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Wisconsin Court of Appeals Concludes That Pollution Exclusion is Not Applicable Despite the Presence of Bat Guano On Residence

On October 19, 2010, the Wisconsin Court of Appeals issued a decision in Hirschhorn v. Auto-Owners Insurance Company, Appeal 2009 AP 2768 (“Hirschhorn”) in which the Court held that despite the fact that bat guano was on the homeowners’ vacation residence, the pollution exclusion in the homeowners policy was ambiguous and construed it in favor of coverage. In Hirschhorn, the plaintiffs sought coverage under their homeowner’s policy issued by the defendant, Auto-Owners Insurance Company, for the removal and clean up of bat guano on their vacation home. The bat guano also emitted a “penetrating and offensive” odor. Auto-Owners initially denied the claim on the grounds that bat guano was not “sudden and accidental” nor did it result from “faulty, inadequate, or defective maintenance.”

The pollution exclusion in the Hirschhorn’s policy excluded coverage for “loss resulting directly or indirectly from…discharge, release, escape, seepage, migration or dispersal of pollutants…” Pollutants were defined as “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, liquids, gasses and waste. Waste includes materials to be recycled, reconditioned or recleaned.”

The circuit court initially concluded there was coverage under the policy but upon a motion for reconsideration, reversed its own decision and held that the excrement fell into the category of “waste” in the pollution exclusion and the exclusion barred coverage.

On appeal, the Hirshhorns argued that a reasonable insured would not understand the accumulation of excreted bat guano to constitute pollution. In contrast, Auto-Owners argued that the exclusion was unambiguously clear because bat guano is “waste” and the accumulated waste was both a “contaminant” and “irritant” because it gave off an odor so penetrating and offensive that the house had to be razed. Auto-Owners also argued the waste was discharged or released into the home.

In reversing the circuit court’s decision there was no coverage, the court of appeals stated that “…when a person reading the definition arrives at the term ‘waste,’ poop does not pop into one’s mind.” As such, the court of appeals concluded that a reasonable insured homeowner could view excreted bat guano as not being part of the word “pollutant” and construed the pollution exclusion in favor of coverage.

Accordingly, the court of appeals reversed and remanded the trial court’s decision.

For more information on this case or if you have any questions regarding any insurance coverage issues, please contact an insurance coverage attorney.

Hirschhorn v. Auto-Owners Insurance Company, Appeal 2009 AP 2768

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About this Author

Heidi Vogt, von Briesen Roper Law Firm, Milwaukee, Insurance and Litigation Law Attorney

Heidi Vogt is a Shareholder and Co-Chair of the Litigation and Risk Management Practice Group as well as the Chair of the Insurance Coverage and Risk Management Section. Her practice focuses on insurance coverage litigation, commercial disputes, constitutional law, and complex litigation. She has represented insurance companies in Wisconsin and across the country in both state and federal courts in complex insurance coverage matters for more than 20 years.

She represents and counsels insurance clients on a wide variety of...

Smitha Chintamaneni, Von Briesen Roper Law Firm, Milwaukee, Real Estate, Construction and Tax Law Attorney

Smitha Chintamaneni is a Shareholder and represents businesses in contractual, construction, real estate, eminent domain, taxation, insurance coverage, and probate issues. Smitha also provides insurance analysis on specialty policies such as commercial liability, professional liability, directors and officers and excess to insureds and insurers.

Her experience includes pre-litigation strategy, motion practice, discovery, and trials of eminent domain, real estate and construction, estate, and contractual disputes in state and federal courts and private arbitration forums.

Smitha serves as counsel for numerous corporations and closely-held businesses in both state and federal courts.

Smitha is an Affiliate Member of Owners’ Counsel of America (OCA). She is licensed to practice in Wisconsin and Illinois and has been consistently nominated by her peers as a Wisconsin Rising StarSM in the area of General Litigation since 2009.

Smitha chairs the firm’s Summer Associate Program and Recruiting Committee. She is a member of the Milwaukee Bar Association (Co-chair, Real Property Section), the Chicago Bar Association, and the Illinois Bar Association.