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COA orders trial over 1 issue in contaminated development land suit

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The Indiana Court of Appeals has ordered a trial on the issue of whether the known loss doctrine would bar coverage of an insurance policy held by the owner of land sold for a housing development that later was found to have been contaminated with toxic waste. A builder sued the landowner, claiming he knew of the potential contamination and failed to inform the builder.

George Kopetsky and Durabuilders, now KB Home Indiana Inc., entered into an agreement in 1998 where KB Home would purchase lots in a housing development being developed by Kopetsky. He indicated in the agreement that he was unaware of any contamination in Cedar Park at the time. KB Home became aware that some of the lots it had purchased contained contaminants from a nearby business and filed its lawsuit in 2007 against Kopetsky and those responsible for the contamination.

KB Home alleged that Kopetsky knew in 2002 some of the lots were contaminated but waited until 2004 to tell KB home of the problem. KB purchased more than 60 lots during that time.

Kopetsky’s commercial general liability insurance carrier, Indiana Insurance Co., in 2009 sought a declaration that it had no duty to defend or indemnify him in the lawsuit. The trial court ruled against the insurance company. His wife, Patricia, was substituted as a party after Kopetsy passed away in 2010.

The case, Indiana Insurance Company v. Patricia Kopetsky, and KB Home Indiana Inc., 49A02-1304-PL-340, brings up an issue of first impression. The policies preclude coverage for bodily injury or property damage for which the insured is obligated to pay damages by reason of the assumption of the liability in a contract or agreement. The judges agreed with Kopetsky that while he may be held liable for entering into the agreement and breaching it, this is not the same thing as assuming liability pursuant to it.

“Although our research has uncovered no Indiana case precisely on point, today we explicitly endorse the proposition that ‘assumed’ liability is liability originally incurred by a third party but then taken on by another,” Judge Cale Bradford wrote. “Today we join those jurisdictions who have held that contractual liability exclusions in CGL policies bar coverage not for liability incurred by a contract breach but, rather, for liability assumed from a third party, which seems to be the majority position by a wide margin.”

The judges held that KB Home successfully alleged “property damage” caused by an “occurrence” pursuant to the policies, and that the policies’ “expected and intended” and “contractual liability” exclusions do not work to bar coverage. But the designated evidence generates a question of fact as to whether the known loss doctrine would bar coverage. There is evidence showing that Kopetsky was aware of the contamination in Cedar Park before the effective dates of the first of his policies with Indiana Insurance.  The case is remanded for trial on the known loss doctrine issue.
 

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  2. 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.

  3. 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.

  4. 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.

  5. 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!

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