By Tiffany Delery Davis
In Noble Energy, Inc. v. Bituminous Cas. Co., No. 07-20354, 2008 WL 2232085 (5th Cir. 2008), the Fifth Circuit affirmed summary judgment in favor of the defendant, Bituminous Casualty Company, in an insurance coverage dispute concerning whether Bituminous had a duty to defend and indemnify plaintiff, Noble Energy, Inc., in connection with an underlying suit. The underlying suit involved claims arising out of an explosion and fire at a disposal facility.
Flammable gas, condensed from hazardous oilfield waste being unloaded from trucks at the disposal facility, caused a truck’s diesel engine to race and then explode, killing two workers, and injuring several others. Noble sued Bituminous, claiming that Bituminous had a duty to indemnify and defend Noble in the underlying lawsuit, because Noble was an additional insured under the Bituminous policy.
The Bituminous policy contained a pollution exclusion which excluded coverage for “bodily injury or property damage arising out of the actual, alleged or threatened discharge, dispersal, release or escape of pollutants.” The Fifth Circuit found the policy’s pollution exclusion to be unambiguous, and that the combustible vapor that emanated from the waste met the policy’s definition of “pollutant.” The Court reasoned that any alleged liability for the workers’ deaths and bodily injuries arose out of the discharge, dispersal, release, or escape of the hazardous waste and its vapors. Thus, the Court held that coverage for the claims against Noble in the underlying lawsuit was excluded under the terms of the policy, and Bituminous was not obligated either to defend or indemnify Noble.
The Court did not address whether Noble was an additional insured under the Bituminous policy, explaining that the pollution exclusion would bar coverage of the underlying plaintiffs’ claims even if Noble were held to be an additional insured.