Insurer Dodges $180K Corpse Cleanup Costs

(CN) - An insurer is not liable for the $180,000 it cost a landlord to clean up the remains of a corpse found collapsed over a tenant's toilet, with fluids seeping into the apartment below, a federal judge ruled.

When landlord William Creagh entered the second-floor apartment of one of his tenants, Arthur Doud, in August 2011, he allegedly noticed an "ungodly" odor.

Creagh found Doud's decomposing corpse collapsed over his toilet. Doud had been dead for as long as two weeks, and his bodily fluids had seeped into the floor and contaminated the first floor bathroom directly below. Biological material was also found in his kitchen and bedroom.

Police allegedly told Creagh to clean up the unit as soon as possible, so he hired Aftermath Inc. to sanitize the building and Evans Services to rebuild areas that were removed or damaged in the cleanup.

Creagh later claimed that he needed medical treatment and could not sleep after his "extreme exposure" to the smell of the dead body, which he kept "re-living" and "really spooked" him.

Days after the landlord submitted a claim to Lloyd's of London for the nearly $180,000 cleanup, insurance adjuster Robert Thompson allegedly told him to submit the final bill for the remediation. Creagh claims Thompson said he would take care of it, implying coverage would not be an issue.

But certain underwriters at Lloyd's sued Creagh; 22nd Street LLC; Gary Creagh, Jr.; and Gary Creagh, Sr. in Federal Court, seeking declaratory judgment that the policy's "microorganism exclusion" bars claims "arising out of or relating to: mold, mildew, fungus, spores or other microorganism of any type, nature, or description."

Creagh countered that the insurer acted in bad faith and committed unfair trade practices under state law.

Senior U.S. District Judge Jan DuBois in Philadelphia granted the insurer's motion for summary judgment, finding the microorganism exclusion applied because bacteria were present in Doud's body fluids.

The judge relied on Lloyd's expert, board-certified forensic pathologist Walter Hoffman's statement that natural bowel bacteria "are the cause of postmortem decomposition and resultant bloody [sic] fluid purging, i.e., body fluids escaping from the body from natural openings."

DuBois wrote: "The uncontroverted expert evidence, corroborated by Creagh's testimony regarding odor consistent with bacterial formation, establishes that bacteria were present in the bodily fluids of Arthur Doud, and the court so finds. There is no genuine dispute of material fact on this aspect of the case."

DuBois also tossed Creagh's counterclaims based on Thompson's alleged implication that the loss would be covered.

"Viewing the facts in the light most favorable to Creagh, even if Thompson told him in some fashion that his claim would be covered, Creagh's promissory estoppel argument fails because he cannot show that he took action in reliance on such a representation," DuBois wrote.

The court awarded Lloyd's summary judgment on all counts.

"Plaintiff's reliance on the microorganism exclusion to deny insurance coverage was not in bad faith, and there is no genuine dispute of material fact on this question," DuBois concluded.

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