Nav-Its, Inc. v. Selective Insurance Company of America

Nav-Its, Inc. (plaintiff) was a construction company that provided remodeling for commercial tenants in existing buildings. Nav-Its hired a subcontractor to perform painting and floor sealing at a shopping center over a nine-day period. Fumes from the painting and sealing work caused another tenant in the shopping center to become ill and seek medical treatment. The injured tenant filed a personal-injury complaint against Nav-Its, which was resolved through binding arbitration. Nav-Its held a comprehensive general-liability policy with Selective Insurance Company of America (Selective) (defendant), which excluded coverage for damages arising from a pollution hazard. Pollution hazard was defined broadly in the policy to include exposure to any harmful effects arising from the discharge, dispersal, seepage, migration, release, or escape of any solid, liquid, or gaseous irritant or contaminant. The policy contained a narrow exception to the pollution-exclusion clause for exposures to discharges occurring within a single 48-hour period. Nav-Its filed an insurance claim for the personal-injury damages, and Selective denied the claim, citing the pollution exclusion. Nav-Its brought an action in state district court, seeking a declaratory judgment that the policy covered the claim. The trial court ruled in favor of Nav-Its, finding that the pollution-exclusion clause applied only to traditional pollution claims. Selective appealed. The appellate court reversed the trial court, favoring Selective’s broader reading of the pollution-exclusion clause.