It should be noted that the Stillman case simply concluded with a statement by the appellate court that it had no jurisdiction to decide the interlocutory appeal before it.  It was specifically noted in the closing footnote of that decision that the appellate court's refusal to grant the appeal was without prejudice to the insurance company's right to challenge the trial court's ruling with regard to the pollution exclusion, once the matter reached a final judgment.  The appellate court in the Stillman case did not even reach the issue concerning the correctness of the trial court's ruling, regarding applicability of the pollution exclusion. Therefore,  it is incorrect to state that the appellate court rejected the insurer's defense based on the pollution exclusion.  

Another article that discusses the issue concerning insurance coverage for mold is contained in the September 2001 issue of this publication.  On page 38 of that issue, the following statement is made: "It is worth noting, however, that the mere discovery of a pre-existing condition which is causing mold, may not constitute a covered loss."  That article cites, at footnote 5, the case of Great Northern Ins. Co. v. Benjamin Franklin Federal Savings & Loan Assoc. (9th Cir. 1992) 953 F.2d 1387, for that proposition.  Preliminarily, it should be noted that the Great Northern Ins. Co. case involved a discussion of coverage for asbestos and not mold.  Moreover, there is no discussion in the case about the impact of any pre-existing condition.  Finally, the case is not officially published and is not authoritative.

In the same article, there is another case citation, on page 40, that should be clarified.  The article states, with reference to footnote 8: "The courts, adopting this later view have held that claims for nonenvironmental toxic torts, like carbon monoxide and lead exposure, are not covered."  The article cites the case of Lefrak Organization, Inc. v. Chubb Custom Ins. Co. (1996 S.D.N.Y.) 942 F.Supp. 949, for that proposition.  In Lefrak, the court found that the pollution exclusion was ambiguous as to whether it precluded coverage for lead paint poisoning.  Therefore, contrary to the reference in the article, the court found that the insurer's duty to defend was triggered under the policy.

A third citation that needs further clarification, from the same article, is also on page 40.  The article goes on to state:   "This distinction is potentially significant because counsel for the insureds have traditionally argued (and some courts have agreed) that where a toxin is a part of a product which once served a useful or intended purpose, it cannot constitute a pollutant."

The article cites, with reference to footnote 9, the case of  Haman, Inc. v. St. Paul Fire & Marine Ins. Co. (N.D. Ala. 1998) 18 F.Supp.2d 1306, for that proposition.  The Haman case involved a discussion of coverage for damage caused by the chemical methyl parathion.  Contrary to the implication in the article, and even though the product once served a useful or intended purpose, it was indeed found to be an excluded pollutant under the policy.  Id. at 1308-1309.

Notwithstanding this commentary, the present author does not mean to imply that the articles discussed above do not serve a useful purpose in contributing to the understanding of these important developing issues.  Nor is this article intended to be critical of the previous authors whose work in this area has provided a valuable service to the legal and insurance communities.  The fact is that the law in this area remains in a state of flux and the available authority on point is somewhat inconsistent.  The present author has further discussed the issues concerning insurance coverage for mold in some detail in a separate article entitled, "Epidemic of Mold Litigation Plagues Insurance Industry," Insurance Litigation Reporter, Volume 23, No. 9, West Group, pages 261- 268.  That article can also be found at http://www.limandri.com.  In addition to the numerous cases cited in that article, there are a few additional cases that deserve mention here. 

One such case is Leverence v. U. S. Fidelity and Guarantee (1990) 462 N.W.2d 218, 232.  In that case, the Wisconsin Court of Appeals held that the pollution exclusion that appeared in pre-1986 CGL policies did not bar coverage for mold claims.  In Leverence, the pollution exclusion before the court was the less inclusive form that predated the absolute pollution exclusion that appeared in 1986.  That prior version of the pollution exclusion contained an exception for releases of pollutants that were "sudden and accidental."  Wisconsin courts are among the minority of jurisdictions that have interpreted that exception to only require releases that are unintended and unexpected, as opposed to "sudden" or "abrupt."

The trial court in Leverence concluded that the mold formed over time as a result of water vapor trapped in the walls, which caused the growth of microorganisms.  Despite the duration of time involved, the mold growth was still unintended and unexpected.  Therefore, the appellate court agreed with the trial court that the pollution exclusion did not apply.  The Leverence case will probably have little application to most current CGL policies.  That is because the 1986 absolute pollution does not contain the exception for "sudden and accidental" releases.  Moreover, unlike Wisconsin, the majority of states, including California and New York, have applied a temporal requirement to the exception for "sudden and accidental" releases.  Therefore, in most jurisdictions, the gradual release of "pollutants" would generally not fall within the exception.