methodology, the first

question is whether the terms contained in the Policies' exclusions
are unambiguous.

"Where the contractual language is explicit and

unambiguous, 'the court's job is simply to apply the terms of the
contract as written, regardless of whether doing so benefits the

25

carrier or the insured.'"

Jones v. Golden Rule Ins. Co., 748 F.

App'x 861, 864 (llth Cir. 2018) (quoting Smith, 784 S.E.2d at 424).
In determining whether the relevant terms are unambiguous, the
Court looks to the text of the Policies.

Smith, 784 S.E.2d at

424.

1. Pollution Exclusion

Plaintiff

argues

that

the

released

nitrogen

meets

the

definitions of "pollutant" in the Primary Policy and the Excess

Policy.

Strictly from the definitions in the Policies, the Court

is unable to conclude that "pollutant" unambiguously governs the
factual scenario in this case.

expressly include nitrogen.®

"Pollutant" is not defined to

The pollutant definition, however,

does encompass an "irritant" or "contaminant," but "irritant
"contaminant" are not defined in the Policies.
Court

must

determine

whether

"irritant"

and

Accordingly, the
or

"contaminant

unambiguously include nitrogen pursuant to the Policies' plain
language.

Defendant Xytex contends that Barrett v. Nat'l Union Fire
Ins. Co., controls.

696 S.E.2d 326 (Ga. Ct. App. 2010).

In

Barrett, the insurance policy at issue defined "pollutant" the

8 Plaintiff cites definitions for "pollutant" not contained in the Policy.

As

stated below, under Georgia law, the Court may not substitute outside
definitions for the plain language in the Policy. Sorema N. Am. Reinsurance
Co. V. Johnson, 574 S.E.2d 377, 379 (Ga. Ct. App. 2002) (A court is "not
authorized to substitute . . . any other definition of the term . . . for the

one in the insurance policy when the policy plainly and unambiguously define[s]
the term.").

26

same as the Policies.

Id. at 329.

Barrett involved accumulation

of natural gas creating an ''oxygen-deprived" environment, and "the
lack of oxygen" injured the plaintiff.

Id. at 330.

Barrett

distinguished itself from Reed v. Auto-Owners Ins. Co., 667 S.E.2d
90 (Ga. 2008), which concluded that "irritant" and "contaminant"

unambiguously included carbon monoxide in a home.

Barrett, 696

S.E.2d at 330.

In

response.

Plaintiff contends this

Court is bound

by

decisions of the Georgia Supreme Court and the Eleventh Circuit

Court of Appeals. Plaintiff relies on Smith, 784 S.E.2d 422, which
relied on the reasoning set forth in Reed.

Smith involved the

same definition of "pollutant" as the Policies here, in Barrett,
and in Reed.

Id. at 425.

The Smith Court concluded that lead-

based paint was a "pollutant" under the relevant exclusion.

Id.

at 426.

Plaintiff also directs attention to the unpublished Eleventh

Circuit decision. Owners Ins. Co. v. Lake Hills Home Owners Ass^n,
No, 02-14556, 57 F. App'x 415 (Table) (11th Cir. 2002) (per
curiam).

(Doc.

25—6.)

Examining

the

same

definition

for

"pollutant," the Eleventh Circuit found that "silt, sediment, and
storm

water

run-off

caused

property

damage,

had

'significant

detrimental effects on the quality of waters into which they flow,'

and 'may present an imminent and substantial endangerment to health

27

or the environment,'" triggering the Pollution exclusion.

(Id. at

6.)

Plaintiff argues that to the extent there is contention in
authority between the Court of Appeals of Georgia, the Supreme

Court of Georgia, and the Eleventh Circuit, the Court is required
to follow the Georgia Supreme Court and the Eleventh Circuit.

(Pl.'s Reply to Def.'s Resp. to Mot. for Summ. J., Doc. 37, at 3.)
Plaintiff's conclusion is correct.

See Great Am. All. Ins. Co. v.

Anderson, 847 F.3d 1327, 1333 (11th Cir. 2017) (^^When interpreting
matters of state law, [the Eleventh Circuit] must follow the

decision of the state's highest court.") (internal quotation marks

omitted); EmbroidMe.com, Inc. v. Travelers Prop. Cas. Co. of Am.,
845 F.3d 1099, 1105 (11th Cir. 2017) (^^When [the Eleventh Circuit]

address[es] issues of state law, we are . . . bound by decisions

issued by that state's appellate courts.

