Russo & Kieck

By: Donna Russo, Esq.

Earlier this year, the N.J. Appellate Division ruled that there is coverage under a CGL policy for bodily injury caused by lead paint poisoning even though the CGL policy had an absolute pollution exclusion endorsement. The Court rationalized that the language of the absolute pollution exclusion is ambiguous absent specific language excluding injury or damage caused by the indoor residential exposure to lead paint. Byrd ex. rel. Byrd v. Blumenreich, 317 N.J. Super. 496 (A.D. 1999).
Perhaps to remedy this situation, a specific lead paint exclusion endorsement is now available. The N.J. Dept. of Banking and Insurance has approved for use commencing on January 1, 1999 a policy form which excludes coverage for bodily injury caused in whole or in part, either directly or indirectly, by lead paint or lead contamination, or arising out of or incidental to the inhalation, ingestion, use, handling, or contact with lead paint or lead contamination. This exclusion applies only if the covered premises were constructed prior to 1978. The insured must be allowed to secure liability coverage for lead paint or lead contamination if the premises has been certified as being free of existing lead hazards pursuant to standards to be established by the Department of Community Affairs. On renewals, the insurer must provide the insureds with written notice, at least one year prior, that the coverage is being changed to exclude bodily injury from lead paint.

What happens to all the potential claims over the next 20 or so years to be made on behalf of minors for injuries from exposure to lead paint? On June 30, 1999 the N.J. Appellate Division decided the case of Jorge Ruiz, an infant, et al. v. H. Robert Kaprelain et al., A-5703-96T5,___N.J. Super.___(A. D. 1999), which affords some relief to landlords who did not know and should not have known about lead paint peeling, chipping etc. in a tenant's apartment.

In Ruiz, the landlord purchased the apartment in 1984. It had passed all city and state inspections. Before the plaintiffs' tenancy, the landlord had repainted the entire apartment with a fresh coat of latex paint even though there was no peeling, chipping or flaking paint at the time. Prior to receiving notice from the Department of Health, the landlord had received no complaints from the plaintiffs about peeling, chipping or flaking paint. Upon notice from the Department of Health, the landlord immediately removed the paint. The plaintiffs admitted that they never complained to the landlord about the presence of peeling, chipping or flaking paint in the apartment.

Plaintiffs argued that the landlord should be absolutely liable under two theories - breach of implied warranty of habitability and nuisance. The Appellate Division rejected plaintiffs' arguments and held that the absolute liability standard is not appropriate and that the landlord's conduct should be based on the standard of negligence - did the landlord know or in the exercise of reasonable care, should he have known of the presence of lead paint in the apartment prior to receiving notice of the condition from the Department of Health. The jury had found that the landlord was not negligent, the trial court denied plaintiffs' motion for a new trial and entered a judgment of no cause of action and the Appellate Division affirmed.

The concurring opinion suggests the probable future arguments to be made in the arena of lead paint litigation. "... [C]onsidering all we know and all that has been written about the danger of lead paint to small children, it may well be time to move beyond traditional concepts of negligence . . .perhaps we should tell the landlord it is his or her obligation to know. If fulfilling that obligation requires diligent and regular inspections, then that is what the landlord must be prepared to do."