Lopez et al v. Sturdivant et al

Filing 37

Memorandum Opinion and Order granting 25 MOTION for Summary Judgment on Coverage Issues, finding as moot 27 MOTION for Summary Judgment on Bad Faith Claim. A separate judgment shall be entered. Signed by District Judge Tom S. Lee on 6/16/11 (LWE)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF MISSISSIPPI
EASTERN DIVISION
RON LOPEZ and CHRISTIE LOPEZ
VS.

PLAINTIFFS
CIVIL ACTION NO. 4:10CV55TSL-LRA

SHELTER INSURANCE COMPANY

DEFENDANT

MEMORANDUM OPINION AND ORDER
This cause is before the court on the motion of defendant
Shelter Insurance Company for summary judgment on coverage issues,
and a separate motion for summary judgment on bad faith claim,
brought pursuant to Rule 56 of the Federal Rules of Civil
Procedure.

Plaintiffs Ron Lopez and Christie Lopez have responded

to the motions and the court, having considered the memoranda of
authorities, together with attachments, submitted by the parties,
concludes that Shelter’s motion for summary judgment on the
coverage issues is well taken and should be granted, which renders
plaintiffs’ bad faith claims, and Shelter’s motion thereon, moot.
According to their complaint, in December 2007, Ron and
Christie Lopez purchased and took possession of a home in
Waynesboro, Mississippi that had been newly constructed by home
builder Arthur Sturdivant.

Subsequently, in 2009, the Lopezes

began noticing unexplained noxious odors, damage to appliances and
damage to exposed metals in their home.

They also began

experiencing adverse health effects, which forced them and their
two minor children to move out of the home and into a garage on

the property.

Although they initially were unaware of the cause

of the problems they were experiencing, at some point, they
learned that the home “had been constructed with defective Chinese
manufactured drywall that was causing all of the problems in the
home, the unexplained adverse health effects, and causing the
home to be uninhabitable.”1
1

The Lopezes’ experience is not uncommon. As the court
explained in In re Chinese Manufactured Drywall Products Liability
Litigation, 706 F. Supp. 2d 655 (E. D. La. Apr. 8, 2010), from
2004 through 2006, a shortage of construction materials in the
United States, including drywall, resulted in the importation of
Chinese-manufactured drywall, which was used primarily in the
construction and refurbishing of homes in coastal areas of the
United States, notably the Gulf Coast and East Coast. Id. at 659.
Sometime after the installation of the Chinese drywall,
homeowners began to complain of emissions of smelly
gasses, the corrosion and blackening of metal wiring,
surfaces, and objects, and the breaking down of
appliances and electrical devices in their homes, and
many began to complain of various physical afflictions
believed to be caused by the Chinese drywall, all of
which led to the filing of lawsuits in state and federal
courts against homebuilders, developers, installers,
realtors, brokers, suppliers, importers, exporters,
distributors, and manufacturers who were involved with
the Chinese drywall.
Id. As the court went on to explain, the Chinese-manufactured
drywall at issue in these cases differs from typical, benign
drywall for the following reasons:
1. Chinese drywall has a significantly higher average
concentration of strontium and significantly more
detectable levels of elemental sulfur.
2. Chinese drywall releases reduced sulfur gases.
... These emissions are also confirmed by strong odors.
3. The sulfur gases released by Chinese drywall are
irritating to the human body. ... Exposed individuals
reported irritation of the eyes, respiratory system, and
skin, among other things.
4. The sulfur gases released by Chinese drywall cause
offending odors in homes, making them hard if not
impossible to live in. ...

2

Prior to their purchase of the home in 2007, the Lopezes had
obtained a policy of homeowners’ insurance from Shelter.

As a

result of the damage to their home, the Lopezes made a claim for
recovery on the policy.

