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Blogs | December 7, 2015
2 minute read

MOA granted to discuss insurance policy’s ambiguous pollution exclusion

The Michigan Supreme Court granted mini-oral argument in Hobson v. Indian Harbor Insurance, No. 151447, to address whether the Total Pollution Exclusion Endorsement in Indian Harbor Insurance Company’s commercial general liability policy is ambiguous and whether a discharge of a pollutant caused the injury that the plaintiffs-residents sustained during an apartment fire.

Wilson Investment Service and Construction, Inc. owned and operated the apartment building where Charlie and Mary Hobson resided.  The Hobsons alleged that one of Wilson’s employees and managers negligently set a fire, which caused the Hobsons injuries and damages.  The Hobsons attempted to recover for their injuries under Wilson’s commercial general liability insurance policy with Indian Harbor Insurance.  The insurance company denied the claim and the Hobsons filed a complaint against the insurance company and Wilson.  The Hobsons alleged that the policy covered Wilson’s negligence and the negligence of its employees, and therefore, the insurance company wrongfully denied coverage for their injuries.  Defendants filed a motion for summary disposition, arguing that because the injuries suffered by the Hobsons included smoke inhalation, the pollution exclusion provision applied.  The circuit court denied the defendants’ motion and the Court of Appeals denied the defendants’ application for leave to appeal.  The Michigan Supreme Court remanded the case to the Court of Appeals and the Court of Appeals affirmed the circuit court’s decision. 

The Michigan Supreme Court granted mini-oral argument to address the pollution exclusion and determine whether to grant the application for leave to appeal or take other action.