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Court affirms insurer must cover environmental cleanup costs

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The Indiana Court of Appeals affirmed an order that an insurer pay post-notice costs of nearly $34,000 to its insured in an environmental cleanup in Mooresville.

Majestic made concrete blocks in Mooresville and installed a large underground storage tank and dispensing pumps to provide diesel fuel for its delivery vehicles. When it decided to remove the tank, a test in December 1997 revealed the samples were potentially contaminated. Majestic bought a commercial general liability policy from State Auto for one year that began Jan. 1, 1998. Majestic learned in mid-January that the site is contaminated. The Indiana Department of Environmental Management didn’t order a site investigation until 2006; Majestic filed its claim with State Auto in 2009 for coverage of the cleanup costs.

State Auto denied the claim based on the “known loss” and “late notice.” The trial court found the coverage under the policy was not barred by the known loss or voluntary payment provisions and coverage was for post-notice costs only. Majestic also got prejudgment interest on the $33,678.85 costs starting Oct. 11, 2011.

Majestic also received reimbursement of 91 percent of its reimbursable costs from IDEM’s Excess Liability Trust Fund, minus the ELTF’s $35,000 deductible.

In Meridian Mutual Insurance Company, n/k/a State Automobile Mutual Insurance Company v. Majestic Block & Supply, Inc., n/k/a Tutewiler Corporation, 49A05-1210-PL-533, the COA found Majestic did not have actual knowledge that a loss had occurred in order to prevent State Auto from covering some of the cleanup. When it purchased the policy, testing results had not been received. Nor is the recovery barred by the late notice doctrine, the judges held, citing Dreaded Inc. v. St. Paul Guardian Insurance Co., 904 N.E.2d 1267, 1273 (Ind. 2009). The order to pay only post-notice costs was appropriate as was prejudgment interest.

The COA also rejected State Auto’s claim that Majestic received a double recovery.

“We decline to reverse based on a characterization of the payments from the ELTF or Majestic’s responsibility for its deductible amount as pre-notice or post-notice. The ELTF is not an insurance contract pursuant to which the date of notice might be determinative of coverage. Rather, it was established to, among other things, provide ‘a source of money to satisfy liabilities incurred by owners and operators of underground petroleum storage tanks under IC 13-23-13-8 for corrective action,’” Judge Melissa May wrote. “State Auto cannot avoid coverage for the ELTF deductible amount by assigning ELTF funds to a period before its policy took effect.”

The judges declined to award attorney fees to Majestic.

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  1. Frankly, it is tragic that you are even considering going to an expensive, unaccredited "law school." It is extremely difficult to get a job with a degree from a real school. If you are going to make the investment of time, money, and tears into law school, it should not be to a place that won't actually enable you to practice law when you graduate.

  2. As a lawyer who grew up in Fort Wayne (but went to a real law school), it is not that hard to find a mentor in the legal community without your school's assistance. One does not need to pay tens of thousands of dollars to go to an unaccredited legal diploma mill to get a mentor. Having a mentor means precisely nothing if you cannot get a job upon graduation, and considering that the legal job market is utterly terrible, these students from Indiana Tech are going to be adrift after graduation.

  3. 700,000 to 800,000 Americans are arrested for marijuana possession each year in the US. Do we need a new justice center if we decriminalize marijuana by having the City Council enact a $100 fine for marijuana possession and have the money go towards road repair?

  4. I am sorry to hear this.

  5. I tried a case in Judge Barker's court many years ago and I recall it vividly as a highlight of my career. I don't get in federal court very often but found myself back there again last Summer. We had both aged a bit but I must say she was just as I had remembered her. Authoritative, organized and yes, human ...with a good sense of humor. I also appreciated that even though we were dealing with difficult criminal cases, she treated my clients with dignity and understanding. My clients certainly respected her. Thanks for this nice article. Congratulations to Judge Barker for reaching another milestone in a remarkable career.

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