THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, August 10, 1995 TAG: 9508100456
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY MARC DAVIS, STAFF WRITER
DATELINE: NORFOLK LENGTH: Medium: 68 lines
Four tenants killed last year by carbon monoxide poisoning in their rented home are not covered by the landlords' $1 million insurance policy because of an exemption for ``pollution hazards,'' the insurance company claims.
A lawyer for the insurance company argued in court Wednesday that carbon monoxide is a ``pollutant,'' and exhaust from the home's gas heater, which killed the four, is a ``pollution hazard,'' even if the gas never left the house.
The lawyer made his arguments in a one-hour Circuit Court hearing to determine if the insurance company must defend the landlords and possibly pay their damages.
Four people - a woman, her fiance, their 5-year-old son and her 15-year-old daughter - were killed Dec. 12 inside a rental home at 208 W. 30th St. in Park Place.
Investigators say soot and bricks from the chimney clogged the gas heater's exhaust vent, preventing deadly carbon monoxide from escaping. No one was charged criminally.
Soon after the accident, relatives of the four victims sued the landlords, Suzanne and Dale Marshall of Virginia Beach, the city of Norfolk and Virginia Natural Gas for $20 million.
An attorney for the Selective Insurance Co. of New Jersey said the landlords' commercial policy exempts claims arising from the release of toxic substances into ``the atmosphere.'' He argued that air inside the house is part of ``the atmosphere.''
``It's the air wherever you are, whether you're indoors or outdoors,'' said the lawyer, John M. Claytor of Richmond.
But lawyers representing the landlords and the victims' families said Selective Insurance is trying to hide behind an ambiguous policy that does not clearly define what a ``pollution hazard'' is. In Virginia, they argued, an ambiguous policy must be construed in favor of the insured.
``Selective is seeking to avoid its clear obligation under this policy,'' said Michael F. Imprevento, a Norfolk lawyer who represents the victims' families.
The landlords' lawyer, Lawrence H. Woodward Jr., argued that the exemption for ``pollution hazards'' is aimed at large-scale outdoor pollution, like the kind that comes from factory smokestacks, not household appliances.
This is a case without legal precedent in Virginia - what lawyers call ``a case of first impression.'' The Virginia Supreme Court has never ruled on the ``pollution hazard'' issue.
``I realize we're asking the court to make the hard choice,'' Claytor, the insurance company lawyer, told Judge Marc Jacobson. ``We're asking the court to take the unsympathetic position.''
Insurance coverage is often a crucial but unspoken issue in civil lawsuits. In many cases, if the defendant does not have insurance, the plaintiff cannot collect damages, even if a jury gives him a big verdict.
In this case, two defendants - the gas company and the city - can pay a big verdict. But if the landlords alone are liable, then the ability to collect is more doubtful.
``The damages in this case are catastrophic,'' a lawyer for the victims' families, Stanley E. Sacks, said after the hearing. ``For that reason, it's our duty to seek those damages from any proper sources that we can find.''
Jacobson promised to rule on the insurance issue soon. So far, there is no trial date for the case.
KEYWORDS: LAWSUIT FATALITY CARBON MONOXIDE by CNB