Upon Shelter’s failure to pay, they filed

the present action charging that Shelter has wrongly denied
coverage of their claim.2
In its present motion, Shelter asserts it is entitled to
summary judgment declaring that its policy affords no coverage for
the Lopezes’ claims, because the injuries and damages which the
Lopezes claim as a result of the use of allegedly defective
Chinese-manufactured drywall in the construction of their home
5. The sulfur gases released by Chinese drywall are
corrosive to metals, particularly copper and silver. ...
“Corrosion” is defined by the ASTM as the chemical or
electrochemical reaction between a material, usually a
metal, and its environment that produces a deterioration
of the materials and its properties. Copper and silver
metal components in [homes] are extremely vulnerable to
corrosion from exposure to the sulfur gases. ... The
sulfur gases, in reacting with metals, form sulfide
deposits on the surfaces of the metals. ... For
example, a reaction of sulfur gases with copper pipes
will form copper sulfide on the metals. ... The
reaction of sulfur gases with metals can be said to be
“consuming” the useful, pure metals by replacing those
metals with sulfides. ...
6. The corrosion on metals caused by the sulfur gases
emitted by Chinese drywall causes premature failure of
electrical & mechanical devices. ...
Id. at 663-666.
2

Plaintiffs’ suit was filed in the Circuit Court of Wayne
County, Mississippi against the builder, Arthur Sturdivant, for
breach of contract and negligence, among other claims, as well as
against Shelter. The case was removed to this court, following
which the claim against Sturdivant was severed and remanded.

3

were not caused by an “accident,” as that term is defined in the
policy and hence do not fall within the policy’s coverage
provisions, and/or because the claimed damages are explicitly
excluded from coverage by two separate policy exclusions.
Shelter’s Policy
In relevant part, Shelter’s policy provides coverage, as
follows:
COVERAGE A - DWELLING
1. We cover accidental direct physical loss to the
following property, except for those perils and losses
excluded under the heading “Exclusions Applicable to
Coverages A & B.”
(a) Your dwelling including building structures attached
to it, at the residence premises....
DEFINITIONS USED THROUGHOUT THIS POLICY
1. Accident means an action or occurrence, or a series
of actions or occurrences, that:
(a) started abruptly,
(b) during the policy period; and
(c) directly resulted in bodily injury or property damage.
...
2. Accidental direct physical loss means loss of possession
of, or actual physical damage to, a part of the covered
property which is caused by an accident
EXCLUSIONS APPLICABLE TO COVERAGES A & B.
We do not cover any loss or damage if it would not have
occurred in the absence of any event or condition listed
below. That loss or damage is excluded from coverage
regardless of:
(a) the proximate cause of that event or condition;
(b) the fact that other events or conditions which are
not excluded, caused the loss or damage;
(c) the fact that other events or conditions, which are
not excluded, contributed to the loss or damage;
(d) the sequence of the events or conditions that caused
the loss or damage;
(e) whether the events and conditions that caused the
loss or damage occurred suddenly or gradually;
(f) whether the loss or damage is isolated or
widespread; or

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(g) whether the loss or damage arises from natural
forces, external forces, or a combination of such
forces.
...
10. ... latent defect ... contamination....
...
19. Any defect, inadequacy, fault, unsoundness or
weakness in:
(a) material used in construction or repair;
...
Accidental Loss
In its motion, Shelter argues that the Lopezes have not and
cannot prove an “accidental direct physical loss” to their home,
as they allege no action or occurrence that “started abruptly.”
In their response to the motion, plaintiffs do not deny that their
losses did not start abruptly.

Rather, they suggest that this

court may disregard the Shelter policy’s definition of “accident”
and instead apply the definition of “accident” indicated by the
Mississippi Supreme Court in Allstate Ins. Co. v. Moulton, as
“anything that happens or is the result of that which is
unanticipated....

As used in insurance policies, it is simply an

... unexpected event, usually of an afflictive or unfortunate
character.”

464 So. 2d 507, 509 (Miss. 1985) (quoting Winkler v.

Ohio Cas. Ins. Co., 441 A.2d 1129, 1132).

