ILNews

COA: Insurers have no duty to defend in environmental case

Back to TopCommentsE-mailPrintBookmark and Share

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.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Oh my lordy Therapist Oniha of the winexbackspell@gmail.com I GOT Briggs BACK. Im so excited, It only took 2days for him to come home. bless divinity and bless god. i must be dreaming as i never thoughts he would be back to me after all this time. I am so much shock and just cant believe my eyes. thank you thank you thank you from the bottom of my heart,he always kiss and hug me now at all times,am so happy my heart is back to me with your help Therapist Oniha.

  2. Hail to our Constitutional Law Expert in the Executive Office! “What you’re not paying attention to is the fact that I just took an action to change the law,” Obama said.

  3. What is this, the Ind Supreme Court thinking that there is a separation of powers and limited enumerated powers as delegated by a dusty old document? Such eighteen century thinking, so rare and unwanted by the elites in this modern age. Dictate to us, dictate over us, the massess are chanting! George Soros agrees. Time to change with times Ind Supreme Court, says all President Snows. Rule by executive decree is the new black.

  4. I made the same argument before a commission of the Indiana Supreme Court and then to the fedeal district and federal appellate courts. Fell flat. So very glad to read that some judges still beleive that evidentiary foundations matter.

  5. KUDOS to the Indiana Supreme Court for realizing that some bureacracies need to go to the stake. Recall what RWR said: "No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" NOW ... what next to this rare and inspiring chopping block? Well, the Commission on Gender and Race (but not religion!?!) is way overdue. And some other Board's could be cut with a positive for State and the reputation of the Indiana judiciary.

ADVERTISEMENT