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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. It's a big fat black mark against the US that they radicalized a lot of these Afghan jihadis in the 80s to fight the soviets and then when they predictably got around to biting the hand that fed them, the US had to invade their homelands, install a bunch of corrupt drug kingpins and kleptocrats, take these guys and torture the hell out of them. Why for example did the US have to sodomize them? Dubya said "they hate us for our freedoms!" Here, try some of that freedom whether you like it or not!!! Now they got even more reasons to hate us-- lets just keep bombing the crap out of their populations, installing more puppet regimes, arming one faction against another, etc etc etc.... the US is becoming a monster. No wonder they hate us. Here's my modest recommendation. How about we follow "Just War" theory in the future. St Augustine had it right. How about we treat these obvious prisoners of war according to the Geneva convention instead of torturing them in sadistic and perverted ways.

  2. As usual, John is "spot-on." The subtle but poignant points he makes are numerous and warrant reflection by mediators and users. Oh but were it so simple.

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  4. Duncan, It's called the RIGHT OF ASSOCIATION and in the old days people believed it did apply to contracts and employment. Then along came title vii.....that aside, I believe that I am free to work or not work for whomever I like regardless: I don't need a law to tell me I'm free. The day I really am compelled to ignore all the facts of social reality in my associations and I blithely go along with it, I'll be a slave of the state. That day is not today......... in the meantime this proposed bill would probably be violative of 18 usc sec 1981 that prohibits discrimination in contracts... a law violated regularly because who could ever really expect to enforce it along the millions of contracts made in the marketplace daily? Some of these so-called civil rights laws are unenforceable and unjust Utopian Social Engineering. Forcing people to love each other will never work.

  5. I am the father of a sweet little one-year-old named girl, who happens to have Down Syndrome. To anyone who reads this who may be considering the decision to terminate, please know that your child will absolutely light up your life as my daughter has the lives of everyone around her. There is no part of me that condones abortion of a child on the basis that he/she has or might have Down Syndrome. From an intellectual standpoint, however, I question the enforceability of this potential law. As it stands now, the bill reads in relevant part as follows: "A person may not intentionally perform or attempt to perform an abortion . . . if the person knows that the pregnant woman is seeking the abortion solely because the fetus has been diagnosed with Down syndrome or a potential diagnosis of Down syndrome." It includes similarly worded provisions abortion on "any other disability" or based on sex selection. It goes so far as to make the medical provider at least potentially liable for wrongful death. First, how does a medical provider "know" that "the pregnant woman is seeking the abortion SOLELY" because of anything? What if the woman says she just doesn't want the baby - not because of the diagnosis - she just doesn't want him/her? Further, how can the doctor be liable for wrongful death, when a Child Wrongful Death claim belongs to the parents? Is there any circumstance in which the mother's comparative fault will not exceed the doctor's alleged comparative fault, thereby barring the claim? If the State wants to discourage women from aborting their children because of a Down Syndrome diagnosis, I'm all for that. Purporting to ban it with an unenforceable law, however, is not the way to effectuate this policy.

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