Brownlee v. Liberty Mutual Fire Insurance Co.
175 A.3d 697
| Md. | 2017Background
- Maryland courts were asked to answer whether Georgia’s interpretation of a pollution exclusion in Liberty Mutual’s policy to the Salvation Army would violate Maryland public policy.
- The Liberty Mutual policies were issued in Georgia and include a pollution exclusion with a defined term 'Pollutants'; lead-based paint exposure occurred at the Salvation Army property in Baltimore.
- Georgia Farm Bureau Mut. Ins. Co. v. Smith held lead-based paint injuries can fall within a pollution exclusion under Georgia law, influencing this case via lex loci contractus.
- Maryland applies lex loci contractus but preserves a public policy exception if the contract provision is contrary to a strong Maryland public policy; here, the question is whether public policy overrides Georgia law as to pollution exclusions.
- Maryland’s public policy regarding lead-based paint is historically protective of victims and abatement efforts, but Maryland has enacted statutes allowing lead hazard exclusions under prescribed conditions.
- The majority held Georgia Farm governs under lex loci contractus, concluding Georgia’s interpretation does not offend Maryland public policy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Maryland public policy bar applying Georgia Farm? | Brownlee argues public policy prohibits lead-based paint exclusions under pollution clauses. | Liberty Mutual asserts lex loci contractus governs and Georgia Farm applies. | No; Georgia Farm governs under lex loci contractus. |
| Is the pollution exclusion ambiguous enough to require Maryland interpretation? | Sullins shows ambiguity in pollutants/contaminants could exclude lead-based paint. | Georgia Farm treats lead-based paint as a pollutant with a clear exclusion. | Not dispositive; policy terms here are defined and Georgia Farm applies. |
| Does Maryland’s public policy on lead-based paint override Georgia Farm under lex loci contractus? | Maryland’s strong public policy against lead harm should override. | Public policy does not overcome Georgia Farm where statutes permit exclusions. | No; public policy not strong enough to override Georgia Farm. |
Key Cases Cited
- Cunningham v. Feinberg, 441 Md. 310 (Md. 2015) (lex loci contractus; public policy exception when strong)
- Hart, 327 Md. 526 (Md. 1992) (lex loci contractus not inflexible)
- Sullins v. Allstate Ins. Co., 340 Md. 503 (Md. 1995) (pollutants ambiguous; lead paint not necessarily excluded)
- Georgia Farm Bureau Mut. Ins. Co. v. Smith, 298 Ga. 716 (Ga. 2016) (lead-based paint unambiguously qualifies as pollutant; broad exclusion)
- Reed v. Auto-Owners Ins. Co., 284 Ga. 286 (Ga. 2008) (pollutant definition applied to carbon monoxide; plain language focus)
- Bethlehem Steel Corp. v. G.C. Zarnas & Co., 304 Md. 183 (Md. 1985) (lex loci contractus exception when public policy strong)
- Litz v. State Farm Fire & Cas. Co., 846 Md. 217 (Md. 1997) (interpret insurance policies as a whole; determine intent)
- Sullins v. Allstate Ins. Co. (reiteration by Md. Court in context), 340 Md. 503 (Md. 1995) (ambiguity requires construction against insurer)
- Clendenin v. U.S. Fire Ins. Co., 390 Md. 449 (Md. 2006) (pollution exclusion ambiguity; not controlling in this context)