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Coverage defined in hotel hot tub illness

Hotel pool and hot tub

When a hotel found itself in hot water after a customer claimed he was infected with Legionnaires’ disease by water in the hotel’s pool and hot tub, the hotel’s insurance providers asked the Western District of Virginia to determine whether coverage applied.

The primary insurer leaned on the policy’s bacteria exclusion, but U.S. District Judge Elizabeth K. Dillon was unpersuaded.

“Put simply, the parties ask the court to determine whether the water in the hot tub and pool at the [hotel] is a ‘good or product intended for bodily consumption’ under the … Policy,” she wrote. “Because the phrase is susceptible to more than one reasonable interpretation in this context, it is ambiguous and must be construed against the insurer. As a result, the exception to the exclusion applies here, and the exclusion thus does not bar coverage.”

The decision is The Brethren Mutual Insurance Company, et al. v. Jai Dev Inc., et al. (VLW 023-3-057).

The judge granted summary judgment to the excess insurer and dismissed the injured party’s counterclaim as duplicative.

The policies

In early March 2019, David Wise contracted Legionnaires’ disease during his stay at the Best Western Radford Inn. He sued the hotel’s owner, Jai Dev, claiming he inhaled Legionella bacteria from contaminated water in the hotel’s indoor hot tub and pool.

Legionnaires’ disease is a severe type of pneumonia caused by inhalation of Legionella bacteria, often found in warm water that isn’t adequately cleaned and disinfected. Wise said he may have unintentionally swallowed hot tub or pool water, and he didn’t blame his infection on any beverage sold by the hotel.

The Brethren Mutual Insurance Company and Great American Alliance Insurance Company filed suit for declarations that Wise’s injury wasn’t a covered loss under either of Jai Dev’s insurance policies.

Brethren provided Jai Dev with primary liability coverage and relied on an exclusion for injuries caused by inhalation of “fungi or bacteria.” That exclusion wouldn’t apply if the fungi or bacteria were found in “a good or product intended for bodily consumption.”

Alternatively, Brethren said the policy excluded injuries caused by “pollutants,” defined as “any solid liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.”

Great American covered the hotel’s excess liability but excluded “organic pathogens” like Legionella bacteria. An exception applied to cover injuries “caused by any ‘organic pathogen’ in or on any food or beverages sold, distributed, served or handled by any insured.”

Wise countersued that both policies provided coverage. The insurers each moved for summary judgment.

‘Bodily consumption’

The parties agreed that Legionella was a bacteria under the Brethren policy. Whether the bacteria exclusion applied to Wise’s injury, however, depends on if the bodily consumption exception to the exclusion applies, Dillon noted.

A “good or product intended for bodily consumption” wasn’t defined in Brethren’s policy, but the insurer argued that “consumption” in this context referred to “[t]he action or fact of eating or drinking something or of using something up in an activity.”

Brethren also pointed out that this exception to the bacteria exclusion pertains specifically to “bodily consumption.” Two other portions of the relevant policy refer only to “consumption.”

“According to Brethren, this indicates that the phrase ‘bodily consumption’ must be read more narrowly than the unmodified word ‘consumption,’ and thus that the bodily consumption exception only refers to goods or products intended for eating or drinking,” Dillon wrote.

The judge agreed that “‘bodily’ has a reasonable, non-superfluous meaning” in this circumstance.

“Under Brethren’s reading, the policy would provide coverage whenever a person is injured due to their eating or drinking of one of the insured’s contaminated goods or products that was intended for eating or drinking, yet still would exclude coverage when the person ingests a substance that was not so intended,” she explained.

Wise, however, said a federal decision from Georgia unambiguously mandated coverage here.

In Nationwide Mutual Fire Insurance Co. v. Dillard House, the Northern District of Georgia interpreted an almost identical policy exception and found that hot tub water “could reasonably be defined as a ‘good or product intended for bodily consumption’ under the policy.”

While several district courts have relied on Dillard House when interpreting bodily consumption exceptions to reach the same or similar conclusion, Dillon rebuffed Wise’s argument.

“A contractual provision or term is not ambiguous ‘simply because courts have reached different conclusions as to its definition,’” she wrote. “It follows, then, that a provision or term is not unambiguous simply because other courts have reached similar conclusions as to its definition.”

Still, Dillon said the interpretation of “good or product intended for bodily consumption” Wise pitched was reasonable at a threshold level.

“The court is hard pressed to conclude that reasonable people could not read the consumption exception in the same way the Dillard House court did, even if that is not how this court would interpret it,” she said. “That alone requires a finding that the exception is ambiguous and must be construed in favor of the insured.”

And ambiguity would remain even if the court adopted Brethren’s proposed definition of “consumption.”

“Reasonable people might agree that water in a pool or hot tub is not generally intended for eating or drinking yet still disagree on whether a person’s body is ‘using [] up’ that water while bathing in it,” Dillon wrote. “As one district court in the Fourth Circuit has noted, ‘while water in either a swimming pool or whirlpool tub may not be noticeably “used up” every time a person makes use of one of these amenities, the Hotel surely puts water in them for its guests’ consumption.’”

Thus, while the bacteria exclusion in Brethren’s policy applies to inhalation of Legionella bacteria, Dillon said the bodily consumption exception to that exclusion applies under Virginia law.

Wise then claimed Great American owed coverage because the water in the hot tub and pool was a beverage that was distributed or handled by the hotel. As such, the policy’s organic pathogens exclusion didn’t apply.

Dillon disagreed.

“Though water in a hot tub or pool is clearly a liquid, it would strain credulity to suggest that hot tub or pool water is ordinarily understood to be suitable or safe for drinking,” she wrote.