However, when we have

issued a precedential decision interpreting that state law" the
Eleventh Circuit is bound to follow that precedent "absent a later

decision

by the

state

appellate

interpretation of that law.").

court

casting doubt on

our

Plaintiff's premise of contention

between the decisions, however, is incorrect.

The Court fails to

see how Barrett, Reed, Smith, and Lake Hills are "irreconcilable."
See Anderson, 847 F.3d at 1333.

In

Barrett,

the

underlying

complaint

alleged

that

the

accumulation of natural gas created an oxygen-deprived environment

28

causing the brain injury at issue; the complaint did not allege
that the

actual inhalation

of

natural gas caused the injury.

Conversely, Reed and Smith addressed carbon monoxide poisoning and
lead poisoning, respectively, both harmful substances known to

cause injury.
Barrett

in

As such, those cases can be distinguished from

that

the

release

of

lead

or

undoubtedly an irritant or contaminant.

distinguishable from Barrett

as opposed to bodily injury.

carbon

monoxide

is

Lake Hills is also

Lake Hills involved property damage

Lake Hills, at 2-3.

Thus, although

water runoff may ordinarily be benign as Plaintiff argues, it is

undoubtedly a contaminant or irritant when it negatively impacts

the purity of a body of water. Id^ at 6-7. The same water runoff
is not necessarily an ''irritant" or "contaminant" capable of

causing bodily injury, though. Because Reed, Smith, and Lake Hills
contained facts sufficiently different from those presented here,
the Court cannot conclude from those cases that "irritant" or
"contaminant" necessarily includes nitrogen.

Furthermore,

dictionary

definitions

contaminant do not solve the discrepancy.

of

irritant

and

When an insurance term

is undefined, courts may "use the dictionary to determine the plain

9 The Court recognizes that Lake Hills is not binding precedent. Although the
Court will not ignore persuasive authority that is directly on-point, for the
reasons contained herein, the difference between an irritant or contaminant in

a property injury claim versus a bodily injury claim distinguishes Lake Hills
from the present case.

29

and generally accepted meaning of the term."^° Empire Fire & Marine
Ins. Co. V. Daniels, 631 S.E.2d 799, 802 (Ga. Ct. App. 2006).

The Parties supplied the Court a generous stock of definitions
to

consider.

Upon

reviewing

several

definitions,

the

Court

concludes that Plaintiff's definitions, applied in Lake Hills, do

not render nitrogen's status as an ^^irritant" or ^^contaminant"

unambiguous.

Lake Hills, citing the Random House Unabridged

Dictionary (2d ed. 1987), defined ^'irritant" as '^anything that

annoys" and ''contaminant" as "something that makes 'impure or
unsuitable by contact or mixture with something unclean, bad.

10 Reed determined that analyzing outside definitions was unnecessary when carbon
monoxide was the substance at issue:

We need not consult a plethora of dictionaries and statutes to
conclude that [carbon monoxide] is [an irritant or contaminant].

After all, the very basis for [plaintiff's] lawsuit is her claim
that the release of carbon monoxide gas inside the rental house

"poisoned her" . . . .

Accordingly, . . . the plain language of

the pollution exclusion clause excludes . . . coverage . . . .
667 S.E.2d at 92. The allegations in the Underlying Lawsuit allege oxygen-

deprivation, not nitrogen "poisoning," and therefore, the less determinative
facts here demand the Court evaluate ordinary definitions of "irritant" and
"contaminant,"

Additionally, Plaintiff argues that "poison" is not a requirement of
"pollutant." (Pl.'s Reply to Def.'s Second Resp. to Mot. for Suram. J., Doc.
45, at 3-4.) The Court is not determining, nor is it tasked with determining,
whether "poison" or "poisoning," or the absence thereof, places a substance
within or outside the definition of "pollutant."

Reed found that carbon

monoxide, which poisoned the plaintiff in the underlying litigation,
unambiguously qualified as an irritant or contaminant, and therefore, a

pollutant. 667 S.E.2d at 92. The Court here must decide whether, based on the
allegations in the Underlying Lawsuit that the accumulation of nitrogen created
an oxygen-deprived environment, "irritant" or "contaminant" unambiguously
incorporate nitrogen. Even if "poison" or "poisoning" is not required to
classify a substance as an "irritant" or "contaminant," it does not necessarily
follow that all non-poisons or non-poisonous substances meet the definition of
"irritant" or "contaminant."

