Wisconsin Supreme Court Rules that Insurance Policy Does Not Cover Losses Caused by Bat Guano

On Tuesday, March 6, the Wisconsin Supreme Court held (5-2) that an insurance policy’s “pollution exclusion” clause excluded coverage for the loss of the plaintiff’s home that resulted from the accumulation of bat guano, or bat waste.

BatThe plaintiff, a lawyer representing himself in the case, sued Auto-Owners Insurance Company for breach of contract and bad faith. The plaintiff alleged that his vacation home became uninhabitable and therefore was unable to sell the home due to accumulation of bat guano in the house’s siding and walls. As a result, the plaintiff argued that the insurance company was liable for the total loss of the home.

The trial court ruled in favor of the insurance company. The court of appeals reversed the trial court. The Wisconsin Supreme Court reversed the court of appeals and held in favor of the insurance company.

The specific issue was whether the insurance company’s pollution exclusion clause excluded coverage of the loss of the plaintiff’s home due to the bat guano.

The pollution exclusion clause excluded from coverage any “loss resulting directly or indirectly from: … discharge, release, escape, seepage, migration or dispersal of pollutants…” The policy further defined “pollutants” as “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot fumes, acids, alkalis, chemicals, liquids, gases and waste.”

First, the court held that the bat guano fell within the policy of pollutant. Second, the court held that the damage to the plaintiff’s house was in fact caused by the “discharge, release, escape, seepage, migration or dispersal” of the bat guano. Therefore, the court held that bat guano fell within the policy’s “pollution exclusion” absolving the insurance company for the loss of the home.

The case is Hirschhorn v. Auto-Owners Insurance Co., 2012 WI 20. Justice Annette Ziegler authored the opinion and was joined by Justices Patrick Crooks, Patience Roggensack, David Prosser, Jr., and Michael Gableman. Chief Justice Shirley Abrahamson authored a dissenting opinion, and was joined by Justice Ann Bradley.

This post originally appeared on the Wisconsin Civil Justice Council’s blog.

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