QUANTA BROWNLEE, ET AL.
LIBERTY MUTUAL FIRE INSURANCE CO. ET AL.
Argued: September 12, 2017
States District Court for the District of Maryland Case No.
Civil No. JFM-16-3177.
Barbera, C.J., Greene, Adkins, McDonald, Watts, Hotten,
Court has been asked to answer a certified question of law by
the United States District Court for the District of
Maryland. The Maryland Uniform Certification of Questions of
Law Act, Maryland Code, §§ 12-601, 12-613 of the
Courts and Judicial Proceedings Article ("CJ")
empowers this Court to "answer a question of law
certified to it by a court of the United States…if the
answer may be determinative of an issue in a pending
litigation in the certifying court and there is no
controlling appellate decision, constitutional provision, or
statute of this State." CJ § 12-603.
United States District Court for the District of Maryland has
asked us to answer the following question:
Would application of Georgia's interpretation of the
pollution exclusion contained in the insurance policy issued
by Liberty Mutual Insurance Company to the Salvation Army as
excluding coverage for bodily injuries resulting from the
ingestion of lead-based paint violate Maryland public policy?
answer this question in the negative. For reasons to be
explained, we hold that application of Georgia law concerning
the pollution exclusion in the policy under the principle of
lex loci contractus does not violate Maryland public
AND PROCEDURAL BACKGROUND
Brownlee, Jamal Brownlee, Shakeira Jones,
Daquane Jones, and De'Aunttae Jones
(collectively "Appellants") were exposed to
lead-based paint at a property, owned by the Salvation Army,
located at 1114 North Calvert Street in Baltimore City,
1995, Appellants Quanta Brownlee and Jamal Brownlee resided
at the property, which contained deteriorated lead-based
paint. Appellants sustained permanent brain damage and
elevated blood lead levels as a result of the exposure to
lead-based paint. In 2001, Shakeira Jones, Daquane Jones, and
De'Aunttae Jones also resided at the property. Shakeira
Jones, Daquane Jones, and De'Aunttae Jones also sustained
permanent brain damage and elevated blood lead levels as a
result of the exposure to lead-based paint.
named the Salvation Army as a defendant in their lead-based
paint related tort claims in a complaint that is now pending
in the United States District Court for the District of
Maryland. In addition to alleging that there was no
insurance available in connection with Appellants' claim,
the Salvation Army asserted that it was immune from liability
on charitable immunity grounds, unless and until Liberty
Mutual indemnified it as responsible for Appellants'
injuries and damages. The parties do not dispute that Liberty
Mutual issued comprehensive general liability insurance
policies ("the Liberty Mutual insurance policies")
to the Salvation Army, or that these policies were purchased
in Georgia, and were effective from October 1, 1993 until
October 1, 2001.
the policies do not include lead-based paint exclusion
provisions, but the policies do include pollution exclusion
provisions. The pollution exclusion provision is written as
This insurance does not apply to: (f) Pollution
(1) "Bodily injury" or "property damage"
arising out of the actual, alleged or threatened discharge,
dispersal, seepage, migration, release or escape of
(a) At or from any premises, site or location which is or was
at any time owned or occupied by, or rented or loaned to any
Complaint, Exhibit 4 at 82. "Pollutants" are
defined in each of the Liberty Mutual insurance policies as
"any solid, liquid, gaseous or thermal irritant or
contaminant, including smoke, vapor, soot, fumes, acids,
alkalis, chemical or waste." Id. at 83.
seek affirmation from this Court that Liberty Mutual is
obligated to indemnify the Salvation Army and defend against
claims brought by the Appellants. Appellee Liberty Mutual
asserts that it is under no obligation to indemnify and
defend Appellee Salvation Army because: (1) the Liberty
Mutual insurance policies were formed in Georgia, thus
implicating the legal principle of lex loci contractus
i.e., the law governing the contracts is the law of the
place where the contract is formed, and (2) pursuant to
Georgia law, the pollution exclusion provision in the
insurance policies excluded coverage for bodily injuries
resulting from exposure to lead-based paint.
