STATter 911

Do you recall the dramatic mayday in Houston on April, 2007 involving Capt. Eric Abbt? That same fire is currently in the news. Read the story from the AP:

An insurance company is arguing in court that a policy it issued that excludes payments for pollution prevents the families of three people killed in a 2007 Houston office building fire from being compensated because the deaths were caused by smoke inhalation and not the actual flames.

Great American Insurance Co. has asked U.S. District Judge Lee Rosenthal in Houston to rule that the deaths caused by the smoke, fumes and soot will not be covered by the policy because there is a specific exclusion for pollution and it mentions smoke, fumes and soot.

A court hearing in the case is set for February.

"This is shocking. It's an extraordinary effort by an insurance company to avoid paying on a contract for insurance," Randy Sorrels, an attorney for several families in wrongful death lawsuits from the fire, said in Wednesday's Houston Chronicle.

Great American spokeswoman Diane Weidner said the company does not comment on pending litigation.

Smoke from the blaze killed 52-year-old Jeanette Hargrove of Friendswood, and Houston residents 46-year-old Marvin Wells Sr. and 38-year-old Shana Ellis.

In October, Misty Ann Weaver, a nurse, pleaded guilty to three counts of felony murder and one count of first-degree arson. She was sentenced to 25 years in prison.

Weaver admitted she set the fire to hide that she had not completed some paperwork on time for her boss, a cosmetic surgeon, and feared she might lose her job.

Great American's potential liability in the case is $25 million.

Don Jackson, the Houston lawyer for building owners Boxer Property Management Corp., said the insurance company that has the primary $1 million policy on the building hasn't made this argument.

"We think it is wrong. It's inappropriate for the insurance company to try to run and hide now," Jackson said.

Seth Chandler, a University of Houston Law Center professor who teaches insurance law, said the insurance company's move will test the limits of the law.

"This is pushing the boundaries of the absolute pollution exclusion," Chandler said. "We're going to have a battle between the literal language of the policy and the way people speak of pollution."

# posted by Dave Statter @ 2:35 AM