Home Heating Oil Case Passes the “Product at Issue” Test in Pennsylvania.
We obtained summary judgment in the U.S. District Court for the Eastern District of Pennsylvania where the court found in favor of the insurance carrier on a breach of contract and statutory bad faith claim filed by its insured. The plaintiff returned from vacation to find that his basement oil tank leaked, causing extensive damage to his home and the soil below the foundation. The plaintiff sued the carrier for improperly denying the claim based on the pollutant exclusion. The plaintiff took the position that the denial was improper and in bad faith based upon federal precedent that home heating oil is not a pollutant. These prior decisions changed the way some carriers applied the pollutant exclusion in home heating oil cases in Pennsylvania. We were able to distinguish those cases based on a factual record that established the contamination was not “home heating oil,” but its component parts, benzene, toluene, etc., that caused the damage. We were able to convince the court that the “Product at Issue” test as set forth by the Pennsylvania Supreme Court should control, and the federal cases holding otherwise for heating oil were inconsistent with the Pennsylvania Supreme Court test.