Dude Products – I love that name – sold an alternative to toilet paper called “Dude Wipes.”  Some users sued Dude, alleging that the Dude Wipes did not break apart or disperse in a reasonable time after flushing, resulting in clogs or other sewer damage.

At issue in an eventual declaratory judgment action was coverage under Dude’s commercial general liability policy.   
 
The insurer argued that an underlying complaint did not allege “property damage,” as the clogging did not cause physical injury to tangible property.  The court in Harleysville Preferred Ins. Co. v. Dude Prods., No. 21 C 5249 (N.D. Ill. Dec. 21, 2022) disagreed, concluding that allegations of “other sewage damage” was enough to qualify as physical injury to tangible property.

With that issue down the drain, the court turned to the “occurrence” question, concluding that the definition had been satisfied: “Here, the underlying complaint does not describe a direct causal connection between Dude Product’s allegedly intentional misrepresentation and the actual property damage. The allegation is that Dude Wipes are falsely advertised as flushable and that to the contrary, flushing the product results in clogging and sewer damage. There are no allegations indicating that Dude Products intended this sort of damage by its advertisement or that such damage was a clearly foreseeable result.”

After that observation regarding intent, the court, as you would expect, had no problem concluding that the expected or intended exclusion did not apply.  In addition, the court easily dispensed – which didn’t surprise me – with the potential applicability of the impaired property exclusion.     

Incidentally, being the curious George-type that I am, I checked out the Dude Wipes website:  https://dudeproducts.com/.  It’s entertaining.  Trust me.  Further googling revealed that Dude Wipes was a Shark Tank company, with Mark Cuban putting in $300K for a 25% share of the company.  Shark Tank’s update website reports that the company’s lifetime revenue is over $120 million, with sales of up to $1.4 million per week.