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Judge concerned insurance ruling has ‘broad-range consequences’ for future cases

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The Indiana Court of Appeals issued a lengthy opinion Thursday dealing with an insurance coverage dispute between a company headquartered in Indiana and its insurers regarding claims from Taiwanese workers that they were made ill from contaminants from a manufacturing plant.

Former factory workers and their heirs filed a class-action lawsuit in Taiwan against Thomson Consumer Electronics Television Taiwan Ltd., which owned and operated the manufacturing plant from the late 1980s to 1992. The workers alleged they were exposed to toxic solvents while working at the plant and living in dormitories near the plant. Less than 1 percent of the company’s stock is owned by Thomson Inc. n/k/a Technicolor USA Inc., which is headquartered in Indiana. Thomson was named as a defendant based on theories of corporate veil piercing and joint liability.

In July 2008, Thomson notified its primary insurers about the Taiwan class action. Three days later, Thomson filed its original declaratory judgment complaint against its primary and umbrella insurers, which included XL Insurance America Inc. and Century Indemnity Co. The trial court ruled XL and Century have a duty to defend Thomson.

A point of disagreement among the appeals judges in Thomson Inc. n/k/a Technicolor USA, Inc. v. Insurance Company of North America n/k/a Century Indemnity Company, et al., and XL Insurance America, et al., 49A05-1109-PL-470 was over the proration terms in XL’s and Century’s policies. The trial court, citing Allstate Ins. Co v. Dana, 759 N.E.2d 1049, 1058 (Ind. 2001), referred to as Dana II, found no clear or precise proration terms, so coverage is for all sums related to the insurance subject to policy limits. The policies in the instant case used “those sums” instead of “all sums.” Judges Terry Crone and Cale Bradford cited a case out of the U.S. District Court for the Southern District of Indiana that contained similar policy language and held that the language at issue here is not subject to Dana II.

“We believe that the trial court will be best situated to select (and customize, if necessary) the fairest method of apportioning liability among the insurers in light of the factual complexities of the case at the appropriate time. And for that reason, we believe that the trial court should be afforded broad discretion in selecting and applying an apportionment method,” Crone wrote in the 83-page majority decision.

Chief Judge Nancy Vaidik dissented on this issue, writing that she agrees with Dana II and believes the language of the policies at issue is not specific enough to demand proration of damages.

“As Thomson points out in its brief, it will be difficult for a court to determine exactly when and in what amount damages occurred. The majority answers this by giving the trial-court judge two main tests to decide upon and ‘broad discretion in selecting and applying an apportionment method.’ This is unfair to the insurance companies, Thomson, and its employees,” she wrote.

“The risk that each of the parties calculated in offering and buying insurance is as uncertain post injury as ever. The majority opinion also has broad-range consequences for future long-tail coverage cases as the risk that each future insurer and insured calculate up front are not subject to change based upon the vicissitudes of the 400 trial-court judges who have received little or no direction from us.”

She agreed with her colleagues on all other issues, including the trial court’s finding of two “occurrences” under the XL and Century policies and that Thomson must satisfy the deductible for each occurrence for certain policies issued from 2000 to 2005.

The case is remanded for further proceedings.
 

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  1. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  2. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  3. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

  4. Here's an idea...how about we MORE heavily regulate the law schools to reduce the surplus of graduates, driving starting salaries up for those new grads, so that we can all pay our insane amount of student loans off in a reasonable amount of time and then be able to afford to do pro bono & low-fee work? I've got friends in other industries, radiology for example, and their schools accept a very limited number of students so there will never be a glut of new grads and everyone's pay stays high. For example, my radiologist friend's school accepted just six new students per year.

  5. I totally agree with John Smith.

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