Opinion ID: 4540320
Heading Depth: 3
Heading Rank: 3

Heading: Instant Action

Text: MJH asked Westchester to defend it against the underlying lawsuit. Westchester refused, explaining in its insurance appraiser’s letter that the Total Pollution Exclusion precluded coverage because the plaintiffs alleged that “pollutants” caused their injuries. MJH sued Westchester, seeking damages for Westchester’s refusal to defend under the Policy and alleging that Westchester had (1) breached the Policy by refusing to defend MJH in the underlying lawsuit and (2) acted in bad faith.2 MJH also alleged that its employee did not use “pollutants,” as defined in the Policy, because the pest control pesticides contained only Essentria, which consists of “40% 1 The Policy defined “pollutants” as including “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.” App., Vol. I at 254. 2 MJH also sued Chubb North American Claims (“CNAC”) in its original complaint but not in its amended complaint. MJH requested CNAC’s dismissal in the joint status report, Dist. Ct. Doc. 20 at 2, and the district court dismissed CNAC, App., Vol. II at 15 n.1. MJH has not appealed CNAC’s dismissal. 3 mineral oil, 37% wintergreen oil, 10% rosemary oil and 13% other ingredients.” Id. at 185. Westchester moved to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. It again argued that because MJH used pesticides that were “pollutants,” the Total Pollution Exclusion applied. Id. at 195 (“[T]here was and is no coverage, no breach of the policy and no basis for a claim for bad faith.”). The district court granted the motion. First, it held that MJH failed to state a breach of contract claim because the petition in the underlying lawsuit showed that the Total Pollution Exclusion applied and Westchester thus had no duty to defend. Second, the court held that because Oklahoma law required “an insured [to] show that he is entitled to coverage to prevail on a bad-faith claim,” MJH had “failed to state a bad-faith claim.” App., Vol. II at 19 (quotations omitted). MJH timely appealed.