Supreme Court of Georgia has held that bodily injuries
allegedly resulting from the ingestion of lead-based paint
are within the pollution exclusion. See Georgia Farm
Bureau of Mut. Ins. Co. v. Smith, 298 Ga. 716, 784
S.E.2d 422 (2016). The language of the pollution exclusion
clause in Georgia Farm is identical to the language
of the pollution exclusion clause in the Liberty Mutual
Mutual has moved to dismiss the complaint on the ground that
Maryland courts follow the doctrine of lex loci
contractus in choosing the applicable law,
Cunningham v. Feinberg, 441 Md. 310, 326, 107 A.3d
1194, 1204 (2015); Allstate Ins. Co. v Hart, 327 Md.
526, 529, 611 A.2d 100, 101 (1992) and that, under Georgia
law, the insurance policy does not cover claims for
lead-based paint poisoning. To the contrary, Appellants
contended in the federal district court that Maryland courts
would not apply Georgia's interpretation of the pollution
exclusion clause because it violates Maryland's public
policy. The United States District Court for the District of
Maryland asks us resolve which law applies, so that the
federal court may decide the merits on Liberty Mutual's
Motion to Dismiss. This Court must answer whether application
of Georgia's decision in Georgia Farm violate
Maryland's public policy.
Lex Loci Contractus
not in dispute that the doctrine of lex loci
contractus is applicable here. Both parties agree that
lex loci contractus is the proper lens through which
this Court should analyze their claims. Maryland has long
recognized the doctrine of lex loci contractus.
See De Sobry v. De Laistre, 2 H. & J. 191, 191
(1807) (applying the laws of the country where the terms of
the contract were created). When this Court applies lex
loci contractus, typically either the validity or
enforceability of a contract is at issue.
Cunningham, 411 Md. at 327-28, 107 A.3d at 1205. The
"doctrine requires that, when determining the
construction, validity, enforceability, or interpretation of
a contract, we apply the law of the jurisdiction where the
contract was made." Id. at 326, 107 A.3d at
1204. Therefore, the substantive application of the law to
the contract between the parties is subject to the
enforcement of the jurisdiction where the contract was
rule of lex loci contractus, however, has a narrow
exception. Maryland law still governs when a contractual
provision is contrary to a strong Maryland public policy.
"Nevertheless, for Maryland public policy to override
the lex loci contractus rule, the public policy must
be very strong and not merely a situation in which Maryland
law is different from the law of another jurisdiction."
Hart, 327 Md. at 530, 611 A.2d at 102. See Lab.
Corp. of Am. v. Hood, 395 Md. 608, 620, 911 A.2d 841,
848 (2006) (opining that the lex loci contractus
principle is "not inflexible" and that it will not
govern a contract provision that is against Maryland public
policy) (internal citations omitted); Cunningham,
441 Md. at 337, 107 A.3d at 1211 (explaining that this Court
has "long recognized an exception to the application of
lex loci contractus: we refuse to apply the doctrine
when doing so would be 'contrary to a strong public
policy of this State[ ]'") (quoting Am.
Motorists Ins. Co. v. ARTRA Grp., Inc., 338 Md. 560,
573, 659 A.2d 1295, 1301 (1995)); Bethlehem Steel Corp.
v. G.C. Zarnas & Co., 304 Md. 183, 188-89, 498 A.2d
605, 608 (1985) (recognizing the choice of law rule which has
been consistently recognized by this Court, "lex
loci contractus does not apply to a contract provision
which is against Maryland public policy[ ]"). Thus,
absent a determination that Georgia's law violates a
strong Maryland public policy, Georgia's law applies.
Authority on Pollution Exclusion Clauses
Appellants and Appellees agree that, under Georgia case law,
the Liberty Mutual insurance policies in question do not
cover claims for lead-based paint poisoning. Because the
Liberty Mutual insurance policies were issued in Georgia, and
the lex loci contractus doctrine is applicable,
Georgia's law must be examined first. The Supreme Court
of Georgia examined a pollution exclusion provision using
identical language as the insurance contract currently before
this Court. Georgia Farm, 298 Ga. at 717, 784 S.E.2d
at 423. See Id. (defining a "pollutant" as
"any solid, liquid, gaseous or thermal irritant or
contaminant, including smoke, vapor, soot, fumes, acids,
alkalis, chemicals and waste[ ]").