Defendant Xytex provided several more restrictive definitions in support of

its position as well.

(Def.'s Resp. to Mot. for Summ. J., Doc. 32, at 15—16.)

However, because the Court concludes that the broader definitions supplied by
Lake Hills do not render the plain language unambiguous, the Court need not
supply analysis on other definitions.

30

etc.'"

Id. at 438, 1010; Lake Hills, at 5-6.

These definitions

do not demand the conclusion that nitrogen is an '"irritant," and

resultingly, a "pollutant."

The Parties agree that nitrogen is

present in large quantities in the ambient air.
Facts, SI 13; Resp. to St. of Mat. Facts, SI 13.)

(St. of Mat.

On the one hand,

if nitrogen is inhaled in large quantities, with no adverse effect,
it cannot be said to annoy.

On the other hand, if it can create

an oxygen-deprived environment leading to asphyxiation, the Court
understands

annoys.

how

nitrogen

could

be

considered

something

Contaminant also yields multiple interpretations.

that

If

nitrogen was an unclean or bad substance, the human population
would be unable to inhale the substance in such large quantities.

Similarly, the air is not considered unclean or impure because it
contains nitrogen.

However, in an enclosed environment, it is

possible to interpret that nitrogen makes the air unsuitable for
breathing by forcing down the oxygen concentration. With multiple,
plausible interpretations, "irritant" and "contaminant" do not
decidedly encompass vaporized liquid nitrogen.

12 Plaintiff directs the Court to the history of pollution exclusions in general

liability contracts. The Court recognizes that Georgia law does not limit
"pollutant" to traditional industrial and environmental pollutants. Smith, 784
S.E.2d at 425.
The Court further recognizes that the insurance industry's
removal of "toxic" before "chemicals" in "absolute pollution exclusions," such

as those present here, expanded the number of chemicals qualifying as
pollutants.
Id.
The Court is not disregarding this history or Smith's
interpretation of it. The Court is not concluding that because the vaporized
liquid nitrogen was not an environmental pollutant it cannot be a "pollutant"
as defined in the relevant exclusions.

The Court is, however, determining that

the nitrogen in this case is not unambiguously a "pollutant" according to the
plain language of the exclusions.

31

If the plain language of the policy does not result in a

finding that the terms are unambiguous, Georgia law requires the

reviewing court to apply rules of contract construction.

Geiger

V. Ga. Farm Bureau Mut. Ins. Co., 699 S.E.2d 571, 573 (Ga. Ct.

App. 2010).

A hallmark of the rules of construction demands

consideration of ^^the policy as a whole, to give effect to each

provision, and to interpret each provision to harmonize with each
other."

ALEA London Ltd. v. Woodcock, 649 S.E.2d 740, 745 (Ga.

Ct. App. 2007).

[If contract provisions] are ^^susceptible to more than
one meaning, even if each meaning is logical and
reasonable[,]" . . . there are three [additional] wellknown

rules

of

(1) ambiguities

contract

are

construction

strictly

construed

that

apply:

against

the

insurer as the drafter; (2) exclusions from coverage the
insurer seeks to invoke are strictly construed; and

(3) the contract is to be read in accordance with the
reasonable expectations of the insured when possible.
Auto-Owners Ins. Co. v. Neisler, 779 S.E.2d 55, 59 (Ga. Ct. App.

2015); accord Boardman Petroleum, Inc. v. Federated Mut. Ins. Co.,

498 S.E.2d 492, 494 (Ga. 1998).

Finally, O.C.G.A. § 13-2-2 offers

additional rules of construction at the court's disposal upon

arriving at ambiguity.

See Fireman's Fund Ins. Co. v. Univ. of

Ga. Athletic Ass'n, 654 S.E.2d 207, 209 (Ga. Ct. App. 2007).
The Pollution exclusion in the Primary Policy states: ''This

insurance

does

not

apply to . . . 'Bodily

injury' . . . which

would not have occurred in whole or part but for the actual,

alleged or threatened discharge, dispersal, seepage, migration.

32

release or escape of ^pollutants' at any time,"^^

Although the

Court discusses Defendant Xytex's "arising out of" argument below,

the

provision must be read in its entirety in an attempt to

determine the meaning of "pollutant."

