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Justices reaffirm uniform-contract interpreation approach

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The Indiana Supreme Court has reaffirmed the state’s reliance on the uniform-contract interpretation approach rather than a site-specific approach for deciding which of several states’ laws should apply to an environmental remediation insurance coverage case.

The justices determined that Indiana law doesn’t apply here. The Supreme Court ruled that Maryland law applies and should decide the outcome of a case that “typifies frequently recurring disputes over insurers’ obligations to defend and indemnify their insureds in the face of demands to clean up or pay for environmental contamination at multiple sites in multiple states.”

A unanimous 11-page ruling comes today in National Union Fire Insurance Company of Pittsburgh, et al. v. Standard Fusee Corporation , No. 49S04-1006-CV-318, a case out of Marion Superior Court that drew amicus curiae parties such as the Complex Insurance Claims Litigation Association, Eli Lilly, Citizens Energy Group, Vectren Corp., the National Solid Waste Management Association, and the Indiana Petroleum Marketers and Convenience Stores Association.

A manufacturer of emergency signaling flares, SFC is incorporated in Delaware and headquartered in Maryland, and since the late 1980s has owned various sites in multiple states. The company purchased comprehensive general liability insurance policies, and in 2005 it filed a suit against its insurers seeking a declaratory judgment that insurers were require to defend and indemnify SFC under the policies for environmental liabilities arising in Indiana and California.
 
The trial court applied Indiana substantive law to interpret the insurance policies, instead of Maryland law, and the insurance premiums were paid. Late last year, the Indiana Court of Appeals issued a 30-page decision that for the first time adopted a site-specific approach in deciding which state law should apply, rather than the uniform-contract interpretation approach that has long been recognized in Indiana. Following the uniform-contract interpretation approach would be contrary to the general principles of the Restatement (Second) of Conflict of Laws (1971), the appellate court held, and the respective states’ laws should apply because Indiana and California respectively have the most significant relationship with the contamination issues.

But looking to a long history of caselaw and adopted practice here, the Indiana justices overturned their intermediate appellate colleagues’ rationale from a year ago.

“After reviewing our doctrine’s history, we conclude that the uniform approach is more consistent with Indiana’s choice-of-law jurisprudence, and as such should apply in cases involving multisite, mulistate insurance policies,” Justice Frank Sullivan wrote.

Justice Sullivan cited the development of Indiana’s choice-of-law rules in the 65 years since the landmark decision of W. H. Barber Co. V. Hughes, 223 Ind. 570, 63 N.E.2d 417 (1945), in which the state court held a contract is governed by the law of the state where it is made, and that a contract is deemed made in the state where the last act necessary to make it a binding agreement occurs. With that ruling, Indiana became one of the first to suggest the use of what has become known as “the most significant relationship” approach in determining what law to apply in contract disputes.

“We see no reason why pollution sites in multiple states should be treated any differently than other contracts,” Justice Sullivan wrote, rejecting the rationale the Court of Appeals had used to justify its favor of the site-specific approach.

The justices also pointed to their ruling in Simon v. United States, 805 N.E. 2d 798, 801 (Ind. 2004), in which they clearly rejected the use of “the process of analyzing different issues within the same case separately under the laws of different states.”

“To be sure, our concern in contracts cases has been determining the state in most intimate contact with the facts,” the court wrote. “A single event – like executing a contract – has not been determinative if that event occurred in a state with insignificant contacts. Similarly, where environmental contamination plagues multiple sites in multiple states, the site of the pollution should not control if it is not located in the state with the most intimate contacts.”

Both parties disagreed about whether Indiana or Maryland law should apply, and the justices came to a different conclusion than the trial court about the place of performance pointing to Indiana. The SFC headquarters is located in Maryland, which indicates it’s the principle location of the insured risk. Some dispute may still remain about the location of insured risk, but the justices determined that the place of performance is not exclusively Indiana and so the “overall number and quality of contacts” favor Maryland over Indiana.

The reversal sends the case back to the trial level for the application of Maryland law to the entire dispute.
 

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  1. Yes diversity is so very important. With justice Rucker off ... the court is too white. Still too male. No Hispanic justice. No LGBT justice. And there are other checkboxes missing as well. This will not do. I say hold the seat until a physically handicapped Black Lesbian of Hispanic heritage and eastern religious creed with bipolar issues can be located. Perhaps an international search, with a preference for third world candidates, is indicated. A non English speaker would surely increase our diversity quotient!!!

