Cold Creek Compost, Inc. v. State Farm Fire & Casualty Co.

Plaintiffs Cold Creek Compost, Inc., et al. (hereafter, collectively, Cold Creek) appeal from the judgment entered in favor of defendant State Farm Fire and Casualty Company (State Farm) after State Farm’s motion for summary judgment was granted in an insurance coverage dispute. The primary issue presented is whether the pollution exclusion in the policies bars coverage for liability for offensive and injurious odors emanating from a compost facility and spreading over a mile away. We conclude that the exclusion applies and affirm the judgment for State Farm.

I. BACKGROUND

Cold Creek operates a facility in Mendocino County that composts organic materials including animal waste (manure), grape pomace, and yard trimmings. Cold Creek was insured by State Farm during the relevant period under a business policy and a commercial liability umbrella policy.

In 1995, people living within two miles of the facility, acting individually and as members of an association called “Preserve Country Neighborhoods” (PCN) filed a petition for writ of mandate and complaint for injunctive relief (Preserve I) to require the County of Mendocino to void the use permit it issued allowing Cold…