Georgia Farm, the plaintiff, a residential tenant,
sued her landlord for injuries sustained when plaintiff's
daughter allegedly ingested lead from deteriorating
lead-based paint in the rented house. Id. The
landlord insured the residence through a general commercial
liability insurance policy issued by Georgia Farm Bureau
Mutual Insurance Company ("Georgia Farm").
Following an insurance claim initiated by the landlord,
Georgia Farm filed a declaratory judgment action against
Plaintiff and the landlord. Georgia Farm argued that the
daughter's lead-based poisoning injuries were not covered
by the policy because of a pollution exclusion provision,
thus discharging Georgia Farm's obligation to defend or
indemnify the landlord in the lawsuit. The Supreme Court of
Georgia held that lead present in paint "unambiguously
qualifies as a pollutant and that the plain language of the
policy's pollution exclusion clause" removed
plaintiff's claims against her landlord from coverage.
Id. at 721, 784 S.E.2d at 426. The Georgia
Farm Court discussed this Court's analysis in
Sullins v. Allstate Ins. Co. when reversing the
Court of Appeals of Georgia's determination that Georgia
Farm had a duty to defend the landlord.  Sullins v.
Allstate Ins. Co, 340 Md. 503, 667 A.2d 617 (1995);
Georgia Farm, 298 Ga. St 716, S.E.2d at 422 (2016);
Smith v. Georgia Farm Bureau Mut. Ins. Co., 331
Ga.App. 780, 786, 771 S.E.2d 452, 457 (2015), cert.
granted (July 6, 2015), rev'd, 298 Ga. 716,
784 S.E.2d 422 (2016), and vacated, 337 Ga.App. 300,
789 S.E.2d 193 (2016).
Sullins, we reviewed an insurance policy's
pollution exclusion clause. 340 Md. at 509, 667 A.2d at 620.
The insurance policy language at issue in Sullins
differed from the language in Appellants' insurance
policies. In Sullins, the Allstate Insurance Company
("Allstate") issued a Deluxe Homeowners Policy to
Reverend D. Paul Sullins and Patricia H. Sullins.
Id. at 506-07, 667 A.2d at 618. In Sullins'
policy, under the heading "Losses We Do Not Cover,
" the policy contained the following language:
We do not cover bodily injury or property damage which
results in any manner from the discharge, dispersal, release,
or escape of:
a) vapors, fumes, acids, toxic chemicals, toxic liquids or
b) waste materials or other irritants, contaminants or
Id. We determined that "contaminants" and
"pollutants" are susceptible to two different
interpretations by a lay person. Id. at 509, 667
A.2d at 620. One interpretation of the two terms could
reasonably encompass lead-based paint, while another could
refer to environmental contaminants or pollutants.
Id. However, we noted that "[to] be sure that
lead paint poisoning claims were excluded from coverage, [the
insurer] could have included a provision…explicitly
excluding such claims." Id. at 518 n.3, 667
A.2d at 624 n.3. The Sullins Court ruled that the
policy language was ambiguous and did not remove the
insurer's duty to defend the lead-based paint poisoning
action. Id. at 518, 667 A.2d at 624.
intermediate appellate court, the Georgia Court of Appeals,
cited Sullins for the proposition that if an insurer
"had intended to exclude injuries caused by lead-based
paint from coverage in the policy at issue in this case it
was required, as the insurer that drafted the policy, to
specifically exclude lead-based paint injuries from
coverage." Smith, 331 Ga.App. at 785, 771
S.E.2d at 456 (footnote omitted) (internal citations
omitted). Georgia's intermediate appellate court went on
to explain that, as in Sullins, "an insured
could reasonably have understood the provision at issue to
exclude coverage for injury caused by certain forms of
industrial pollution, but not coverage for injury allegedly
caused by the presence of leaded materials in a private
residence." Id. However, the Supreme Court of
Georgia disagreed that the insurance policy terms at issue
here created the same ambiguities. Georgia Farm, 298
Ga. at 716, 784 S.E.2d at 423. Like in Sullins, the
Georgia Farm court considered that if "a policy
provision is susceptible to more than one meaning, even if
each meaning is logical and reasonable, the provision is
ambiguous and….will be construed strictly against the
insurer/drafter and in favor of the insured."
