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Vol. 11 - Issue 2
February 28, 2022


Encore: Randy Spencer’s Open Mic

When Insurance Coverage Stinks






This “Open Mic” column originally appeared in the April 1, 2014 issue of Coverage Opinions


Last week a California federal court held that no coverage was owed to Mixt Greens, a restaurant located in San Francisco, for damages that it allegedly caused to a neighboring restaurant, Murphy’s Deli. Murphy’s beef -- the offensive odor of Mixt Greens’s cooking oil was passing through the ventilation system and into Murphy’s. Travelers Prop. & Cas. Co. v. Mixt Greens, Inc., No. 13-957 (N.D. Cal. Mar. 25, 2014).

[Talk about the pot calling the kettle black. While I love the smell of a deli, not everyone compares the combined odor of corned beef and herring to the aroma of the fragrance counter at Nordstrom. In one of my all-time favorite coverage cases, in 2010, a federal court in New York made a judicial pronouncement about deli smells. The court held in Greengrass v. Lumbermans Mut. Cas. Co. that the pollution exclusion did not apply to odors emanating from the “King of Sturgeon’s” delicatessen. In support of its decision the court noted that, according to Zagat’s restaurant guide, “[t]he smells alone are worth the price of admission.” The Second Circuit affirmed.]

Back to Mixt Greens, where the court held that the odors emitted from the ducts into Murphy’s Deli should not be deemed a “loss of use of tangible property.” “Here, the Underlying Action does not involve any potential liability for damages on account of ‘property damage’ as that term is defined in the Mixt Greens policy. The only damages Cal–Murphy seeks from Mixt Greens in the Underlying Action are for economic losses. The fact that Cal–Murphy does not seek to recover the cost of repairing or replacing any tangible property, and that no part of its restaurant was ever closed because of the odors—not even for an hour—compels the conclusion that Cal–Murphy’s losses, which are purely economic, are not covered under the policy and Travelers is not obligated to defend Mixt Greens or Hines/NOP in the Underlying Action.” Mixt Greens got tossed.

Seeing the Mixt Greens decision immediately made me think of the granddaddy of all odor coverage cases: the 11th Circuit’s 2011 decision in Maxine Furs, Inc. v. Auto-Owners Insurance Company.

In Maxine Furs, the court held that the aroma of Indian food was a pollutant within the terms of a pollution exclusion.  Despite its best effort to curry favor with the court, the policyholder was shown the tandoori.  It is a decision that the policyholder will no doubt describe as papa-dumb.  Of course, the insurer knew all along that the policyholder was going to vindallose.  Let’s tikka look at why.

Maxine Furs is a fur shop located next door to an Indian restaurant.  Because the two establishments shared air-conditioning ducts, Maxine’s furs soon began to smell like curry. Maxine had the affected furs cleaned and then made a claim with Auto-Owners Insurance Company.  Auto-Owners denied coverage based on the absolute pollution exclusion clause in Maxine’s policy.  Maxine sued. The district court concluded that coverage was excluded.

The parties disagreed whether curry aroma was a pollutant.  The court looked to the policy’s definition of pollutant, in conjunction with the applicable standard for interpreting a policy, and concluded that it did “not think that a person of ordinary intelligence could reasonably conclude that curry aroma is not a contaminant under these circumstances.”

The court explained: “A contaminant is something that “soil[s], stain[s], corrupt[s], or infect[s] by contact or association.”  Webster’s Third New International Dictionary 491 (1986).  Indeed, what happened here is that the curry aroma soiled Maxine’s furs. Otherwise, they would not have needed cleaning.  We do not think that a reasonable person could conclude otherwise.  Accordingly, we conclude that curry aroma is a pollutant under the policy.” Lastly, the court concluded that the “wafting” of the curry aroma satisfied the “migrating, seeping, or escaping” requirement of the pollution exclusion.

Mumbai for now. See you next issue.


That’s my time. I’m Randy Spencer. Contact Randy Spencer at

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