GrafTech Internatl., Ltd. v. Pacific Emps. Ins. Co.
101 N.E.3d 1271
| Ohio Ct. App. | 2017Background
- Eighty-four Alcoa employees alleged injuries from exposure to coal-tar pitch in GrafTech's product.
- GrafTech sought coverage and defense under its Pacific Employers Insurance Co. policies; Pacific denied under a pollution exclusion.
- Pollution exclusion defined pollution as substances making the environment impure, with environment including air, land, structures, water bodies.
- Trial court held pollution exclusion precluded coverage; GrafTech appealed.
- On remand, court concluded exposure to coal-tar pitch was pollution; policy excluded coverage and defense.
- Court declined to decide which state's law governs duty to defend, noting no difference between Ohio and New York on pollution exclusion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the pollution exclusion bar coverage for the coal-tar pitch claims? | GrafTech argues exclusion is ambiguous and should not apply to localized exposures. | Pacific argues exclusion clearly excludes pollution-related injuries in the workplace. | Pollution exclusion applies; no coverage or defense duty. |
| Should choice-of-law affect the duty to defend decision? | GrafTech says multiple states’ law could affect coverage issues. | Pacific contends law choice is dispositive; different laws could apply defense duties. | Not reached; unnecessary to decide after pollution exclusion governs. |
| Are the employee complaints sufficient to trigger the duty to defend under the policy before applying the exclusion? | Allegations involve GrafTech-made products causing exposure and environmental harm. | Claims do not fall outside the exclusion since alleged pollution arises from plant-wide exposure. | Insurer had no duty to defend because exclusion applies to alleged pollution. |
Key Cases Cited
- Andersen v. Highland House Co., 93 Ohio St.3d 547 (2001-Ohio-1607) (pollution exclusion not apply where pollutant not specifically defined; residential setting distinct)
- Sharonville v. Am. Emps. Ins. Co., 109 Ohio St.3d 186 (2006-Ohio-2180) (interpretation of insurance contracts; intent and ordinary meaning)
- Gomolka v. State Auto. Mut. Ins. Co., 70 Ohio St.2d 166 (1982) (policies interpreted to give effect to plain terms and object of contract)
- Burris v. Grange Mut. Cos., 46 Ohio St.3d 84 (1989) (interpretation principles for insurance contracts; favor insured when reasonable)
- Laboy v. Grange Indem. Ins. Co., 2015-Ohio-3308 (Ohio) (policy interpretation and need to ascertain parties’ intent)