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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. Video pen? Nice work, "JW"! Let this be a lesson and a caution to all disgruntled ex-spouses (or soon-to-be ex-spouses) . . . you may think that altercation is going to get you some satisfaction . . . it will not.

  2. First comment on this thread is a fitting final comment on this thread, as that the MCBA never answered Duncan's fine question, and now even Eric Holder agrees that the MCBA was in material error as to the facts: "I don't get it" from Duncan December 1, 2014 5:10 PM "The Grand Jury met for 25 days and heard 70 hours of testimony according to this article and they made a decision that no crime occurred. On what basis does the MCBA conclude that their decision was "unjust"? What special knowledge or evidence does the MCBA have that the Grand Jury hearing this matter was unaware of? The system that we as lawyers are sworn to uphold made a decision that there was insufficient proof that officer committed a crime. How can any of us say we know better what was right than the jury that actually heard all of the the evidence in this case."

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  4. MCBA .... time for a new release about your entire membership (or is it just the alter ego) being "saddened and disappointed" in the failure to lynch a police officer protecting himself in the line of duty. But this time against Eric Holder and the Federal Bureau of Investigation: "WASHINGTON — Justice Department lawyers will recommend that no civil rights charges be brought against the police officer who fatally shot an unarmed teenager in Ferguson, Mo., after an F.B.I. investigation found no evidence to support charges, law enforcement officials said Wednesday." http://www.nytimes.com/2015/01/22/us/justice-department-ferguson-civil-rights-darren-wilson.html?ref=us&_r=0

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