Court rules gasoline spill at Glocester Country Club was not covered by insurance

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GLOCESTER – The insurance policy for a town-based golf course does not cover contamination from a gasoline spill on the property discovered by the Rhode Island Department of Environmental Management in 2018, according to a decision issued in the U.S. District Court for the District of Rhode Island.

The opinion was covered in a story this week published on JDSUPRA.

Glocester Country Club at 156 Putnam Pike was the plaintiff in a suit against Scottsdale Insurance Company over release of gasoline from an aboveground storage tank associated with a country club’s pesticide or herbicide operations. Scottsdale held a general liability insurance policy for GCC with a pollution exclusion.

The nine-hole golf club reportedly uses more than 30 pieces of gas-powered equipment, including nine used in connection with pesticide and herbicide applications.

According to the suit, “at an unknown time and due to an unknown cause, gasoline from the tank began to leak resulting in a dispersal of gasoline that contaminated the soil and groundwater on GCC’s property and that of its neighbor.”

RIDEM investigated and found GCC responsible to remediate the contamination.

GCC sought to recover losses via a claim on its commercial general liability insurance policy, which included a “Pesticide or Herbicide Applicator Limited Pollution Coverage Endorsement.”

Scottsdale moved for summary judgment arguing that the policy’s “pollution exclusion” barred GCC from recovering damages, and that GCC did not show that the leak was caused by an act or omission of the grounds superintendent, who was the actual holder of the coverage. The defendant also argued that GCC could not sustain its burden of showing that the gasoline leak was “an accident,” and therefore a covered under the plan.

Judge Patricia Sullivan granted the motion, ruling that the insurance policy’s Pollution Exclusion barred GCC from recovering damages, and that the Pesticide Endorsement did not override that exclusion. Sullivan’s decision notes that the endorsement would only apply to losses that occurred while the grounds superintendent’s pest control services operations were being performed. 

The leak was determined to have not occurred as a direct result of GCC’s pesticide operations and therefore, the policy did not cover the damages that occurred.

The complete opinion can be found here.

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