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High court rules in favor of insurers in silica case

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Companies that owned the assets of an industrial blast machine can't seek coverage from the insurers who issued liability policies for previous owners of the machine, the Indiana Supreme Court ruled yesterday.

At issue in Travelers Casualty and Surety Co., et al. v. United States Filter Corp., et al., No. 49S02-0712-CV-596, is whether or not United States Filter Corp. and other companies that at one time held the assets of the Wheelabrator blast machine had the liability insurance coverage rights passed to them through the same corporate transactions that brought them the blast machine assets.

The trial court agreed with U.S. Filter and the other companies that the rights passed to the current holders of the assets, granting them summary judgment.

But the Supreme Court reversed the trial court and directed judgment for the insurers. Each of the insurance policies involved in this case contained a provision barring assignment of the policy without the insurer's consent. Even though the company holding the assets to the blast machine may have written an insurance agreement to transfer the policy, the insurers never consented to make the assignment valid, wrote Chief Justice Randall T. Shepard.

The asset holders of the blast machine argue that certain claims under the policies did transfer to them as choses in action despite consent-to-agreement provisions. Courts have often recognized an exception to the enforcement of consent-to-agreement clauses for assignments made after a loss has occurred, wrote the chief justice, because after a loss occurs, the indemnity policy is a vested claim against the insurer that can be freely assigned or sold like any other chose in action.

Under the occurrence-based comprehensive general liability policies, the question in the instant case is whether occurred - but not yet reported - losses form the basis of choses in action that would transfer the insurance policies.

The high court read the consent-to-assignment provisions in the policies to apply to coverage transfers of any scope "because it is hard to see a practical difference between the assignment of the entire policy and the assignment of a single claim," wrote the chief justice. A chose in action is only transferable in these circumstances if it is assigned at a moment when the policyholder could have brought its own action against the insurer for coverage; under the liability policies in this case, that moment doesn't happen until a claim is made against the insured. None of the parties in this case contend anyone knew of the alleged injuries from the silica exposure when the transactions took place transferring the blast machine's assets, wrote Chief Justice Shepard. As a result, the companies weren't entitled to coverage under their predecessors' insurance policies.

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  1. So that none are misinformed by my posting wihtout a non de plume here, please allow me to state that I am NOT an Indiana licensed attorney, although I am an Indiana resident approved to practice law and represent clients in Indiana's fed court of Nth Dist and before the 7th circuit. I remain licensed in KS, since 1996, no discipline. This must be clarified since the IN court records will reveal that I did sit for and pass the Indiana bar last February. Yet be not confused by the fact that I was so allowed to be tested .... I am not, to be clear in the service of my duty to be absolutely candid about this, I AM NOT a member of the Indiana bar, and might never be so licensed given my unrepented from errors of thought documented in this opinion, at fn2, which likely supports Mr Smith's initial post in this thread: http://caselaw.findlaw.com/us-7th-circuit/1592921.html

  2. When I served the State of Kansas as Deputy AG over Consumer Protection & Antitrust for four years, supervising 20 special agents and assistant attorneys general (back before the IBLE denied me the right to practice law in Indiana for not having the right stuff and pretty much crushed my legal career) we had a saying around the office: Resist the lure of the ring!!! It was a take off on Tolkiem, the idea that absolute power (I signed investigative subpoenas as a judge would in many other contexts, no need to show probable cause)could corrupt absolutely. We feared that we would overreach constitutional limits if not reminded, over and over, to be mindful to not do so. Our approach in so challenging one another was Madisonian, as the following quotes from the Father of our Constitution reveal: The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse. We are right to take alarm at the first experiment upon our liberties. I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations. Liberty may be endangered by the abuse of liberty, but also by the abuse of power. All men having power ought to be mistrusted. -- James Madison, Federalist Papers and other sources: http://www.constitution.org/jm/jm_quotes.htm RESIST THE LURE OF THE RING ALL YE WITH POLITICAL OR JUDICIAL POWER!

  3. My dear Mr Smith, I respect your opinions and much enjoy your posts here. We do differ on our view of the benefits and viability of the American Experiment in Ordered Liberty. While I do agree that it could be better, and that your points in criticism are well taken, Utopia does indeed mean nowhere. I think Madison, Jefferson, Adams and company got it about as good as it gets in a fallen post-Enlightenment social order. That said, a constitution only protects the citizens if it is followed. We currently have a bevy of public officials and judicial agents who believe that their subjectivism, their personal ideology, their elitist fears and concerns and cause celebs trump the constitutions of our forefathers. This is most troubling. More to follow in the next post on that subject.

  4. Yep I am not Bryan Brown. Bryan you appear to be a bigger believer in the Constitution than I am. Were I still a big believer then I might be using my real name like you. Personally, I am no longer a fan of secularism. I favor the confessional state. In religious mattes, it seems to me that social diversity is chaos and conflict, while uniformity is order and peace.... secularism has been imposed by America on other nations now by force and that has not exactly worked out very well.... I think the American historical experiment with disestablishmentarianism is withering on the vine before our eyes..... Since I do not know if that is OK for an officially licensed lawyer to say, I keep the nom de plume.

  5. I am compelled to announce that I am not posting under any Smith monikers here. That said, the post below does have a certain ring to it that sounds familiar to me: http://www.catholicnewworld.com/cnwonline/2014/0907/cardinal.aspx

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