Plaintiffs contend that

by reference to the definition of “accident” cited in Moulton, the
physical loss caused in their home by the Chinese drywall is
“accidental” for purposes of coverage since the damage caused by
the drywall was “unexpected” and “unanticipated” and not the
result of any intentional act.

5

However, the court may look outside the policy for the
definition of a policy term only where the policy itself does not
provide a definition, see Corban v. United Servs. Auto Ass’n, 20
So. 3d 601, 609 (Miss. 2009) (court’s role is to render fair
reading and interpretation of policy by examining its
express language and applying “ordinary and popular meaning” to
any undefined terms”); and plaintiffs’ insinuation to the contrary
is plainly unfounded.

As Shelter notes, Mississippi law requires

that policy terms and definitions be enforced as written.

See

Noxubee County School Dist. v. United Nat’l Ins. Co., 883 So. 2d
1159, 1166 (Miss. 2004) (holding that “[i]nsurance policies are
contracts, and as such, they are to be enforced according to their
provisions” and “[i]nsurance companies must be able to rely on
their statements of coverage, exclusions, disclaimers,
definitions, and other provisions, in order to receive the benefit
of their bargain”) (citing United States Fid. & Guar. Co. v.
Knight, 882 So. 2d 85, 92 (Miss. 2004)).

Applying and enforcing

the definition of “accident” as set forth in Shelter’s policy, it
is clear that plaintiffs’ loss was not “caused by an accident” and
that the policy therefore affords no coverage for the Lopezes’
claimed losses.3

3

The court notes that in In re Chinese Manufactured
Drywall Products Liability Litigation, two of the insurers’
policies required that the direct physical loss be “sudden and
accidental” for coverage to apply. On the issue whether loss
caused by Chinese drywall was “sudden,” the court noted that the
policies did not define “sudden,” but that Louisiana jurisprudence
defined “sudden” for purposes of a homeowners' insurance policy to

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Exclusions
Shelter further argues that even if plaintiffs had asserted
an accidental physical loss within the policy’s coverage
provisions, such coverage would nevertheless be excluded by the
policy exclusion for loss or damage caused by “latent defect[s]”
or “contamination,” and by the “faulty materials” exclusion.

In

the court’s opinion, while Shelter has not proven that the “latent
defects” exclusion applies, the exclusions for loss caused by
“contamination” and “faulty materials” are clearly applicable.
Latent Defect
Shelter’s policy excludes from coverage losses caused by
“latent defect”, but it does not define the term, and there are no
Mississippi cases which define the term.

However, as this is a

standard exclusion in a homeowners’ policy, it is not difficult to
find cases that have addressed its meaning, including cases
involving Chinese drywall.
In Travco Insurance Co. v. Ward, 715 F. Supp. 2d 699 (E.D.
Va. 2010), the court held that losses to the insured home from
defective Chinese Drywall fit squarely within Virginia’s

mean “an event which is either abrupt (though expected), or
unexpected.” 759 F. Supp. 2d 822, 834 (E.D. La. 2010). The court
found that under these definitions, the damage caused by the
Chinese drywall in the homes of the insureds was accidental, as
such damage was alleged to have been “unexpected,” “unknown,” and
“unusual.” Id. Notably, the court turned to state law for a
definition of “accident” since the policy did not include a
definition; and the court found the losses to be the result of an
accident because the definition included losses caused by events
that were either abrupt or unexpected, and the losses were claimed
to have been unexpected (although not abrupt).

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definition of “latent defect,” as “flaws in property that are
undetectable, and hence unexpected,” id. at 710 (citing Glens
Falls Ins. Co. v. Long, 195 Va. 117, 77 S.E.2d 457, 459 (1953),
which defined “latent defect” as “defect which reasonably careful
inspection will not reveal”), and which are “‘integral to the
damaged property by reason of its design or manufacture or
construction,’” id. (quoting U.S. West v. Aetna Cas. & Sur. Co.,
117 F.3d 1415 (4th Cir. 1997)).