The language is clear that

coverage is excluded when the release of "pollutants" causes bodily
injury.

Defendant Xytex argues that because the Underlying Lawsuit
fails to allege that inhalation of nitrogen caused the health

issue, it is not a "pollutant."

Plaintiff, on the other hand,

argues that a substance as "innocuous" as storm water run-off meets

the pollutant exclusion.
1, at 12.)

(Br. Supp. Mot. for Summ. J., Doc. 25-

Although true, when reading the provision in its

entirety, the type of injury sustained is essential to analyzing
the exclusion.

Where property damage is the injury, as was the

case in Lake Hills, water run-off that has "significant detrimental

effects on the

quality of waters into which they flow" is

unambiguously a "contaminant."

The same i3 true for carbon

monoxide and lead poisoning caused bodily injury.

The adverse

health affects of lead poisoning and carbon monoxide poisoning are
well known.

Smith, 784 S.E.2d at 426 n.l ("[TJoxic effects of

lead have been known for centuries.")

Therefore, when bodily

13 The Court notes that the Excess Policy contains the words "[a]ny liability"

in the place of "bodily injury." However, because the "bodily injury" remains
the injury allegedly triggering coverage, the Court analyzes the Pollution
exclusions in the Primary and Excess Policies together.

33

injury results from the migration, release, or escape of leadbased paint or carbon monoxide, the substances unambiguously meet

the definition for ^^pollutant."
at 92,

Id. at 425-26; Reed, 667 S.E.2d

The same cannot be said for nitrogen.

The facts of this

case more closely resemble Barrett than Reed, Smith, or Lake Hills;
Barrett remains good law.

When read as a whole, the provision is susceptible to multiple

meanings.

Plaintiff reasons that because nitrogen displaces

oxygen in the air, it is an ''irritant" to persons attempting to
breathe the air and is a "contaminant" to the breathable air; the

resulting bodily injury arose from that pollution. Defendant Xytex

responds that the Underlying Lawsuit alleges that lack of oxygen
caused the injury and there is no contamination or irritation of

the body in the way carbon monoxide and lead contaminate and
irritate the body or water run-off contaminates a lake.

Finally, the Court cannot ignore the mandate to construe

ambiguities against the insurer and that insurance exclusions are
to be strictly construed.

There is evidence in the record that,

considering Defendant Xytex is in the business of storing tissue
at

low

temperatures

using

liquid

nitrogen.

Defendant

Xytex

reasonably expected that liability related to a nitrogen leak would
be insured.

(Scholer Decl.,

5-7.)

After reviewing the plain

Defendant Xytex argues that the Pollution exclusion violates Georgia public
policy. (Def.'s Resp. to Mot. for Summ. J., at 19.) Relying on Barrett,
Defendant Xytex claims that liquid nitrogen qualifies as a "main product" of
34

language of the insurance contract, analyzing the applicable law,
and applying Georgia's rules of contract construction, ambiguity
remains.

There is an issue of fact as to

intended

for

nitrogen

to

be

whether the Parties

considered

an

"irritant"

or

"contaminant," and the Court may not guess or speculate as to the
Parties' intent.

See RLI Ins. Co., 635 S.E.2d at 171-72.

2. Hazardous of Toxic Materials Exclusion

The Court finds Plaintiff's argument that the Hazardous or

Toxic Materials exclusion unambiguously excludes coverage less

convincing

than

its

Pollution

exclusion

argument.

Again,

reviewing the plain language, "hazardous or toxic materials" is
defined as "[a]sbestos, lead, silica dust, toxic dust, ^fungi',

bacteria,

organic

pathogens,

bio-organic

growth

or

systemic

chemical poison." Nitrogen is not enumerated. Instead, Plaintiff

argues that nitrogen is undoubtedly a "systemic chemical poison."
{Br. Supp. Mot. for Summ. J., at 14.) Because systemic chemical

poison

is

not

defined.

"systemic" and "poison."

Plaintiff

combines

definitions

of

The Parties appear to agree that

"systemic" is intended to mean "affecting the body generally" or
something similar. The issue, like under the Pollution exclusion.

its business and excluding coverage for the release of nitrogen gas defies
Defendant Xytex's reasonably held expectations for coverage. (Id.) The Court
finds there is insufficient evidence in the record to determine whether liquid
nitrogen is one of Defendant Xytex's main products as a matter of law.
35

becomes whether the plain language of the exclusion is read to
include nitrogen as a poison.

