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COA: Insurers have no duty to defend in environmental case

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The Indiana Court of Appeals reversed the decision by an Indiana court relying on Maryland law that granted summary judgment and defense costs to a business whose product led to perchlorate contamination in California and Indiana.

Perchlorate had been discovered in water samples in California and Peru, Ind., where Standard Fusee Corp. had facilities. The company makes highway and marine signal/safety flares, in which an essential ingredient is perchlorate. Standard Fusee notified its comprehensive general liability insurance carriers, including Chubb Custom Insurance Co. and GAN North American Insurance Co., about the claims at the facilities and sought defense and indemnification. Both insurers rejected their duty to defend and refused indemnification based on pollution exclusions.

The trial court, relying on Maryland law because that is where Standard Fusee is headquartered, ruled in favor of the company and awarded more than $2 million in defense costs. The judge held that the total pollution exclusion clause in the policies is not applicable to Standard Fusee’s liability for the release of the contaminate, thereby triggering the duty to defend and indemnify.

In Chubb Custom Insurance Company, et al. v. Standard Fusee Corporation, 49A02-1301-PL-91, the insurers claim that if the release of perchlorate is defined as traditional environmental pollution, Maryland law enforces the application of the pollution exclusion clause in the insurance contract and coverage is precluded.

Guided by the principles of Maryland’s contract interpretation, the Court of Appeals concluded that perchlorate is included within the usual, accepted meaning of “pollutant.” Judge Patricia Riley noted the continuous discharge of perchlorate over multiple years went beyond the routine commercial hazard of an occasional spill.

“Based on the facts before us, we conclude that Standard Fusee’s claim is based on a hazardous pollution contamination, resulting from the cumulative effect of numerous releases which occurred on an ongoing basis during the regular course of business over an extended period of time, up to the point where the pollution became concomitant to Standard Fusee’s regular business activity,” she wrote.

“We expect that, our decision notwithstanding, interpretation of the scope of pollution exclusion clauses likely will continue to be ardently litigated throughout state and federal courts. We are also aware that courts may arrive at divergent decisions from our own within the specific context of perchlorate contamination. Yet, guided by Maryland’s rules for interpreting insurance contracts, we conclude that the total pollution exclusion clause applies and relieves Appellants of their duty to defend and indemnify the Standard Fusee in the underlying action,” she wrote.
 

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  1. The practitioners and judges who hail E-filing as the Saviour of the West need to contain their respective excitements. E-filing is federal court requires the practitioner to cram his motion practice into pigeonholes created by IT people. Compound motions or those seeking alternative relief are effectively barred, unless the practitioner wants to receive a tart note from some functionary admonishing about the "problem". E-filing is just another method by which courts and judges transfer their burden to practitioners, who are the really the only powerless components of the system. Of COURSE it is easier for the court to require all of its imput to conform to certain formats, but this imposition does NOT improve the quality of the practice of law and does NOT improve the ability of the practitioner to advocate for his client or to fashion pleadings that exactly conform to his client's best interests. And we should be very wary of the disingenuous pablum about the costs. The courts will find a way to stick it to the practitioner. Lake County is a VERY good example of this rapaciousness. Any one who does not believe this is invited to review the various special fees that system imposes upon practitioners- as practitioners- and upon each case ON TOP of the court costs normal in every case manually filed. Jurisprudence according to Aldous Huxley.

  2. Any attorneys who practice in federal court should be able to say the same as I can ... efiling is great. I have been doing it in fed court since it started way back. Pacer has its drawbacks, but the ability to hit an e-docket and pull up anything and everything onscreen is a huge plus for a litigator, eps the sole practitioner, who lacks a filing clerk and the paralegal support of large firms. Were I an Indiana attorney I would welcome this great step forward.

  3. Can we get full disclosure on lobbyist's payments to legislatures such as Mr Buck? AS long as there are idiots that are disrespectful of neighbors and intent on shooting fireworks every night, some kind of regulations are needed.

  4. I am the mother of the child in this case. My silence on the matter was due to the fact that I filed, both in Illinois and Indiana, child support cases. I even filed supporting documentation with the Indiana family law court. Not sure whether this information was provided to the court of appeals or not. Wish the case was done before moving to Indiana, because no matter what, there is NO WAY the state of Illinois would have allowed an appeal on a child support case!

  5. "No one is safe when the Legislature is in session."

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