(CN) – After confusion about a fuel delivery flooded a finished basement with hundreds of gallons of oil, general liability insurance is not available, a Maryland appeals court ruled.
The mess occurred on Aug. 24, 2010, when Griffith Energy Services tried to send a truck full of oil to a customer in Alexandria, Va.
Griffith’s driver went to the wrong address and hooked up his truck’s fuel-dispensing hose to a port extending from a house that no longer had a fuel tank because it converted from oil heat.
The driver had pumped oil for just over eight minutes, releasing 330 gallons of fuel into a finished basement, when a tenant of the building ran outside and stopped him.
Realizing that he was at the wrong address, the driver called his dispatcher, who sent a claims specialist to the house, which was the middle of three connected houses.
A Griffith claims specialist soon arrived to take stock of the damage, while firefighters conducted atmospheric monitoring tests of the home, and the other units of the triplex.
The fire marshal ultimately had the damaged home condemned and shut off utilities for all three units.
A tenant of one of the adjoining homes also found oil in his sump.
Griffith had to pay for the residents of all three households to stay in a hotel and then in long-term housing. The company managed to remediate the homes without having them demolished and replaced.
While New Hampshire Insurance Co. ultimately paid Griffith the limit of a $1 million limit under a business automobile liability policy, National Union Fire Insurance Co. of Pittsburgh, Pa., refused coverage under a business comprehensive general liability (GCL) insurance policy.
Griffith sued both companies in April 2012, challenging National Union’s denial and claiming that New Hampshire had incorrectly determined that its coverage had been exhausted.
Within a few months, Griffith reached settlements with the owners of the three homes for a total of $2.6 million.
Meantime, the declaratory-judgment case against the insurers proceeded to discovery in Howard County Circuit Court. The judge granted the insurance companies summary judgment in 2013, and the Maryland Court of Special Appeals affirmed on Aug. 25.
“The CGL Policy was not triggered because exclusion ‘g’ excludes coverage for property damage arising out of the use of an auto, including the ‘loading and unloading’ of an auto,” Judge Deborah Eyler wrote for a three-person panel. “It is undisputed that the ‘unloading’ of the heating oil was not complete at the time the property damage to 1135 commenced.”
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