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Court rules in favor of insurer in environmental cleanup dispute

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A release executed between a chemical manufacturing business and its insurer that relieved the insurer from claims or demands related to remediation was unambiguous and covered all policies held by the company, not just the primary liability ones, the Indiana Court of Appeals ruled.

United States Fidelity and Guaranty Co. was the general liability insurer of Warsaw Chemical Company when Warsaw learned of environmental contamination. Warsaw sought reimbursement for the remediation pursuant to its primary and excess policies. The insurer denied coverage under primary and excess liability policies. In 1992, the two entered into the release in exchange for $25,000.

Fifteen years later, Warsaw sued, arguing that the release only covered primary liability polices and there should be coverage under the excess policies. The trial court ultimately entered judgment in favor of Warsaw for $417,953.

At issue in United States Fidelity and Guaranty Company v. Warsaw Chemical Company, Inc., 49A04-1203-CT-97, is the language in the 1992 release and the distinction between recitals – or “whereas” clauses – and operative language in contracts. The release stated that USF&G would be forever discharged “from any further claims … .” The Court of Appeals held under the binding precedent of Irwin’s Bank v. Fletcher, etc. Trust Co. Rec (1924) 195 Ind. 699, 145 N.E. 869, 146 N.E. 869, and Kerfoot v. Kessener (1949) 227 Ind. 58, 84 N.E.2d 190, the recitals referencing only the primary policies may not be used to interpret the unambiguous operative language releasing the insurer from any further claims.

The judges rejected Warsaw’s claim that those cases are no longer good law based on OEC-Diasonics Inc. v. Major, 674 N.E.2d 1312 (Ind. 1996).

“Recital language that arguably suggests that the release applied to only some of the insurance policies Warsaw had with USF&G does not trump this clear language. Because the Release covered the excess policies, the trial court erred in denying USF&G’s summary judgment motion on this point. We therefore reverse the judgment of the trial court and remand for entry of summary judgment in favor of USF&G,” Judge Cale Bradford wrote.

 

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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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