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Appellate court affirms judgment in coverage dispute

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Indiana Evidence Rule 407 may bar evidence of subsequent insurance policy revisions offered to resolve ambiguity in an executed insurance contract, the Indiana Court of Appeals held today.

In a suit involving whether State Automobile Mutual Insurance Co. had a duty to defend and indemnify Flexdar Inc. following discovery of contamination on Flexdar’s property, Flexdar argued it should have been allowed to introduce a new policy endorsement form that State Auto drafted in 2004 – two years after Flexdar’s policy coverage ended – that specifically identified trichloroethylene and other substances as examples of “pollutants” under the insurer’s pollution exclusion. The policy Flexdar held didn’t specifically name any pollutants; TCE was found to have leaked from Flexdar’s premises and contaminated subsoil and groundwater. The trial court didn’t allow the 2004 policy into evidence.

The appellate court noted that Evidence Rule 407 is typically associated with personal injury and other negligence cases, but that it’s worded broadly and courts have applied it in other contexts, including intentional tort and contract claims. The 7th Circuit Court of Appeals has read the federal counterpart to Evidence Rule 407, which is substantially similar to the Indiana rule, to exclude evidence of subsequent policy revisions in insurance coverage.

Citing Pastor v. State Farm. Mut. Auto. Ins. Co., 487, F.3d 1042, 1045 (7th Cir. 2007), the judges ruled in State Automobile Mutual Insurance Co. v. Flexdar, Inc. and RTS Realty, No. 49A02-1002-PL-111, that Evidence Rule 407 can bar evidence of subsequent policy revisions offered to resolve ambiguity in an insurance contract. As such, any modifications State Auto made to its policy forms in 2004 constitute subsequent remedial clarifications that aren’t admissible to interpret Flexdar’s insurance contract and prove the insurer’s liability, wrote Judge Nancy Vaidik. The trial court didn’t err by striking it from the designated evidence.

The trial court also didn’t err in finding State Auto’s pollution exclusion ambiguous and unenforceable. It relied on American States Insurance Co. v.  Kiger, 662 N.E.2d 945 (Ind. 1996), Seymour Manufacturing Co. Inc. v. Commercial Union Insurance Co., 665 N.E.2d 891 (Ind. 1996), Travelers Indemnity Co. v. Summit Corp. of America, N.E.2d 926 (Ind. Ct. App. 1999), and Freidline v. Shelby Insurance Co., 774 N.E. 2d 37 (Ind. 2002), finding the former three cases extend Kiger beyond its facts and affirm generally the ambiguity of the absolute pollution exclusion.

“We conclude, pursuant to the last fourteen years of precedent, that State Auto’s absolute pollution exclusion is ambiguous, must be construed in favor of the insured, and therefore will not operate to preclude coverage in connection with Flexdar’s TCE leakage,” she wrote. “Under Kiger and its progeny … an insurance policy must be specific if it wishes to except from coverage claims relating a particular alleged contaminant. It is within the province only of our Supreme Court to decide otherwise.”

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  1. Some are above the law in Indiana. Some lined up with Lodges have controlled power in the state since the 1920s when the Klan ruled Indiana. Consider the comments at this post and note the international h.q. in Indianapolis. http://www.theindianalawyer.com/human-trafficking-rising-in-indiana/PARAMS/article/42468. Brave journalists need to take this child torturing, above the law and antimarriage cult on just like The Globe courageously took on Cardinal Law. Are there any brave Hoosier journalists?

  2. I am nearing 66 years old..... I have no interest in contacting anyone. All I need to have is a nationality....a REAL Birthday...... the place U was born...... my soul will never be at peace. I have lived my life without identity.... if anyone can help me please contact me.

  3. This is the dissent discussed in the comment below. See comments on that story for an amazing discussion of likely judicial corruption of some kind, the rejection of the rule of law at the very least. http://www.theindianalawyer.com/justices-deny-transfer-to-child-custody-case/PARAMS/article/42774#comment

  4. That means much to me, thank you. My own communion, to which I came in my 30's from a protestant evangelical background, refuses to so affirm me, the Bishop's courtiers all saying, when it matters, that they defer to the state, and trust that the state would not be wrong as to me. (LIttle did I know that is the most common modernist catholic position on the state -- at least when the state acts consistent with the philosophy of the democrat party). I asked my RCC pastor to stand with me before the Examiners after they demanded that I disavow God's law on the record .... he refused, saying the Bishop would not allow it. I filed all of my file in the open in federal court so the Bishop's men could see what had been done ... they refused to look. (But the 7th Cir and federal judge Theresa Springmann gave me the honor of admission after so reading, even though ISC had denied me, rendering me a very rare bird). Such affirmation from a fellow believer as you have done here has been rare for me, and that dearth of solidarity, and the economic pain visited upon my wife and five children, have been the hardest part of the struggle. They did indeed banish me, for life, and so, in substance did the the Diocese, which treated me like a pariah, but thanks to this ezine ... and this is simply amazing to me .... because of this ezine I am not silenced. This ezine allowing us to speak to the corruption that the former chief "justice" left behind, yet embedded in his systems when he retired ... the openness to discuss that corruption (like that revealed in the recent whistleblowing dissent by courageous Justice David and fresh breath of air Chief Justice Rush,) is a great example of the First Amendment at work. I will not be silenced as long as this tree falling in the wood can be heard. The Hoosier Judiciary has deep seated problems, generational corruption, ideological corruption. Many cases demonstrate this. It must be spotlighted. The corrupted system has no hold on me now, none. I have survived their best shots. It is now my time to not be silent. To the Glory of God, and for the good of man's law. (It almost always works that way as to the true law, as I explained the bar examiners -- who refused to follow even their own statutory law and violated core organic law when banishing me for life -- actually revealing themselves to be lawless.)

  5. to answer your questions, you would still be practicing law and its very sad because we need lawyers like you to stand up for the little guy who have no voice. You probably were a threat to them and they didnt know how to handle the truth and did not want anyone to "rock the boat" so instead of allowing you to keep praticing they banished you, silenced you , the cowards that they are.

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