Michael Sillyman, a partner, and London Burns, an associate in Kutak Rock’s Scottsdale office, successfully defended Transwestern Commercial Services Arizona, LLC/Zurich and Star Roofing against Starr Surplus before the Arizona Court of Appeals in Starr Surplus Lines Insurance Company v. Star Roofing, Inc. et al.

The initial insurance coverage action arose from an underlying lawsuit brought against Star Roofing and Transwestern by an individual in 2012 who alleged injuries as a result of being overcome by breathing fumes released from Star Roofing’s work on a commercial building in Tempe, AZ.  

Before engaging in the roofing project, Star Roofing obtained a commercial general liability insurance policy issued by Starr Surplus and named Transwestern, the property manager of the commercial building, an additional insured. After the alleged injuries were reported, Starr Surplus agreed to defend Transwestern under an alleged reservation of rights, but Transwestern denied that Starr Surplus ever notified it of representation under a reservation of rights. Transwestern obtained new counsel and was sued, along with Star Roofing, by Starr Surplus for a declaratory judgment that the pollution exclusion language of the Starr Surplus policy excluded coverage for claims alleged in the underlying lawsuit. 

Transwestern moved for summary judgment on the grounds of estoppel, waiver and laches arguing that the delay caused by Starr Surplus’ late reservation of rights precluded Starr Surplus from denying coverage under its policy.  Meanwhile, Star Roofing moved for summary judgment claiming that under Arizona law the materials used by Star Roofing did not constitute “pollutants” under the Policy and therefore coverage could not be denied under its pollution exclusion provision.  

Starr Surplus appealed rulings by the trial court which granted both Transwestern and Star Roofing’s motions for summary judgment.  The Arizona Court of Appeals held that pollution exclusions were intended to cover traditional environmental pollution claims and not the bodily injuries allegedly suffered as a result of Star Roofing’s alleged negligence in the installation of a commercial building’s roof. 

Kutak Rock associate London Burns wrote the motion for summary judgment and the appellate briefs. Kutak Rock partner Michael Sillyman argued the appeal.