A cooling tower must be considered equipment, not a structure, a federal appeals court ruled Wednesday, concluding that there is insurance coverage in a negligence case filed by a worker who developed Legionnaires’ disease after working on a cooling tower.
Cooling towers are designed to remove heat from facilities by spraying water down through them.
Wednesday’s ruling by the 11th U.S. Circuit Court of Appeals in Atlanta i Southern-Owners Insurance Co. v. Waterhouse Corp., Nursery Supplies Inc., Darrell Patterson, in a case dealing with how a cooling tower should be classified, a lower court decision upheld.
In July 2019, Mr. Patterson, a plumber and electrician, in and around a cooling tower on property owned by Kissimmee, Fla.-based Nursery Supplies Inc., which had hired Deltona, Fla.-based Waterhouse to perform monitoring, maintenance and water treatment services for the tower.
About two weeks later, he was admitted to a hospital and diagnosed with Legionnaires̵7; disease, with water samples from the tower confirming the presence of legionella bacteria. Mr Patterson sued Nursey Supplies and Waterhouse for negligence.
Waterhouse was insured under commercial general liability and umbrella policies issued by Lansing, Michigan-based Southern-Owners that included exclusions for fungi or bacteria found in a building or structure.
The insurer agreed to defend Waterhouse under a reservation of rights, but argued that the mushroom exclusions applied because the cooling tower was a structure. Nursery Supplies and Mr. Patterson argued that the cooling tower was not a “structure” under the exemptions.
The U.S. District Court in Orlando ruled that the insurer had a duty to defend and potentially indemnify Waterhouse, and that was upheld by a three-judge court panel.
A cooling tower “is more properly regarded as machinery,” the ruling said. “While a cooling tower may indeed qualify as a ‘structure’ under a broad definition of the term, Florida law clearly instructs that ambiguous provisions in insurance must be construed strictly against the originator,” it said.
“Here, given the ambiguity” in the language of the exemptions, “we must construe provisions strictly against southern Owners and liberally in favor of coverage.”
Attorneys in the case did not respond to requests for comment.