  2. First, I want to thank Justice Rucker for his many years of public service, not just at the appellate court level for over 25 years, but also when he served the people of Lake County as a Deputy Prosecutor, City Attorney for Gary, IN, and in private practice in a smaller, highly diverse community with a history of serious economic challenges, ethnic tensions, and recently publicized but apparently long-standing environmental health risks to some of its poorest residents. Congratulations for having the dedication & courage to practice law in areas many in our state might have considered too dangerous or too poor at different points in time. It was also courageous to step into a prominent and highly visible position of public service & respect in the early 1990's, remaining in a position that left you open to state-wide public scrutiny (without any glitches) for over 25 years. Yes, Hoosiers of all backgrounds can take pride in your many years of public service. But people of color who watched your ascent to the highest levels of state government no doubt felt even more as you transcended some real & perhaps some perceived social, economic, academic and professional barriers. You were living proof that, with hard work, dedication & a spirit of public service, a person who shared their same skin tone or came from the same county they grew up in could achieve great success. At the same time, perhaps unknowingly, you helped fellow members of the judiciary, court staff, litigants and the public better understand that differences that are only skin-deep neither define nor limit a person's character, abilities or prospects in life. You also helped others appreciate that people of different races & backgrounds can live and work together peacefully & productively for the greater good of all. Those are truths that didn't have to be written down in court opinions. Anyone paying attention could see that truth lived out every day you devoted to public service. I believe you have been a "trailblazer" in Indiana's legal community and its judiciary. I also embrace your belief that society's needs can be better served when people in positions of governmental power reflect the many complexions of the population that they serve. Whether through greater understanding across the existing racial spectrum or through the removal of some real and some perceived color-based, hope-crushing barriers to life opportunities & success, movement toward a more reflective representation of the population being governed will lead to greater and uninterrupted respect for laws designed to protect all peoples' rights to life, liberty & the pursuit of happiness. Thanks again for a job well-done & for the inevitable positive impact your service has had - and will continue to have - on countless Hoosiers of all backgrounds & colors.

  3. Diversity is important, but with some limitations. For instance, diversity of experience is a great thing that can be very helpful in certain jobs or roles. Diversity of skin color is never important, ever, under any circumstance. To think that skin color changes one single thing about a person is patently racist and offensive. Likewise, diversity of values is useless. Some values are better than others. In the case of a supreme court justice, I actually think diversity is unimportant. The justices are not to impose their own beliefs on rulings, but need to apply the law to the facts in an objective manner.

  4. Have been seeing this wonderful physician for a few years and was one of his patients who told him about what we were being told at CVS. Multiple ones. This was a witch hunt and they shold be ashamed of how patients were treated. Most of all, CVS should be ashamed for what they put this physician through. So thankful he fought back. His office is no "pill mill'. He does drug testing multiple times a year and sees patients a minimum of four times a year.

  5. Brian W, I fear I have not been sufficiently entertaining to bring you back. Here is a real laugh track that just might do it. When one is grabbed by the scruff of his worldview and made to choose between his Confession and his profession ... it is a not a hard choice, given the Confession affects eternity. But then comes the hardship in this world. Imagine how often I hear taunts like yours ... "what, you could not even pass character and fitness after they let you sit and pass their bar exam ... dude, there must really be something wrong with you!" Even one of the Bishop's foremost courtiers said that, when explaining why the RCC refused to stand with me. You want entertaining? How about watching your personal economy crash while you have a wife and five kids to clothe and feed. And you can't because you cannot work, because those demanding you cast off your Confession to be allowed into "their" profession have all the control. And you know that they are wrong, dead wrong, and that even the professional code itself allows your Faithful stand, to wit: "A lawyer may refuse to comply with an obligation imposed by law upon a good faith belief that no valid obligation exists. The provisions of Rule 1.2(d) concerning a good faith challenge to the validity, scope, meaning or application of the law apply to challenges of legal regulation of the practice of law." YET YOU ARE A NONPERSON before the BLE, and will not be heard on your rights or their duties to the law -- you are under tyranny, not law. And so they win in this world, you lose, and you lose even your belief in the rule of law, and demoralization joins poverty, and very troubling thoughts impeaching self worth rush in to fill the void where your career once lived. Thoughts you did not think possible. You find yourself a failure ... in your profession, in your support of your family, in the mirror. And there is little to keep hope alive, because tyranny rules so firmly and none, not the church, not the NGO's, none truly give a damn. Not even a new court, who pay such lip service to justice and ancient role models. You want entertainment? Well if you are on the side of the courtiers running the system that has crushed me, as I suspect you are, then Orwell must be a real riot: "There will be no curiosity, no enjoyment of the process of life. All competing pleasures will be destroyed. But always — do not forget this, Winston — always there will be the intoxication of power, constantly increasing and constantly growing subtler. Always, at every moment, there will be the thrill of victory, the sensation of trampling on an enemy who is helpless. If you want a picture of the future, imagine a boot stamping on a human face — forever." I never thought they would win, I always thought that at the end of the day the rule of law would prevail. Yes, the rule of man's law. Instead power prevailed, so many rules broken by the system to break me. It took years, but, finally, the end that Dr Bowman predicted is upon me, the end that she advised the BLE to take to break me. Ironically, that is the one thing in her far left of center report that the BLE (after stamping, in red ink, on Jan 22) is uninterested in, as that the BLE and ADA office that used the federal statute as a sword now refuses to even dialogue on her dire prediction as to my fate. "C'est la vie" Entertaining enough for you, status quo defender?

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