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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. Should be beat this rap, I would not recommend lion hunting in Zimbabwe to celebrate.

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  4. All these sites putting up all the crap they do making Brent Look like A Monster like he's not a good person . First off th fight actually started not because of Brent but because of one of his friends then when the fight popped off his friend ran like a coward which left Brent to fend for himself .It IS NOT a crime to defend yourself 3 of them and 1 of him . just so happened he was a better fighter. I'm Brent s wife so I know him personally and up close . He's a very caring kind loving man . He's not abusive in any way . He is a loving father and really shouldn't be where he is not for self defense . Now because of one of his stupid friends trying to show off and turning out to be nothing but a coward and leaving Brent to be jumped by 3 men not only is Brent suffering but Me his wife , his kids abd step kidshis mom and brother his family is left to live without him abd suffering in more ways then one . that man was and still is my smile ....he's the one real thing I've ever had in my life .....f@#@ You Lafayette court system . Learn to do your jobs right he maybe should have gotten that year for misdemeanor battery but that s it . not one person can stand to me and tell me if u we're in a fight facing 3 men and u just by yourself u wouldn't fight back that you wouldn't do everything u could to walk away to ur family ur kids That's what Brent is guilty of trying to defend himself against 3 men he wanted to go home tohisfamily worse then they did he just happened to be a better fighter and he got the best of th others . what would you do ? Stand there lay there and be stomped and beaten or would u give it everything u got and fight back ? I'd of done the same only I'm so smallid of probably shot or stabbed or picked up something to use as a weapon . if it was me or them I'd do everything I could to make sure I was going to live that I would make it hone to see my kids and husband . I Love You Brent Anthony Forever & Always .....Soul 1 baby

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