This case involves the proper scope and application of the “reasonable expectations doctrine.” Composting facilities create offensive odors in the ordinary course of business by composting mainly “green materials.” A reasonable policyholder under these circumstances would not consider the odors produced by its operations to be an environmental pollution. Therefore, the pollution exclusion in State Farm’s policies does not exclude the Cold Creek policyholders’ liability in the Underlying Action.
Court California Court of Appeal
Case Number A114623
- Duty to Defend
- Pollution Exclusion and Coverages