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Byrd v. Blumenreich

317 N.J. Super. 496, 722 A.2d 598 (App. Div. 1999)

ENVIRONMENTAL LIABILITY; INSURANCE—The standard absolute pollution insurance coverage exclusion does not exclude coverage for claims of lead-based paint ingestion.

An infant allegedly sustained injuries from ingesting, breathing or being exposed to lead chips and dust flaking off the lead-based paint in his parents’ apartment. In the suit against the landlord, a third-party complaint was filed against the landlord’s insurance company seeking a declaratory judgment that the insurer was obligated to defend and indemnify the landlord against the infant’s claim. The lower court dismissed the third-party claim on summary judgment, based upon the standard pollution coverage exclusion in the landlord’s insurance policy. After reviewing similar cases from throughout the country, the Appellate Division reversed and held that the absolute pollution exclusion clause is susceptible to different interpretations as to whether a claim for personal injury caused by the indoor residential ingestion of lead-based paint chips, flakes or dust is excluded from coverage. This ambiguity was fatal to the insurer’s position. In essence, the Court’s review of case law from other jurisdictions led it to believe that the weight of authority in those jurisdictions construes the language “discharge, dispersal, release or escape” of pollutants in a standard pollution exclusion clause either as limited to environmental damage or injury caused by improper disposal or containment of hazardous wastes or as simply ambiguous. To the Court, “discharge, dispersal, release or escape,” as ordinally understood, implies an active or clearly perceived physical event. In its view, such words, especially when used together, are not ordinarily understood to apply to the imperceptible chipping and flaking of paint which are not attributable to an active or physical event but which are an involuntary effect occurring over a considerable period of years.


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