ILNews

Justices disagree on pollution exclusion coverage

Back to TopCommentsE-mailPrintBookmark and Share

A divided Indiana Supreme Court has held that the pollution exclusion contained in a general commercial liability policy is ambiguous and should be construed to provide coverage rather than in favor of the insurance company trying to deny coverage.

In a 3-2 decision in State Automobile Mutual Insurance Company v. Flexdar, Inc. and RTS Realty, Justices Robert Rucker and Brent Dickson affirmed a ruling by Marion Superior Judge Michael Keele in favor of Flexdar. Justice Steven David concurred in result. But Justice Frank Sullivan and Chief Justice Randall Shepard disagreed, writing that they think the majority’s ruling will result in higher insurance premiums.

The case involves an Indianapolis rubber stamp and printing plate facility that operated from the mid-1990s to 2003, and how the manufacturing process used a chemical solvent that later appeared in the soil and groundwater on and near the site. The Indiana Department of Environmental Management informed the company it would be liable for cleanup costs, and Flexdar turned to its commercial general liability and umbrella insurance policies with State Automobile Mutual Insurance for defense and indemnification. State Auto agreed to defend Flexdar against the claims under a reservation of its right to deny coverage, but it later argued that the contamination wasn’t covered because of a pollution exclusion in the policy.

The trial court agreed with Flexdar that the policy’s exclusion language was ambiguous and should be construed against State Auto, and the intermediate appellate court affirmed.

Rucker wrote that Indiana applies basic contract principles to these issues and precedent has consistently held that an insurer can and should specify what falls within its pollution exclusion. In cases where the court’s found the language ambiguous, it has ruled in favor of coverage. In this case, the question is whether the policy language is sufficiently unambiguous to identify the chemical solvent as a pollutant, and this time they’ve determined it is not. Precedent dictates affirming the trial court’s decision, he wrote.

Sullivan and Shepard dissented in a two-page opinion, finding in favor of the insurer and noting they would have reversed the trial judge’s decision. Pointing to a 1996 decision from the state’s justices, Sullivan wrote that Indiana caselaw has never before stood for the proposition that all pollution exclusions are unenforceable but that is what this ruling now does.

 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Hmmmmm ..... How does the good doctor's spells work on tyrants and unelected bureacrats with nearly unchecked power employing in closed hearings employing ad hoc procedures? Just askin'. ... Happy independence day to any and all out there who are "free" ... Unlike me.

  2. Today, I want to use this opportunity to tell everyone about Dr agbuza of agbuzaodera(at)gmail. com, on how he help me reunited with my husband after 2 months of divorce.My husband divorce me because he saw another woman in his office and he said to me that he is no longer in love with me anymore and decide to divorce me.I seek help from the Net and i saw good talk about Dr agbuza and i contact him and explain my problem to him and he cast a spell for me which i use to get my husband back within 2 days.am totally happy because there is no reparations and side-effect. If you need his help Email him at agbuzaodera(at)gmail. com

  3. The practitioners and judges who hail E-filing as the Saviour of the West need to contain their respective excitements. E-filing is federal court requires the practitioner to cram his motion practice into pigeonholes created by IT people. Compound motions or those seeking alternative relief are effectively barred, unless the practitioner wants to receive a tart note from some functionary admonishing about the "problem". E-filing is just another method by which courts and judges transfer their burden to practitioners, who are the really the only powerless components of the system. Of COURSE it is easier for the court to require all of its imput to conform to certain formats, but this imposition does NOT improve the quality of the practice of law and does NOT improve the ability of the practitioner to advocate for his client or to fashion pleadings that exactly conform to his client's best interests. And we should be very wary of the disingenuous pablum about the costs. The courts will find a way to stick it to the practitioner. Lake County is a VERY good example of this rapaciousness. Any one who does not believe this is invited to review the various special fees that system imposes upon practitioners- as practitioners- and upon each case ON TOP of the court costs normal in every case manually filed. Jurisprudence according to Aldous Huxley.

  4. Any attorneys who practice in federal court should be able to say the same as I can ... efiling is great. I have been doing it in fed court since it started way back. Pacer has its drawbacks, but the ability to hit an e-docket and pull up anything and everything onscreen is a huge plus for a litigator, eps the sole practitioner, who lacks a filing clerk and the paralegal support of large firms. Were I an Indiana attorney I would welcome this great step forward.

  5. Can we get full disclosure on lobbyist's payments to legislatures such as Mr Buck? AS long as there are idiots that are disrespectful of neighbors and intent on shooting fireworks every night, some kind of regulations are needed.

ADVERTISEMENT