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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. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  2. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  3. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

  4. Justice has finally been served. So glad that Dr. Ley can finally sleep peacefully at night knowing the truth has finally come to the surface.

  5. While this right is guaranteed by our Constitution, it has in recent years been hampered by insurance companies, i.e.; the practice of the plaintiff's own insurance company intervening in an action and filing a lien against any proceeds paid to their insured. In essence, causing an additional financial hurdle for a plaintiff to overcome at trial in terms of overall award. In a very real sense an injured party in exercise of their right to trial by jury may be the only party in a cause that would end up with zero compensation.

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