However, while the court held

that damage to the house itself was excluded, it held that the
exclusion did not apply to damage to the home’s air conditioner
and garage door, reasoning that “[t]he Chinese Drywall in the Ward
Residence is not integral to the damaged air conditioner or garage
door.

To the contrary, there is no indication that the air

conditioner or the garage door were manufactured or constructed in
a defective manner.”

Id. at 711.

The court in In re Chinese Manufactured Drywall Products
Liability Litigation (In re Chinese Drywall Litigation), 759 F.
Supp. 2d 822 (E.D. La. Dec. 16, 2010), concluded that the analysis
in Travco, while thorough and sound, could not be given much
weight in a case involving Louisiana law, since Louisiana has a
different definition of “latent defect” than Virginia:

“The

definition of latent defect under Louisiana law requires that the
defect be hidden and not discoverable upon a reasonable, customary
inspection or test.”

Id. at 836 (citing Nida v. State Farm Fire &

Cas. Co., 454 So. 2d 328, 335 (La. App. 3 Cir. 1984)).

8

The court

considered it a “close call” whether the latent defect exclusion
applied to the losses from the Chinese drywall, noting that while
the insureds “were not aware that their homes contained Chinesemanufactured drywall and the damages to their homes were caused by
this drywall until they learned of the problem through the media
or otherwise,” they “were aware before the media reports that
their homes contained a foul odor, their electrical wires and
components were blackened, and their electrical devices and
appliances were failing.”

Id. at 838.

It was unclear to the

court “whether the latent defect exclusion is avoided through
knowledge or discoverability of the specific cause of defects in
an insured property or simply by the knowledge of the defects
themselves,” and ultimately, being “unable to make a definitive
determination as to whether the damage caused by the Chinese
drywall in the Plaintiffs' homes constitutes a latent defect,” the
court concluded the insurers had failed to meet their burden to
prove applicability of the latent defect exclusion.

Id. at 838-

39.
More recently, in Ross v. C. Adams Construction & Design,
L.L.C., --- So.3d ----, 2011 WL 2328271 (La. App. 5 Cir. June 14,
2011), the court, applying an identical Louisiana definition of
“latent defect,” found a “latent defect” where the Chinese drywall
that caused the damages sustained by homeowners “was hidden and
unknown for two years.”

2011 WL 2328271.

9

The “latent defect” definition cited in In re Chinese Drywall
Litigation and Ross, i.e., as “a defect that is hidden or
concealed from knowledge, as well as from sight, and which a
reasonable customary inspection would not reveal,” Ross, 2011 WL
2328271, is typical.

See Black's Law Dictionary, 794 (5th ed.

1979) (defining “latent defect” as “[a] hidden or concealed defect
... which could not be discovered by reasonable and customary
inspection,”); Couch on Ins. § 153:77 (3d ed. 2010) (defining
“latent defect” as “an imperfection in the materials used which
could not be discovered by any known and customary test”)
(citations omitted).
The Chinese drywall in the Lopezes’ home was defective from
the time it was initially installed, although the defect did not
manifest itself until some time after they had begun living in the
home.

Even then, the Lopezes were unaware initially that the

cause of the problems they were experiencing with their home was
the Chinese drywall (there is nothing to indicate they were aware
their home had been constructed with Chinese drywall); and they
allegedly only discovered through media reports and subsequent
investigation that Chinese drywall was the likely culprit.

These

facts would certainly tend to suggest the defect was latent.
However, as the court recognized in In re Chinese Drywall
Litigation, it is Shelter’s burden to prove that the exclusion
applies, see Commercial Union Ins. Co. v. Byrne, 248 So. 2d 777,
782 (Miss. 1971), and while Shelter has plausibly argued that the

10

Chinese drywall was a “latent defect,” it has not actually proven
that the defective drywall could not have been discovered by any
known and customary test.