Here, nitrogen is not certainly a poison, and the Court is
faced with equally plausible interpretations of poison.

'"Poison"

carries either its broad meaning as a substance that inhibits the

activity of another substance or the course of a chemical reaction
or process, (id. at 14) or more narrow meaning as a substance that
causes illness or death when absorbed.

Summ. J., at 21.)

(Def.'s Resp. to Mot. for

The plain language of the Policies does not

require a finding that Plaintiff's definition prevails.
Plaintiff

further

argues

that

based

on

the

underlying

allegations — namely. Defendant Xytex's failure to advise or warn
of the presence and storage of hazardous gas in the warehouse

(Underlying

Lawsuit

Compl.,

^ 10) - that

nitrogen

hazardous.

(Br. Supp. Mot. for Summ. J., at 15.)

must

be

However, as

noted in footnote eight, supra, the Court may not substitute
another definition for "hazardous or toxic materials."

The term

"hazardous or toxic materials" is plainly defined in the Primary

Policy.

Consequently, for the purposes of this exclusion, the

meaning of "systemic chemical poison" is determinative, and the
Court

concludes "systemic

chemical

poison" carries

plausible

meanings that do not necessarily encompass liquid nitrogen.

Turning to the rules of contract construction, the ambiguity
is not resolved.

Extrinsic evidence on the issue is limited, and

36

the traditional rules of construction do not materially aid in

resolving the ambiguity.

For this and other reasons discussed in

the contract construction analysis for the Pollution exclusion, a
fact issue as to the intent of the Parties remains.
3. The Exclusions^

Causation Requirements

Defendant Xytex further contests summary judgment because it
contends a fact issue exists as to whether the nitrogen release

caused the injuries complained of in the Underlying Lawsuit.
According to the

relevant exclusions, to succeed

on

summary

judgment. Plaintiff is required to show the absence of a genuine
issue of material fact that nitrogen is a ^^pollutant" or ^'hazardous
or toxic material" and that the release of the ^^pollutant

or

^^hazardous or toxic material" caused Greg Meagher's death,
a. Primary Policy

In relevant part, the Primary Policy excludes coverage for

''''bodily injury' . . . which would not have occurred in whole or

part but for the . . . release . . . of 'pollutants' at any time.
The plain language of the Policy, "would not have occurred in whole
or part but for," is unambiguous.

Barrett concluded that when an

exclusion provision contains causation language such as "arising
out of," courts apply a "but for" or "cause-in-fact" analysis.
696 S.E.2d at 332.

The Parties dispute whether the release of

The Court finds no material difference between the language "arising out of"
and **would not have occurred but for." For that reason, Georgia's application
of the "but for" test for causation in insurance policy exclusions applies here.
37

nitrogen was, in part, a but for cause of the bodily injury.

In

light of Barrett, Plaintiff has failed to make a showing that the
release of nitrogen was a partial but for cause as a matter of
law.

The Court agrees with Plaintiff that, according to the plain

language. Plaintiff is not required to show the release of nitrogen
was the

sole cause.

The

record demonstrates that

whether the

release of nitrogen was a partial but for cause of the injuries is
in dispute because nitrogen is naturally harmless.
Barrett

instructs,

an

evaluation

of

the

Moreover, as

Underlying

Lawsuit

complaint reveals that several actions attributed to Defendant
Xytex beyond the release of liquid nitrogen are alleged to have
caused the injury.

(Underlying Lawsuit Compl., SlSl 40-44.)

These

factual disputes make it improper for the Court to determine which,

if any, of the alleged causes constitute a partial but for cause
of the bodily injury as a matter of law.

Although the language differs slightly, the Court reaches the
same conclusion for the Hazardous or Toxic Materials exclusion:

^^This

insurance

injury . . . arising

does

out

not

of,

apply

caused

^hazardous or toxic materials' . . . ."

or

to: . . . ^[b]odily

contributed

to

by

Because the language of

the provision includes the words ^^contributed to," Plaintiff is
not required to show that the release of a ^^hazardous or toxic
material" was the only cause.

However, Plaintiff still must

38

satisfy the but for causation requirement.

For the reasons set

forth above, a jury must resolve the remaining fact issues,
b. Excess Policy

The

Pollution

exclusion

in

the

Excess

Policy

requires

Plaintiff to make a greater showing than the Primary Policy: "This

policy does not apply to: . . . [a]ny liability arising out of
the . . . release of 'pollutants' at any time."

