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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. 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

  2. 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.

  3. 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.

  4. Why in the world would someone need a person to correct a transcript when a realtime court reporter could provide them with a transcript (rough draft) immediately?

  5. This article proved very enlightening. Right ahead of sitting the LSAT for the first time, I felt a sense of relief that a score of 141 was admitted to an Indiana Law School and did well under unique circumstances. While my GPA is currently 3.91 I fear standardized testing and hope that I too will get a good enough grade for acceptance here at home. Thanks so much for this informative post.

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