Mass. SC determines heating oil a pollutant while interpreting policy

John O'Brien Jul. 19, 2007, 1:40pm


BOSTON - According to the Massachusetts Supreme Court, the spill of home heating oil falls within a pollution exception of a heating and air conditioning company's liability insurance policy, and Allamerica Insurance Co. will not have to defend one of its customers.

Thomas McGregor received the news July 10 that he will be all alone in a suit filed against his company, McGregor Heating and Air Conditioning. A family is suing him for the cost of cleanup and rent during the cleanup after McGregor allegedly installed a furnace that began to leak home heating oil.

McGregor was looking for a little support from Allamerica, but the company will have no obligation to offer any.

"Costs associated with spilled oil are no less excluded by pollution exclusions merely because the insured regularly works with oil as part of his ordinary business activities," Justice Roderick Ireland wrote.

"That the pollution exclusion limits the value of the policy is no reason to depart from the plain meaning of that exclusion."

The policy read that, "This insurance does not apply to... bodily injury or property damage arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants," or "Any loss, cost, or expense arising out of any... request, demand, order or statutory or regulatory requirement that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of, pollutants...."

"Pollutant" was defined in the policy as "any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste."

He didn't believe home heating oil fell under the scope of that definition, but the Supreme Court disagreed. Ireland even wrote that he is very confident in the interpretation because the Department of Environmental Protection ordered the cleanup when it learned of it.

"Consideration of the statute under which the department ordered the Staeckers to clean up the oil lends strength to our interpretation of the spilled oil as a pollutant," he wrote.

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