The court therefore is unable to

conclude on the present motion that the “latent defect” exclusion
applies.
Faulty Materials
The policy excludes coverage for loss or damage caused by
“any defect, inadequacy, fault, unsoundness or weakness in
material used in construction,” i.e. the “faulty materials”
exclusion.

The policy itself does not define “defect” or “fault,”

and no Mississippi case defines these terms in the context of a
defect or faulty materials exclusion in a homeowners’ policy.

The

Lopezes note that in Merriam-Webster Dictionary, “fault” is
defined as “a physical ... imperfection or impairment,” and
“defect” as “an imperfection that impairs worth or utility.”
Http://www.merriam-webster.com/dictionary.

And Black’s Law

Dictionary (9th ed. 2009) defines “material” as “of or relating to
matter; physical”.

On the basis of these definitions, the Lopezes

reason that since the Chinese-manufactured drywall in their homes
is functioning properly and serving its intended purposes, its
utility is in no way impaired and thus it is not “faulty” and the
exclusion should not apply to preclude coverage of their claim.
Three courts have considered and rejected this very argument.
As here, the insurer in Travco argued that the exclusion for “loss
caused by ... [f]aulty, inadequate or defective ... [m]aterials

11

used in ... construction ... of part or all of the property”
applied "to preclude coverage of all damage resulting from the
defect in the drywall," whereas the insured contended the
exclusion did not apply because the Chinese Drywall "[was] serving
its normal function and purpose and has not caused damage to
itself."

715 F. Supp. 2d at 712.

The court was skeptical of the

argument that the drywall was “serving its intended purpose”:
Although the Drywall has not collapsed or otherwise
physically deteriorated, it is certainly not serving its
purpose as a component of a livable residence. In any
event, Defendant's argument-that an item cannot be
faulty or defective if it is "serving its intended
purpose"-is contrary to ordinary English usage. In
common parlance, the word "faulty" is not limited to
faults that prevent an entity from accomplishing its
intended purpose and itself. See Oxford English
Dictionary (2d Ed. 1989) (defining "faulty" as
"[c]ontaining faults, blemishes or defects; defective,
imperfect, unsound"). The same principle applies to the
word "defective."
Id. at 712-713.

It noted, moreover, that in his state court

lawsuit, the insured had himself repeatedly described the drywall
as “defective”; and while this was not determinative, the court
considered that “in the absence of some evidence that the parties
intended to assign a specialized meaning to the word ‘defective’
in the Policy, the fact that Defendant himself described the
Drywall as ‘defective’ certainly weighs in favor of the
application of the exclusion.”

Id. at 713.

As in Travco, Judge Fallon in In re Chinese Drywall
Litigation found that Chinese-manufactured drywall was subject to
the "faulty materials" exclusion in the plaintiffs' homeowners'

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policies, and that the loss resulting therefrom was excluded from
coverage.

759 F. Supp. 2d at 845.

The court likened the drywall

to materials containing asbestos and lead in buildings, which had
been found to trigger the "faulty materials" exclusion, and to
radioactive table bases which in Falcon Products, Inc. v.
Insurance Co. of the State of Pennsylvania, 615 F. Supp. 37 (E.D.
Mo. 1985), had been found to fall within the "faulty materials"
exclusion because, while they could serve their intended purpose
as table bases, they were "unusable" because of the contaminated
materials used in constructing them.

Id. at 845.

The court

observed that
[a]lthough the drywall serve[d] its intended purpose as
a room divider, wall anchor, and insulator, the
allegations in the complaints provide that the drywall
emits foul-smelling odors and releases gases which
damage silver and copper components in the home,
including electrical devices, appliances, and wiring.
Accordingly, the drywall is like the radioactive table
bases and building components containing asbestos or
lead which function for all practical purposes as table
bases and building components, but are faulty because
the materials of which they are composed.
759 F. Supp. 2d at 845-46.

