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

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. I work with some older lawyers in the 70s, 80s, and they are sharp as tacks compared to the foggy minded, undisciplined, inexperienced, listless & aimless "youths" being churned out by the diploma mill law schools by the tens of thousands. A client is generally lucky to land a lawyer who has decided to stay in practice a long time. Young people shouldn't kid themselves. Experience is golden especially in something like law. When you start out as a new lawyer you are about as powerful as a babe in the cradle. Whereas the silver halo of age usually crowns someone who can strike like thunder.

  2. YES I WENT THROUGH THIS BEFORE IN A DIFFERENT SITUATION WITH MY YOUNGEST SON PEOPLE NEED TO LEAVE US ALONE WITH DCS IF WE ARE NOT HURTING OR NEGLECT OUR CHILDREN WHY ARE THEY EVEN CALLED OUT AND THE PEOPLE MAKING FALSE REPORTS NEED TO GO TO JAIL AND HAVE A CLASS D FELONY ON THERE RECORD TO SEE HOW IT FEELS. I WENT THREW ALOT WHEN HE WAS TAKEN WHAT ELSE DOES THESE SCHOOL WANT ME TO SERVE 25 YEARS TO LIFE ON LIES THERE TELLING OR EVEN LE SAME THING LIED TO THE COUNTY PROSECUTOR JUST SO I WOULD GET ARRESTED AND GET TIME HE THOUGHT AND IT TURNED OUT I DID WHAT I HAD TO DO NOT PROUD OF WHAT HAPPEN AND SHOULD KNOW ABOUT SEEKING MEDICAL ATTENTION FOR MY CHILD I AM DISABLED AND SICK OF GETTING TREATED BADLY HOW WOULD THEY LIKE IT IF I CALLED APS ON THEM FOR A CHANGE THEN THEY CAN COME AND ARREST THEM RIGHT OUT OF THE SCHOOL. NOW WE ARE HOMELESS AND THE CHILDREN ARE STAYING WITH A RELATIVE AND GUARDIAN AND THE SCHOOL WON'T LET THEM GO TO SCHOOL THERE BUT WANT THEM TO GO TO SCHOOL WHERE BULLYING IS ALLOWED REAL SMART THINKING ON A SCHOOL STAFF.

  3. Family court judges never fail to surprise me with their irrational thinking. First of all any man who abuses his wife is not fit to be a parent. A man who can't control his anger should not be allowed around his child unsupervised period. Just because he's never been convicted of abusing his child doesn't mean he won't and maybe he hasn't but a man that has such poor judgement and control is not fit to parent without oversight - only a moron would think otherwise. Secondly, why should the mother have to pay? He's the one who made the poor decisions to abuse and he should be the one to pay the price - monetarily and otherwise. Yes it's sad that the little girl may be deprived of her father, but really what kind of father is he - the one that abuses her mother the one that can't even step up and do what's necessary on his own instead the abused mother is to pay for him???? What is this Judge thinking? Another example of how this world rewards bad behavior and punishes those who do right. Way to go Judge - NOT.

  4. Right on. Legalize it. We can take billions away from the drug cartels and help reduce violence in central America and more unwanted illegal immigration all in one fell swoop. cut taxes on the savings from needless incarcerations. On and stop eroding our fourth amendment freedom or whatever's left of it.

  5. "...a switch from crop production to hog production "does not constitute a significant change."??? REALLY?!?! Any judge that cannot see a significant difference between a plant and an animal needs to find another line of work.

ADVERTISEMENT