The "arising out

of" language is unambiguous and precisely tracts the language in
Barrett.

696 S.E.2d at 332.

but for causation showing.

Therefore, the language mandates a

Furthermore, the Excess Policy does

not permit a showing that the release of the "pollutant" was a

partial cause.

Succeeding at the summary judgment stage on the

causation requirement under the Excess Policy demands that the
release of a "pollutant" was the single, undisputed cause-in-fact
of the alleged injuries as a matter of law.

Again, Plaintiff has

not met that burden.

4. Punitive Damages Exclusions

Defendant Xytex concedes that the Primary and Excess Policies
exclude coverage for punitive damages in the Underlying Lawsuit.
(Def.'s Resp. to Mot. for Summ. J., at 7 n.3.)

Because Defendant

Xytex does not oppose that the language excluding coverage for
punitive damages is unambiguous, summary judgment is proper as to
Plaintiff's claim that it has no duty to indemnify for punitive
damages pursuant to the Policies.

39

5. Reimbursement of Defense Costs

Plaintiff's motion for summary judgment asks the Court to
order

the

reimbursement

of

defense

costs

upon

reaching

the

conclusion that it had no obligation to defend the Underlying
Lawsuit.

''Whether an insurer has a duty to defend depends on the

language of the policy as compared with the allegations of the

complaint." HDI-Gerlinq Am. Ins. Co. v. Morrison Homes, Inc., 701
F.3d 662, 666 (11th Cir. 2012) (quoting Hoover v. Maxum Indem.

Co., 730 S.E.2d 413, 418 (Ga. 2012)).

"For an insurer to be

excused under Georgia law from its duty to defend an action against
its insured, the allegations of the complaint must unambiguously

exclude coverage under the policy."

Id. (citing JNJ Found.

Specialists, Inc. v. D.R. Morton, Inc., 717 S.E.2d 219, 223 (Ga.

Ct. App. 2011)). The Court determined that the Policies' decisive
terms are ambiguous.

Because the Underlying Lawsuit complaint's

allegations fail to unambiguously exclude coverage under the
Policies, Plaintiff is obligated to defend the Underlying Lawsuit
under Georgia law.^®
V. CONCLUSION

In sum, the following IS HEREBY ORDERED:

(1) The Parties' joint motion to add defendants (Doc. 48) is
GRANTED.

The Clerk is DIRECTED to ADD Lindsey Meagher, as Executor

The conclusions herein render the reimbursement issue moot.

refrains

from

addressing

whether

Georgia

reimbursement."

40

recognizes

Thus, the Court

the

right

of

for the Estate of Greg Meagher; Xytex Cryo International, LTD.;

and

Xytex

Properties LLC as

defendants in

this

action.

All

submissions filed on behalf of Lindsey Meagher, individually; Mary

Meagher; and Emma Meagher are treated as if they were filed on
behalf of Lindsey Meagher, as Executor for the Estate of Greg

Meagher.

Additionally, all submissions filed on behalf of Xytex

Tissue Services, LLC are treated as if they were filed on behalf

of Xytex Cryo International, LTD. and Xytex Properties LLC.

The

defendants added pursuant to this Order are bound by all other
rulings contained herein.

(2) Plaintiff's motion to exclude testimony (Doc. 24) is
GRANTED IN PART and DENIED IN PART.

offers

opinions

regarding

To the extent Dr. Zuckerman

Plaintiff s

duties

to

defend

and

indemnify under the contract or general opinions regarding the

provisions in the Primary and Excess Policies that constitute legal
arguments, that testimony is excluded.

Moreover, to the extent

Dr. Zuckerman's testimony requires knowledge of the insurance

industry, such testimony is also excluded.

Dr. Zuckerman is

permitted to testify regarding all other matters within his
expertise, chemistry.

(3) Plaintiff's motion for summary judgment (Doc. 25) is
GRANTED IN PART and DENIED IN PART.

As a matter of law. Plaintiff

has no duty to indemnify for punitive damages under the Policies.
The remainder of Plaintiff's motion for summary judgment is denied.

41

ORDER ENTERED at Augusta, Georgia, this

of March,

2019.

J. RAl^ML^ALL, CHIEF JUDGE

UNITE^ySTATES DISTRICT COURT
Southern district of Georgia

42