Conspicuous, Plain and Clear Exclusinon of Injury Arising Out of Asbestos Removal is Effective

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After a fire on one of its refineries injured two workers, killing one of them, appellant Motiva Enterprises LLC (Motiva) sought insurance coverage from the companies that insured the contractor that employed the workers. In Motiva Enterprises LLC v. National Fire & Marine Insurance Company, Axis Surplus Insurance Company et al., Maxum Indemnity Company, A159229, A159231, A159233, California Court of Appeals, First District, First Division (January 10, 2022) the Court of Appeal resolved the dispute.

The trial court concluded on summary judgment that because the workers had been abating asbestos, the relevant policies’ asbestos exclusions barred coverage. The Court of Appeal was asked to find coverage for Motiva.

FACTUAL BACKGROUND

Motiva sued the insurers seeking indemnification for the settlement payment from Excel’s insurers. As amended, the complaint alleged causes of action for declaratory relief, breach of contract, and breach of the implied covenant of good faith and fair dealing.

The deadly fire would not have happened but for the asbestos abatement. It is simply not the case that Motiva’s alleged liability is completely divorced from asbestos or asbestos abatement.

 Contrary to Motiva’s contention, this is hardly language that would leave an ordinary insured-much less one of the largest gasoline and diesel fuel refiners in the world-“hopelessly confused by its overlapping provisions and its arcane language.”

ZALMA OPINION

Since there was no dispute that the injured workers were abating asbestos, the Court of Appeal had no need to rely on any strained or absurd definitions of those terms to conclude that the exclusion applies. Insurance policies are contracts. When, as in this case, an exclusions is conspicuous, plain and clear a court has no option but to enforce the exclusion.

© 2022 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.

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