An insurance company with a potential $25 million liability from a 2007 Houston office fire is claiming smoke that killed three people was "pollution" and surviving families shouldn't be compensated for their losses since the deaths were not caused directly by the actual flames.
Great American Insurance Company is arguing in a Houston federal court that the section of the insurance policy that excludes payments for pollution — like discharges or seepage that require cleanup — would also exclude payouts for damages, including deaths, caused by smoke, or pollution, that results from a fire.
"This took me by surprise," said Don Jackson, the Houston lawyer for building owners Boxer Property Management Corp. He said the insurance company that has the primary $1 million policy on the premises hasn't made this argument and he disagrees with the effort by excess insurance carrier Great American.
"We think it is wrong. It's inappropriate for the insurance company to try to run and hide now," said Jackson.
Tom Baker, an insurance law expert who teaches at Penn Law school, said property insurance has a long history of being designed for fire coverage and excluding a fire's smoke is applying the law too broadly.
But, he said, smoke can be tricky and Texas may be a state where the literal meaning could be considered rather than common understanding.
Well yes this is Texas, where if it is at all possible to screw the little guy in court a company (sometime with the help of political allies) will do so. Apparently no has made the argument before in Texas that fire smoke is "pollution" so it will be up to U.S District Judge Lee Rosenthal, who has a reputation as a thorough and fair judge, to quash this nonsensical argument.