Georgia Farm, 298 Ga. at 719, 784 S.E.2d at 424-25
(internal citations omitted). The Georgia Farm court
determined that the pollution exclusion clause was
unambiguous and held that the "policy contains an
absolute pollution exclusion clause which precludes recovery
for bodily injury or property damage resulting from exposure
to any pollutant." Id. at 719, 784 S.E.2d at
decision in Sullins, and Georgia's application
of the pollution exclusion clause in Georgia Farm
can coexist. The law of our State and Georgia's law are
not so contrary because the insurance policy terms at issue
here, and the terms at issue in Sullins, are
different. Sullins required us to interpret the
pollution exclusion clause because the terms were undefined
and ambiguous, and thus susceptible to multiple
interpretations. That is not the case here. The Liberty
Mutual insurance policies define 'Pollutants' as
"any solid, liquid, gaseous or thermal irritant or
contaminant, including smoke, vapor, soot, fumes, acids,
alkalis, chemical or waste." See supra
Complaint, Exhibit 4 at 83. The Sullins Court took
issue with ascertaining the intention of the parties because
the parties did not define the pollution exclusion's
terms as they have here. Sullins, 340 Md. 503 at
514, 667 A.2d at 622. The Sullins Court was then
forced to analyze the historical context and the parties'
intentions to determine the contract's meaning.
Id. However, lex loci contractus does not
require us to interpret the terms of the Liberty Mutual
insurance policies, or determine the intent of the parties,
because Georgia's Court already has determined that is
not a relevant line of analysis here. Georgia Farm,
298 Ga. at 720, 784 S.E.2d at 425.
Sullins Court was required to perform a full review
of pollution exclusion clause history to ascertain the
parties' intentions. Similarly to the Supreme Court of
Georgia, we noted that insurance exclusion clauses in their
infancy generally applied to accidental contamination.
Sullins, 340 Md. at 513-15, 667 A.2d at 622-23;
Georgia Farm, 298 Ga. at 719, 784 S.E.2d at 425.
Both Sullins and Georgia Farm acknowledged
that in the mid-1980s, the insurance industry adopted the
"absolute pollution exclusion, " which denied
coverage for bodily injury arising from pollutants.
Sullins, 340 Md. at 514-15, 667 A.2d at 622; Georgia
Farm, 298 Ga. at 719, 784 S.E.2d at 425. At this point, the
discussion in Georgia Farm and Sullins
diverges. Sullins decided that the insurance
industry's absolute pollution exclusion, which denied
coverage for "bodily injury or property damage arising
out of the actual, alleged or threatened discharge, release,
or escape of pollutants" and defined
"pollutant" as "any solid, liquid, gaseous or
thermal irritant or contaminant including smoke, vapor, soot,
fumes, acids, alkalies, chemicals and waste[, ]" were
environmental terms of art, and thus the parties intended
environmental hazards, and not lead-based paint, to be
excluded. Sullins, 340 Md. at 515, 667 A.2d at 622.
Farm relied on its past decision in Reed v.
Auto-Owners Ins. Co., 284 Ga. 286 667 S.E.2d 90 (2008),
for the proposition that the Court should not "adopt an
approach which considered the purpose and historical
evolution of pollution exclusions before looking to the plain
language of the clause itself." Georgia Farm,
298 Ga. at 720, 784 S.E.2d at 425. In Reed, the
plaintiff claimed that she was poisoned by the release of
carbon monoxide inside her rental home. Reed, 284
Ga. at 288, 667 S.E.2d at 92. The insurance policy's
definition of "pollutant" in Reed is the
same definition provided for in Georgia Farm, and
the same definition included in the Liberty Mutual insurance
policies at issue here. The Supreme Court of Georgia read
that the plain language of the "pollutant"
definition was "matter, in any state, acting as an
'irritant or contaminant[.]'" Georgia
Farm, 298 Ga. at 720, 784 S.E.2d at 425 (quoting
Reed, 284 Ga. at 288, 667 S.E.2d at 92).
Specifically, the Court noted that focusing on extrinsic
sources of interpretation is what leads to the ambiguity in
the pollution exclusion clause where none exists. Georgia
Farm, 298 Ga. at 721, 784 S.E.2d at 426.
