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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. Good riddance to this dangerous activist judge

  2. What is the one thing the Hoosier legal status quo hates more than a whistleblower? A lawyer whistleblower taking on the system man to man. That must never be rewarded, must always, always, always be punished, lest the whole rotten tree be felled.

  3. I want to post this to keep this tread alive and hope more of David's former clients might come forward. In my case, this coward of a man represented me from June 2014 for a couple of months before I fired him. I knew something was wrong when he blatantly lied about what he had advised me in my contentious and unfortunate divorce trial. His impact on the proceedings cast a very long shadow and continues to impact me after a lengthy 19 month divorce. I would join a class action suit.

  4. The dispute in LB Indiana regarding lake front property rights is typical of most beach communities along our Great Lakes. Simply put, communication to non owners when visiting the lakefront would be beneficial. The Great Lakes are designated navigational waters (including shorelines). The high-water mark signifies the area one is able to navigate. This means you can walk, run, skip, etc. along the shores. You can't however loiter, camp, sunbath in front of someones property. Informational signs may be helpful to owners and visitors. Our Great Lakes are a treasure that should be enjoyed by all. PS We should all be concerned that the Long Beach, Indiana community is on septic systems.

  5. Dear Fan, let me help you correct the title to your post. "ACLU is [Left] most of the time" will render it accurate. Just google it if you doubt that I am, err, "right" about this: "By the mid-1930s, Roger Nash Baldwin had carved out a well-established reputation as America’s foremost civil libertarian. He was, at the same time, one of the nation’s leading figures in left-of-center circles. Founder and long time director of the American Civil Liberties Union, Baldwin was a firm Popular Fronter who believed that forces on the left side of the political spectrum should unite to ward off the threat posed by right-wing aggressors and to advance progressive causes. Baldwin’s expansive civil liberties perspective, coupled with his determined belief in the need for sweeping socioeconomic change, sometimes resulted in contradictory and controversial pronouncements. That made him something of a lightning rod for those who painted the ACLU with a red brush." http://www.harvardsquarelibrary.org/biographies/roger-baldwin-2/ "[George Soros underwrites the ACLU' which It supports open borders, has rushed to the defense of suspected terrorists and their abettors, and appointed former New Left terrorist Bernardine Dohrn to its Advisory Board." http://www.discoverthenetworks.org/viewSubCategory.asp?id=1237 "The creation of non-profit law firms ushered in an era of progressive public interest firms modeled after already established like the National Association for the Advancement of Colored People ("NAACP") and the American Civil Liberties Union ("ACLU") to advance progressive causes from the environmental protection to consumer advocacy." https://en.wikipedia.org/wiki/Cause_lawyering

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