The court opined that

The broad definition of faulty materials under common
usage of a defect or imperfection in a physical thing
lends further support to the finding that the Chinese
drywall constitutes a faulty material. Furthermore, as
the Travco court recognized, it is inconsistent to argue
that Plaintiffs have suffered a loss due to the Chinese
drywall, but that the drywall is not in any way faulty.
The whole basis of the Plaintiffs' claims is that the
Chinese drywall in question was faulty and rendered
homes unlivable.
Id. at 846.

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And most recently, in Ross, the court, citing Travco, agreed
with the insurer’s position and found that “even if the drywall is
still in place in the home, it is not truly serving its intended
purpose as a component of a livable residence because of its
inherent qualities of emitting the sulfuric gas.”
2328271, 2.

Ross, 2011 WL

This court concurs fully with the courts’ reasoning

and conclusion in these cases, and accordingly, concludes that the
losses claimed by plaintiffs herein are subject to the “faulty
materials” exclusion in Shelter’s policy.4

4

Plaintiffs’ complaint, in which the following
allegations appear, repeatedly alleges that the drywall in their
home was defective:
The new home they purchased from Defendant Sturdivant
had been constructed with defective Chinese manufactured
drywall that was causing all of the problems in the
home, the unexplained adverse health effects, and
causing the home to be uninhabitable;
the Defendant Sturdivant is aware of the defective
nature of the Chinese-manufactured drywall that he used
in the construction of [their] home ...;
the Defendant Sturdivant, despite his knowledge of the
defective nature of the Chinese-manufactured drywall,
... knowingly used the defective product in the
construction of their home...;
Defendant Sturdivant knew our should have
drywall used in constructing the home was
not function as intended and/or created a
unreasonable, dangerous side effects, ...
rendering the home uninhabitable; and

known that the
defective, did
high risk of
thereby

the construction and sale of the home to the Plaintiffs
containing defective Chinese-manufactured drywall
constitutes a breach of express and implied warranties
of habitability and other warranties ....

14

Contamination
Shelter’s policy also excludes damages for losses caused by
“contamination.”

Both Travco and In re Chinese Drywall Litigation

considered exclusions for losses caused by contaminants, but they
did so in the context of traditional pollution exclusions, which
defined "pollutants" to include "contaminants."

The court in In

re Chinese Drywall Litigation concluded the pollution exclusion
did not apply to the losses from the Chinese-manufactured drywall
since Louisiana law interprets such pollution exclusions to apply
only to traditional industrial environmental pollution claims.
re Chinese Drywall Litigation, 759 F. Supp. 2d at 841.5

In

In

contrast, the court in Travco held that losses from Chinese
drywall were covered by the exclusion since Virginia law does not
limit applicability of pollution exclusions to traditional
environmental pollution and since the losses were caused by a
contaminant.

Travco, 715 F. Supp. 2d at 717.

In support of the

latter conclusion, the court wrote:
Although the Drywall itself may not be a pollutant, the
gases it releases are. There is no dispute that the
Chinese Drywall has released reduced sulfur gases into
the Ward Residence. ... [T]he broad definition of
pollutants in the Policy includes "any solid, liquid,

5

The court notes that in the recently-decided Ross v. C.
Adams Construction & Design, L.L.C., --- So.3d ----, 2011 WL
2328271 (La. App. 5 Cir. June 14, 2011), the court did not
recognize this limitation, and held that “[t]he sulfuric gas
emitted from the Rosses' drywall qualifies as a pollutant pursuant
to this definition in the policy. Therefore, any damage caused by
the release of these gases is excluded from coverage by the
homeowners insurance policy.”

15

gaseous or thermal irritant or contaminant, including
smoke, vapor, soot, fumes, acids, alkalis, chemicals and
waste." Under any reasonable definition of these terms,
the gases released into the Ward Residence qualify as
irritants and contaminants.
Id. at 715.
Since the contamination exclusion in Shelter’s policy does
not appear in the context of a pollution exclusion, a
determination of the applicability of the exclusion does not
depend on whether Mississippi broadly or narrowly interprets
pollution exclusions.