Courts similarly first apply the terms of the insurance
contract itself. Litz v. State Farm Fire & Cas.
Co., 346 Md. 217, 224, 695 A.2d 566, 569 (1997) (quoting
Bausch & Lomb v. Utica Mutual, 330 Md. 758, 779,
625 A.2d 1021, 1031 (1993). Then, "[w]e construe
insurance policies as a whole to determine the parties'
intentions." Litz, 346 Md. at 224, 695 A.2d at
569 (internal citations omitted). The Georgia Farm
court decided not to interpret the insurance contract's
terms, and rather decided Georgia Farm on the
narrower grounds of applying the contract's plain
language. Georgia Farm, 298 Ga. at 720, 784 S.E.2d
at 425. The Sullins Court was not afforded that
luxury, because the term "pollutant" was not
defined in the parties' contract. Had the term been
defined, the Sullins Court may not have examined the
historical context and come to a different conclusion, but
that is not an issue for this Court to currently decide.
case law of Maryland and Georgia on pollution exclusion
clauses is not so contrary to overcome lex loci
contractus. Sullins required us to interpret
the contract's language. We are not charged with such a
task here. Rather, we are asked to answer the question of
whether Maryland's current public policy is so contrary
to Georgia's decision in Georgia Farm, which,
even in light of our discussion in Sullins, is no.
We have consistently held "that the lex loci
contractus principle is not inflexible" and thus,
Georgia Farm's holding will apply to
Appellants' claims, unless the exception applies, because
such a result would violate Maryland's public policy.
Hood, 395 Md. at 620, 911 A.2d at 848. Because
Georgia Farm did not interpret the terms that we
determined had environmental implications, the two cases are
not so at odds to override Georgia's law. To interpret
Sullins to mean that Maryland's public policy
strongly requires lead-based paint exclusions to be
explicitly and unambiguously identified, sufficient to
overcome lex loci contractus, would be inapposite to
the express direction from the legislature and the precedent
of this Court. See Maryland Code, § 19-704(c)
of the Insurance Article (permitting insurers to include lead
hazard coverage exclusions in insurance policies);
Sullins, 340 Md. at 518, 667 A.2d at 624 (opining
that "conflicting interpretations of the policy language
in judicial opinions is not determinative[ ]"). For the
lex loci contractus doctrine to be set aside,
Maryland's public policy "must be very strong and
not merely a situation in which Maryland law is different
from the law of another jurisdiction."
Cunningham, 441 Md. at 337-38, 107 A.3d at 1211. For
reasons to be explained, Maryland's public policy is not
contrary to Georgia Farm, thus Georgia's law
Maryland's Public Policy
contend that Georgia's interpretation of the pollution
exclusion provision should not apply because it would violate
Maryland's public policy concerning the protection of
victims of childhood lead-based paint poisoning. This Court
has long recognized that declaration of the State's
public policy is the function of the legislative branch of
the government. Felder v. Butler, 292 Md. 174, 183,
438 A.2d 494, 499 (1981); see Mayor & City Council of
Baltimore v. Clark, 404 Md. 13, 36, 944 A.2d 1122, 1135
(2008) (commenting "[i]t is, after all, the General
Assembly that sets the public policy of the
State…."); Rausch v. Allstate Ins. Co.,
388 Md. 690, 715, n. 13, 882 A.2d 801, 816, n. 13 (2005)
(explaining the General Assembly that "sets the public
policy of the State, especially economic and social policy[
]"); Frey v. Frey, 298 Md. 552, 562, 471 A.2d
705, 710 (1984) (internal citations omitted) (opining that
the "declaration of public policy is normally the
function of the legislature, " and to evaluate the
public policy we look to statutory provisions); Harrison
v. Montgomery County Bd. of Educ., 295 Md. 442, 460, 456
A.2d 894, 903 (1983) (recognizing that the declaration of the
public policy of Maryland is normally the function of the
of a strong public policy, sufficient to warrant an exception
to application of another jurisdiction's law under
lex loci contractus, is usually evidenced by
explicit legislative action. Bethlehem Steel Corp. v.
