ILNews

Court rules on corporate insurance policy issues

Michael W. Hoskins
January 1, 2007
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One of the first things you'll notice about an Indiana Court of Appeals decision issued today is the number of attorneys and parties on the case.

The first four pages of the 29-page ruling in Travelers Casualty and Surety Company, et al. v. U.S. Filter Corp., list the parties and respective attorneys. Those include 13 appellant insurance companies and organizations, two appellees-plaintiffs, and three amici curiae parties from Indianapolis; Washington, D.C.; New York, Chicago; and parts of Michigan.

Issues addressed in this case are listed in the opinion as: 1. Whether the trial court erred in concluding that U.S. Filter acquired the rights to and is entitled to seek insurance coverage under Insurers' policies when the relevant corporate transactions did not assign rights under those policies; 2. Whether the trial court erred in holding that U.S. Filter is not, as a matter of law, precluded from seeking coverage under Insurers' policies notwithstanding U.S. Filter's noncompliance with the "consent-to-assignment" provision; and 3. Whether the trial court erred in granting U.S. Filter rights under Insurers' policies, but summarily denying Waste Management those same rights where no party requested such relief and no supportive evidence was designated.

Today's decision affirms and vacates the decision in part, remanding back to the trial court level.

"In a nutshell, this is a big win for Indiana policyholders," said Indianapolis attorney Brent Huber with Ice Miller, an attorney representing appellee Waste Management Holdings. "This often arises when one company buys another and tries to assign insurance to the buyer. You can still have coverage and the buying and selling of companies as corporate America often does, doesn't end liability coverage."

Writing for the unanimous three-judge panel, Judge James Kirsch delves into a case from Marion Superior Court that involves product liability insurance policies, corporate transactions going back to the 1930s, contract-based claims involving chose in action, and ultimately related public policy and Indiana case law going back to the late 1800s.

At the ground level, this dispute arises from U.S. Filter and Waste Management's efforts to assert rights under insurance policies issued to predecessor or affiliate companies, specifically relating to coverage for thousands of underlying bodily injury claims caused by exposure to silica working in the vicinity of a metal-cleaning air blast machine. Known as the "Wheelabrator," it produced silica dust that can cause a potentially deadly occupational lung disease if inhaled over time.

According to the appellate court, the significance of this litigation goes back to 1932 when the plaintiffs' predecessors first made the product now under ownership of U.S. Filter since 1996. Plaintiffs filed a breach of action complaint in 2004 for declaratory judgment, asserting they had rights under a policy issued under Travelers Casualty and Surety Company and a number of other insurance companies.

"This court has never addressed the question of when a chose in action becomes an enforceable right," Judge Kirsch wrote, dismissing a California Supreme Court ruling and ultimately relying on a U.S. Supreme Court cases to reach its decision. "Adopting the same principle, we hold that a chose in action arises under an occurrence-based insurance policy at the time of the covered loss - a conclusion that we reached many years ago."

With that, Judge Kirsch cited a century-old Indiana ruling (New v. German Ins. Co. of Freeport, 5 Ind. App. 82, 85,31, N.E. 475, 476 (Ind. Ct. App. 1892)) that held after a loss has occurred, a policy becomes a chose in action assignable like any other.

On the consent to transfer issue, the court wrote that the plaintiffs' predecessors and affiliates had compensated the insurers for insuring the risk associated with the Wheelabrator blast operation.

"Thus, to now hold the Insurers responsible for the liability arising under that risk only imposes on the Insurers the liability that they agreed to insure and for which they were already compensated," the opinion states. "Indeed, any contrary holding would provide an unfair windfall for Insurers."

Judge Kirsch wrote that the court was also persuaded by the considerations offered by amicus curiae parties that "the smooth flow of assets from one entity to another by way of merger or acquisition is integral to the functioning of a modern free market economy."
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  1. Call it unauthorized law if you must, a regulatory wrong, but it was fraud and theft well beyond that, a seeming crime! "In three specific cases, the hearing officer found that Westerfield did little to no work for her clients but only issued a partial refund or no refund at all." That is theft by deception, folks. "In its decision to suspend Westerfield, the Supreme Court noted that she already had a long disciplinary history dating back to 1996 and had previously been suspended in 2004 and indefinitely suspended in 2005. She was reinstated in 2009 after finally giving the commission a response to the grievance for which she was suspended in 2004." WOW -- was the Indiana Supreme Court complicit in her fraud? Talk about being on notice of a real bad actor .... "Further, the justices noted that during her testimony, Westerfield was “disingenuous and evasive” about her relationship with Tope and attempted to distance herself from him. They also wrote that other aggravating factors existed in Westerfield’s case, such as her lack of remorse." WOW, and yet she only got 18 months on the bench, and if she shows up and cries for them in a year and a half, and pays money to JLAP for group therapy ... back in to ride roughshod over hapless clients (or are they "marks") once again! Aint Hoosier lawyering a great money making adventure!!! Just live for the bucks, even if filthy lucre, and come out a-ok. ME on the other hand??? Lifetime banishment for blowing the whistle on unconstitutional governance. Yes, had I ripped off clients or had ANY disciplinary history for doing that I would have fared better, most likely, as that it would have revealed me motivated by Mammon and not Faith. Check it out if you doubt my reading of this, compare and contrast the above 18 months with my lifetime banishment from court, see appendix for Bar Examiners report which the ISC adopted without substantive review: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS

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  4. I'm the poor soul who spent over 10 years in prison with many many other prisoners trying to kill me for being charged with a sex offense THAT I DID NOT COMMIT i was in jail for a battery charge for helping a friend leave a boyfriend who beat her I've been saying for over 28 years that i did not and would never hurt a child like that mine or anybody's child but NOBODY wants to believe that i might not be guilty of this horrible crime or think that when i say that ALL the paperwork concerning my conviction has strangely DISAPPEARED or even when the long beach judge re-sentenced me over 14 months on a already filed plea bargain out of another districts court then had it filed under a fake name so i could not find while trying to fight my conviction on appeal in a nut shell people are ALWAYS quick to believe the worst about some one well I DID NOT HURT ANY CHILD EVER IN MY LIFE AND HAVE SAID THIS FOR ALMOST 30 YEARS please if anybody can me get some kind of justice it would be greatly appreciated respectfully written wrongly accused Brian Valenti

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