However, the court’s conclusion in Travco

is relevant and persuasive.

The court noted in Travco that

"contaminant," as the term is used in insurance contracts, has
been defined as a "substance that, because of its nature and under
the particular circumstances, was not generally supposed to be
where it was located and caused injurious or harmful effects to
people, property, or the environment."

Id. at 718 n.9 (quoting

Hastings Mut. Ins. Co. v. Safety King, Inc., 286 Mich. App. 287,
778 N.W.2d 275 (2009)); see also Hastings Mut. Ins. Co., 778
N.W.2d at 280 ("contaminate" means "to make impure or unsuitable
by contact or mixture with something unclean, bad, etc.," and
"something that contaminates or carries contamination")(quoting
Random House Webster's College Dictionary (1997)); American Cas.
Co. of Reading, Pa. v. Myrick, 304 F.2d 179, 183 (5th Cir. 1962)
(finding definition of “contamination” as the “‘state of being
contaminated; an impurity; that which contaminates; to make
inferior or impure by mixture; an impairment of purity; loss of

16

purity resulting from mixture or contact’ [to be] consistent with
common understanding, see Webster's New International Dictionary,
contamination, contaminate, which is the proper criterion for
construing words in an insurance policy”).
The Travco court concluded that "[t]he sulfur gas in the Ward
Residence clearly fits within this definition, because it was not
‘supposed to be' in the Residence and it has harmed Defendant and
the components of his home."

715 F. Supp. 2d at 718 n.9.

Other

cases have found a contamination exclusion unambiguous, and
applicable in analogous circumstances on the basis of the same or
similar definitions of “contamination.”

See, e.g., Conde v. State

Farm Fire & Cas. Co., 43 F.3d 1471, 1994 WL 705073, 2 (6th Cir.
1994)(Table) (applying Webster's Third International Dictionary's
definition of contamination as "unfit for use by the introduction
of unwholesome or undesirable elements" to find that insured's
home was "contaminated" where it had been negligently treated for
termites with chlordane, resulting in adverse health effects and
forced insureds to move from home); Hartory v. State Auto. Mut.
Ins. Co., 552 N.E.2d 223 (Ohio App. 1988) (applying Webster's
definition and holding that contamination exclusion precluded
coverage for damages resulting when methane gas from a neighboring
landfill penetrated the plaintiffs' home forcing them to
evacuate); Auten v. Employers Nat. Ins. Co., 722 S.W.2d 468
(Tex.App.–Dallas 1986) (holding that insureds’ loss resulting from
exterminator's misapplication of pesticides which rendered their

17

home uninhabitable, was caused, as matter of law, by contamination
and, thus, was excluded under terms of all-risks homeowners’
policy); St. Mary's Area Water Auth. v. St. Paul Fire & Marine
Ins. Co., 464 F. Supp. 2d 397, 415 (M.D. Pa. 2006) (finding that
escape of chlorine gas resulting in the cloud of hydrochloric and
hypochlorous acids that settled on equipment throughout the
insured premises met definition of "contamination," as "it
rendered the covered property unfit for use by the introduction of
unwholesome or undesirable elements by entering into or coming in
contact with the covered property"), vacated on other grounds, 472
F. Supp. 2d 630 (M.D. Pa. 2007).

The same analysis applies here,

and leads the court to conclude that the contamination exclusion
in Shelter’s policy applies to preclude coverage for the Lopezes’
claimed losses.
Conclusion
Based on the foregoing, it is ordered that Shelter’s motion
for summary judgment is granted.
A separate judgment will be entered in accordance with Rule
58 of the Federal Rules of Civil Procedure.
SO ORDERED this 17th day of June, 2011.

/s/ Tom S. Lee
UNITED STATES DISTRICT JUDGE

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