G.C. Zarnas & Co., 304 Md. 183, 190, 498 A.2d 605,
608 (1985). Even though evidence of Maryland's public
policy may be found through explicit legislative
determinations, "explicit legislative language [is] not
required always in order to reach a conclusion that a
Maryland Code provision represents strong public policy. On
occasion, we have given some weight to evolving public
policy." Cunningham, 441 Md. at 340, 107 A.3d
at 1213. We now turn to examine Maryland's lead-based
paint and pollution exclusion initiatives to determine
whether either of these are currently evolving areas of
public policy that would merit abandonment of the lex
loci contractus choice of law doctrine in this instance.
Maryland's Public Policy Approach to Lead-Based Paint
this Court, nor this State, is blind to the deleterious and
devastating effects of childhood lead-based paint poisoning.
Appellants thoroughly discuss the historical, legislative,
judicial, and scientific-related initiatives concerning the
safety and protection of victims of lead-based paint
poisoning. Appellants assert Maryland's response to the
public health issue is evidence of "strong and
steadfast" public policy. However, Appellants
misunderstand that a response to a public health issue does
not affirmatively answer the very narrow question posed
before us: whether Georgia's application of pollution
exclusion clauses clearly violates Maryland's public
Maryland has developed a series of legislative policies aimed
at protecting Maryland's children against the severe and
permanent effects of lead-based paint poisoning by
eradicating lead-based paint in homes. These legislative
policies are indicative of a statewide commitment to
eliminating lead-based paint from homes. These policies are
not evolving toward requiring insurers to cover lead-based
paint related claims. Appellants' contentions that
Maryland's steadfast and continued efforts to pass laws
geared towards removing lead-based paint from homes, do not
necessarily translate into a demonstration of a strong state
public policy of barring a pollution exclusion provision
sufficient to override Georgia's law.
has taken a strong approach in protecting children from
poisoning by lead-based paint containing
substances through legislation aimed at
abatement of lead-based paint. Childhood lead-based
paint poisoning has been a public issue of national concern
for the last fifty years. See Richard Rabin,
Warnings Unheeded: A History of Child Lead
Poisoning, 79 Am. J. Pub. Health, 1668, 1668 (Dec.
1989). Beginning in the mid-1920s, childhood lead-based paint
poisoning gained broader recognition as a common childhood
disease, originally believed to be a condition solely
stemming from lead-painted surfaces in the home. Id.
However, later research uncovered that major sources of
lead-based paint were also in "toys, furniture, porch
railings, and window sills…" of many residences.
Id. at 1669. Children, who typically exhibit
hand-to-mouth activity, can ingest either lead-based paint
chips that have flaked, or lead dust that becomes present due
to normal wear and tear, home repair, or renovation. Jane E.
Schukoske, Lead Paint and the Warranty of Habitability in
Pre-1950 Rental Housing: Maryland's Lead Poisoning
Prevention Program Creates A Presumption of the Presence of
Lead Paint, 4 U. Balt. J. Envtl. L. 22, 29 (1994).
Consumption of lead-based paint flakes or dust, even in small
amounts, may result in poisoning. Id. Permanent
injuries caused by lead-based paint poisoning include
cognitive impairments, learning disabilities, and
developmental delays. Md. Gen. Assemb. Rep. of the Lead Paint
Poison. Comm'n. at 2 (May 5, 1994). Often, these
permanent injuries that manifest during childhood
subsequently impact a person's ability to function as an
ways, Maryland's approach to abating lead-based paint
began in Baltimore City, which has been particularly
devastated by lead-based paint poisoning. Commencing in 1935,
Baltimore City embarked on a series of steps to aid in the
diagnoses and prevention of childhood lead-based paint
poisoning. See George W. Schucker, et. al.,
Prevention of Lead Paint Poisoning Among Baltimore
Children, 80 Pub. Health Rep. 969, 969 (Nov. 1965). At
the first signs of large-scale lead-based paint poisoning in
children, Baltimore began offering free access to physicians
and hospitals for determination of blood lead levels in
children. Id. By 1949, Baltimore City assigned a
public health nurse to investigate lead-based paint reports.
Id. Baltimore initiated laboratory studies, through
which patients' homes were visited and ...