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Primrose Operating Co. v. National Am. Ins. Co.

ELR Citation: 34 ELR 20081
Nos. No. 03-10861, (5th Cir., 08/23/2004)

The Fifth Circuit upheld a district court decision holding that an insurer had a duty to defend an oil company in an underlying suit in which the company was alleged to have polluted a nearby ranch. The insurance contract contained a pollution exclusion clause that would, by itself, bar coverage. The company, however, purchased a pollution endorsement to the contract that eliminates the exclusion. And because all the conditions required for the endorsement to take effect were present, the insurer had a duty to defend the oil company. In addition, damages awarded to the company for hiring a law firm to defend it in the underlying case were not erroneous, and the district court properly admitted expert testimony. However, the district court erred by incorrectly calculating prejudgment interest.