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Appeals court rules on gas station's insurance coverage case

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Determining that an insurance company was obligated to defend and indemnify a Warsaw service station for contamination cleanup, the Indiana Court of Appeals has reversed a Kosciusko Superior Court decision finding otherwise.

The case, Indiana Farm Insurance Company as subrogee of Joseph Koors d/b/a Koors Amoco v. Harleysville Insurance Company, involves an Amoco station in Warsaw owned by Joseph Koors, who in 1998 notified the Indiana Department of Environmental Management of his desire to remove the underground storage tank system at the service station. An environmental site assessment found some contamination, including water contamination, had occurred. Koors later demanded that its insurance carriers during that period, Indiana Farm Bureau Insurance and Harleysville Insurance Company, defend and indemnify relating to IDEM’s actions, environmental testing and remediation. Harleysville in April 2009 notified Koors that it didn’t believe it had a duty to defend and indemnify him on the basis that any loss relating to the IDEM action came before its insurance coverage began in August 1998, that Koors had breached the policy by failing to notify Harleysville as soon as practicable that a loss had occurred, and that the pollution exclusion in the contract barred at least some of the coverage, if not all.

Farm Bureau filed a complaint for contribution from Harleysville in November 2009, and in August 2011 Kosciusko Superior Judge Duane Huffer granted summary judgment for Harleysville and against Farm Bureau.

On appeal, Farm Bureau contends that the “known loss” doctrine – first recognized by the Indiana Court of Appeals in 2000 – does not excuse Harleysville from its obligation to defend and indemnify Koors. The common law concept comes from the fundamental requirement in insurance law that the loss be fortuitous, and the appellate panel in this case found that Harleysville is not entitled to summary judgment on the basis that the known loss doctrine precludes coverage.

The appellate panel determined that the question of unreasonable delay in Koors notifying Harleysville about the loss is one for the jury to address, as is the question about prejudice in regard to the delay.

In analyzing whether gasoline can be considered a “pollutant” under Harleysville’s policies, the appellate panel relied on a decision from the Indiana Supreme Court in Am. States Ins. Co. v. Kiger, 662 N.E.2d 945, 947 (Ind. 1996). The language was similar to the policy language in that case, Judge Cale Bradford wrote, and so the court held that gasoline is not considered a “pollutant” under the Harleysville policy just as it wasn’t in Kiger. Harleysville is not entitled to summary judgment on the basis that the pollution exclusion applies to gasoline leaks.

The case is remanded for further proceedings consistent with this appellate opinion.

 

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  1. I just wanted to point out that Congressman Jim Sensenbrenner, Senator Feinstein, former Senate majority leader Bill Frist, and former attorney general John Ashcroft are responsible for this rubbish. We need to keep a eye on these corrupt, arrogant, and incompetent fools.

  2. Well I guess our politicians have decided to give these idiot federal prosecutors unlimited power. Now if I guy bounces a fifty-dollar check, the U.S. attorney can intentionally wait for twenty-five years or so and have the check swabbed for DNA and file charges. These power hungry federal prosecutors now have unlimited power to mess with people. we can thank Wisconsin's Jim Sensenbrenner and Diane Feinstein, John Achcroft and Bill Frist for this one. Way to go, idiots.

  3. I wonder if the USSR had electronic voting machines that changed the ballot after it was cast? Oh well, at least we have a free media serving as vicious watchdog and exposing all of the rot in the system! (Insert rimshot)

  4. Jose, you are assuming those in power do not wish to be totalitarian. My experience has convinced me otherwise. Constitutionalists are nearly as rare as hens teeth among the powerbrokers "managing" us for The Glorious State. Oh, and your point is dead on, el correcta mundo. Keep the Founders’ (1791 & 1851) vision alive, my friend, even if most all others, and especially the ruling junta, chase only power and money (i.e. mammon)

  5. Hypocrisy in high places, absolute immunity handed out like Halloween treats (it is the stuff of which tyranny is made) and the belief that government agents are above the constitutions and cannot be held responsible for mere citizen is killing, perhaps has killed, The Republic. And yet those same power drunk statists just reel on down the hallway toward bureaucratic fascism.

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