An Illinois federal district court recently granted an insurer’s motion for judgment on the pleadings in a declaratory judgment suit regarding coverage for claims related to bacteria. AMCO Ins. Co. v. Swagat Group, LLC, et al., No. 07-3330 (C.D.Ill. Feb. 10, 2009).
A hotel’s general liability and umbrella insurer brought a declaratory judgment action and then moved for judgment on the pleadings against the owners and operators of a hotel, as well as the underlying claimants suing the hotel. The claimants had asserted a claim alleging hotel guests had contracted Legionnaire’s disease as a result of exposure to Legionella bacteria infecting the hotel’s pool and hot tub. The insurer based its declaratory judgment suit and its motion for judgment on the pleadings on policy provisions in each policy excluding from coverage liability resulting from contact with bacteria.
The court granted the insurer’s motion as to certain defendants and denied it as to others. The court explained that if the exclusions regarding bacteria-related liability were set forth in the hotel’s insurance policies, the policies clearly exclude coverage for the underlying lawsuits because all of the claims in the underlying lawsuits allege that guests of the hotel suffered injuries after coming in contact with bacteria on the hotel premises and the quoted bacteria exclusions encompass such liability. However, judgment was granted only as to those insureds who failed to deny in their answer allegations in the insurer’s complaint alleging that the copy of the policy with the exclusion was attached, and thus were deemed to have admitted that the bacteria exclusion was present. However, with regard to those defendants that alleged in their answer that they lacked sufficient knowledge to say if the attached policies were true and correct, a material allegation of fact remained in dispute between those parties and the insurer was not entitled to judgment on the pleadings against those defendants.