09262017Headline:

Orlando, Florida

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Ed Normand
Ed Normand
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Insurance Policy Provides Coverage for Legionnaires Disease

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The Federal 11th Circuit Court of Appeals recently ruled that a comprehensive general liability policy covering a hotel must provide insurance coverage for the death of a tourist visiting Orlando from England who died after contracting Legionnaires disease sourced from the hotel hot tub. The family was visiting Orlando from England. They chose what was reported to be a Choice Hotel on International Drive in Orlando as part of a package tour. Unknown to them that same hotel had been the site of a reported outbreak of Legionnaires disease about 6 months earlier.

The decedent, like many U.K. tourists was a smoker and over 65 making him susceptible to contracting Legionnaires disease from exposure to Legionella bacteria. He and his wife spent time on the pool deck sitting next to the pool spa. On his return to the U.K. he became very sick and died from Legionnaires disease. After very good work by the CDC and the European cohort to the CDC the disease was traced back to the hotel. The spa water was then immediately tested and found positive for Legionella bacteria. Thankfully Orange County Florida Health Department workers also inspected the spa and found it woefully non-compliant with health laws regarding spa maintenance. That negligent maintenance was the alleged cause of the Legionella bacteria and resulting death. Legionnaires disease is tough to pinpoint exactly but it was pretty clear that this spa was the cause of the exposure in this case where the hotel had shocking health code violations related to the spa only months after the spa was linked to a Legionnaires outbreak by investigating officials with the State and County.

The Hotel and the franchisor Choice were sued. Choice claimed that they were not liable for many reasons among them that they had no contract with the current management at the hotel. Allegations in the suit were for the wrongful death of the family's father as a result of Legionnaires disease. Choice denied liability and defenses included that the Hotel was in breach of the franchise agreement and that Choice was not negligent or otherwise at fault. Westport insured the owner of the Hotel but denied coverage for Legionella bacteria and denied coverage to Choice. In the underlying suit there was a confidential High Low settlement with Westport Insurance Company and the Family with the outcome to be decided if there was coverage for Legionella bacteria as determined by a coverage Declaratory Action Westport filed in the Federal District Court for the Middle District of Florida. Per the agreement either side could appeal to the 11th Circuit on coverage so the appeals court could decide the issue. Choice also was a Defendant in the declaratory action as they were claiming coverage as an additional insured under the Westport policy. District Judge John Antoon II issued an excellent order and well written opinion denying Westport summary judgment and granting summary judgment as to indemnity coverage to the Plaintiff stating that there was insurance covering the incident and the Court granted judgment as to Choice that Westport had a duty to defend Choice under the policy.

The court ruled in a very common sense fashion that insurance policies cannot deny coverage for illness due to bacteria by claiming that bacteria is pollution.

Westport appealed and lost. The Appeals Court ruled for the Plaintiff and upheld Judge Antoon’s ruling that there was insurance coverage. The main holding in the ruling was that pollution is not bacteria especially naturally occurring bacteria like Legionella. The opinion also held that the bacteria exclusion did not apply due to exceptions to the exclusion. It was common sense. Clearly a naturally occurring bacteria is not pollution and insurance policies must be read in light of the normal construction of words. Also the policy had a bacteria exclusion but that was intended to cover mold and mildew cases not cases resulting from negligent maintenance of a hot tub or pool.

The allegations of the suit were that the bacteria was caused by negligent maintenance of the spa tub. Because there was insurance coverage for the death, Choice, an additional insured, certainly should have won on the duty to defend. The opinion from the 11th Circuit originally never mentioned Choice and its indemnity claim. A decision this week from the Federal Court of Appeals from the 11th Circuit clarifies that Choice was entitled to defense costs from Westport. The ruling is mainly because Westport owed coverage to the hotel franchisee and so Choice, an additional insured under the franchise agreement, was also entitled to defense costs.

In summary a general liability policy does provide coverage for the wrongful death of guests at a hotel based on allegations that they acquired Legionnaires disease that was sustained from exposure to Legionella bacteria in the hotel spa. This is really a common sense ruling and a warning. Hotel guests can and should check the hotel's public inspection reports, even for an ostensible chain type hotel, to make sure that they are following the health code. Also just because the hotel has a sign that says it is a brand name it may not be a valid use of the brand or the franchise contract may be expired or void. For hotel owners they need to be careful to clean the hot tub and make sure that they get confirmation in advance that the insurance they have will cover pool and spa related claims.