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COA differs on why no insurer duty to defend

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A panel of Indiana Court of Appeals judges agreed that two insurance companies are entitled to summary judgment, but the judges disagreed as to why the insurers owed no duty to defend.

In P.R. Mallory & Co. Inc., et al. v. American Casualty Co. of Reading, PA., et al., No. 54A01-0903-CV-142, P.R. Mallory and other companies affiliated with Radio Materials Corp. sued American Casualty Co. and Continental Casualty Co. in 2000 for breach of contract regarding the insurers' duty to defend relating to environmental contaminations caused by Radio Materials. Radio Materials operated a manufacturing plant of television parts in Attica in which it had two open, unlined pits from 1950 to the 1980s that contained various contaminants and other hazardous wastes.

CCC issued a commercial casualty policy to Radio Materials in 1981; ACC issued three commercial casualty policies for the years 1982-1984.

Beginning in the 1960s, Radio Materials became aware of contaminants from its site leaking and entering neighboring properties. It attempted to remove most of the contaminated soil in the 1990s. In March 1999, the Environmental Protection Agency entered a consent order for Radio Materials in which the agency found a release of hazardous waste into the environment and Radio Materials had to undertake all the actions required by the order.

The trial court granted ACC and CCC's motion for summary judgment based on late notice.

Judges Elaine Brown and L. Mark Bailey agreed with the trial court's reasoning for entering summary judgment for the insurers. The plaintiffs argued that Radio Materials' duty to provide notice didn't arise until the company subjectively became aware of the property damage happening during the 1980 to 1984 time period. But the designated evidence showed that beginning the 1960s, Radio Materials was aware of contamination seeping out to nearby properties. In the 1980s the company sent notice to Kraft Foods Corp., which through a merger had interest in Radio Materials' assets, regarding potential environmental pollution problems.

The plaintiffs had knowledge of an occurrence before they notified the insurers and the plaintiffs' delay in notifying ACC and CCC of the occurrence constituted unreasonably late notice, wrote Judge Brown. P.R. Mallory and the other companies failed to rebut the presumption of prejudice as a matter of law.

In his separate opinion in which he concurred in result, Judge Edward Najam wrote the case turned on whether there was an "occurrence" during the policy period, not whether Radio Materials satisfied the notice requirement. Radio Materials showed no evidence of property damage to non-owned property during the policy period of 1980 to 1984, so no occurrence took place that could suggest coverage, he wrote.

"In a coverage case, it is incumbent on the insured to present facts that indicate coverage," he wrote. "As we have held, where the facts alleged by an insured (and summary judgment nonmovant) reveal no circumstances that would indicate coverage, the insurer can 'not be held to have been required to defend' the insured from third-party actions."

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  1. So that none are misinformed by my posting wihtout a non de plume here, please allow me to state that I am NOT an Indiana licensed attorney, although I am an Indiana resident approved to practice law and represent clients in Indiana's fed court of Nth Dist and before the 7th circuit. I remain licensed in KS, since 1996, no discipline. This must be clarified since the IN court records will reveal that I did sit for and pass the Indiana bar last February. Yet be not confused by the fact that I was so allowed to be tested .... I am not, to be clear in the service of my duty to be absolutely candid about this, I AM NOT a member of the Indiana bar, and might never be so licensed given my unrepented from errors of thought documented in this opinion, at fn2, which likely supports Mr Smith's initial post in this thread: http://caselaw.findlaw.com/us-7th-circuit/1592921.html

  2. When I served the State of Kansas as Deputy AG over Consumer Protection & Antitrust for four years, supervising 20 special agents and assistant attorneys general (back before the IBLE denied me the right to practice law in Indiana for not having the right stuff and pretty much crushed my legal career) we had a saying around the office: Resist the lure of the ring!!! It was a take off on Tolkiem, the idea that absolute power (I signed investigative subpoenas as a judge would in many other contexts, no need to show probable cause)could corrupt absolutely. We feared that we would overreach constitutional limits if not reminded, over and over, to be mindful to not do so. Our approach in so challenging one another was Madisonian, as the following quotes from the Father of our Constitution reveal: The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse. We are right to take alarm at the first experiment upon our liberties. I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations. Liberty may be endangered by the abuse of liberty, but also by the abuse of power. All men having power ought to be mistrusted. -- James Madison, Federalist Papers and other sources: http://www.constitution.org/jm/jm_quotes.htm RESIST THE LURE OF THE RING ALL YE WITH POLITICAL OR JUDICIAL POWER!

  3. My dear Mr Smith, I respect your opinions and much enjoy your posts here. We do differ on our view of the benefits and viability of the American Experiment in Ordered Liberty. While I do agree that it could be better, and that your points in criticism are well taken, Utopia does indeed mean nowhere. I think Madison, Jefferson, Adams and company got it about as good as it gets in a fallen post-Enlightenment social order. That said, a constitution only protects the citizens if it is followed. We currently have a bevy of public officials and judicial agents who believe that their subjectivism, their personal ideology, their elitist fears and concerns and cause celebs trump the constitutions of our forefathers. This is most troubling. More to follow in the next post on that subject.

  4. Yep I am not Bryan Brown. Bryan you appear to be a bigger believer in the Constitution than I am. Were I still a big believer then I might be using my real name like you. Personally, I am no longer a fan of secularism. I favor the confessional state. In religious mattes, it seems to me that social diversity is chaos and conflict, while uniformity is order and peace.... secularism has been imposed by America on other nations now by force and that has not exactly worked out very well.... I think the American historical experiment with disestablishmentarianism is withering on the vine before our eyes..... Since I do not know if that is OK for an officially licensed lawyer to say, I keep the nom de plume.

  5. I am compelled to announce that I am not posting under any Smith monikers here. That said, the post below does have a certain ring to it that sounds familiar to me: http://www.catholicnewworld.com/cnwonline/2014/0907/cardinal.aspx

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