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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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  1. Linda, I sure hope you are not seeking a law license, for such eighteenth century sentiments could result in your denial in some jurisdictions minting attorneys for our tolerant and inclusive profession.

  2. Mazel Tov to the newlyweds. And to those bakers, photographers, printers, clerks, judges and others who will lose careers and social standing for not saluting the New World (Dis)Order, we can all direct our Two Minutes of Hate as Big Brother asks of us. Progress! Onward!

  3. My daughter was taken from my home at the end of June/2014. I said I would sign the safety plan but my husband would not. My husband said he would leave the house so my daughter could stay with me but the case worker said no her mind is made up she is taking my daughter. My daughter went to a friends and then the friend filed a restraining order which she was told by dcs if she did not then they would take my daughter away from her. The restraining order was not in effect until we were to go to court. Eventually it was dropped but for 2 months DCS refused to allow me to have any contact and was using the restraining order as the reason but it was not in effect. This was Dcs violating my rights. Please help me I don't have the money for an attorney. Can anyone take this case Pro Bono?

  4. If justice is not found in a court room, it's time to clean house!!! Even judges are accountable to a higher Judge!!!

  5. The small claims system, based on my recent and current usage of it, is not exactly a shining example of justice prevailing. The system appears slow and clunky and people involved seem uninterested in actually serving justice within a reasonable time frame. Any improvement in accountability and performance would gain a vote from me. Speaking of voting, what do the people know about judges and justice from the bench perspective. I think they have a tendency to "vote" for judges based on party affiliation or name coolness factor (like Stoner, for example!). I don't know what to do in my current situation other than grin and bear it, but my case is an example of things working neither smoothly, effectively nor expeditiously. After this experience I'd pay more to have the higher courts hear the case -- if I had the money. Oh the conundrum.

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