ILNews

State Supreme Court rules in favor of power company insurers

Michael W. Hoskins
January 1, 2007
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The Indiana Supreme Court said today that insurance carriers are not required to pay for power companies' costs incurred in a federal lawsuit, nor the installation of new equipment to reduce pollution as ordered in a recent ruling by the Supreme Court of the United States.

In Cinergy Corp and Duke Energy v. Associated Electric & Gas Insurance Services, et al., 32S05-0604-CV-151, the state's highest court issued a 17-page unanimous opinion affirming a decision by Hendricks Superior Judge David H. Coleman. The trial judge had denied a motion by the power companies Cinergy and Duke for partial summary judgment.

Nineteen insurance companies had filed a complaint against Cinergy and Duke, wanting to determine the extent of the their insurance obligations with respect to a federal lawsuit relating to pollution reduction filed against the power companies by the United States, three states, and several environmental organizations. That case, U.S. v. Cinergy Corp. et al., No. 06-1224, was decided last year by the 7th Circuit Court of Appeals in Chicago. It upheld a decision by District Court Judge Larry McKinney in the Southern District of Indiana that an increase in actual emissions at industrial plants triggers new source review requirements for plants to install emissions controls.

The U.S. Supreme Court declined to hear the case in April, following a decision in a similar lawsuit that held the utility companies must install pollution control equipment on aging coal-fired power plants across the country.

According to this Indiana Supreme Court decision, the power companies filed a motion for plaintiff AEGIS to pay the more than $4 million the power companies have spent in defending itself in that Cinergy case - an amount exceeding the self-insured retention amount of up to $1 million. Costs include complying with the recent SCOTUS opinion that requires them to install equipment to reduce future emissions of pollutants, according to the state suit.

The insurance carriers - AEGIS - contended that the policies provide no coverage for claims made against the power companies in the federal suit, and therefore have no duty to pay defense costs.

The justices held that the phrase "ultimate net loss" as used in the insurance policies at issue, does not impose any responsibility on the carrier to pay for sums that the power companies might be legally obligated to pay as "ultimate net loss" for the costs of installing government-mandated equipment.

Justice Brent Dickson authored the opinion and wrote, "We affirm the trial court's denial of the motion because it seeks relief more extensive than that to which the power companies are entitled. ... Because the AEGIS insurance policies do not provide coverage for the costs of installing such equipment, the trial court did not err in denying partial summary judgment seeking to compel payment of all costs incurred by the power companies in defending all claims in the federal lawsuit."
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  1. Such things are no more elections than those in the late, unlamented Soviet Union.

  2. It appears the police and prosecutors are allowed to change the rules halfway through the game to suit themselves. I am surprised that the congress has not yet eliminated the right to a trial in cases involving any type of forensic evidence. That would suit their foolish law and order police state views. I say we eliminate the statute of limitations for crimes committed by members of congress and other government employees. Of course they would never do that. They are all corrupt cowards!!!

  3. Poor Judge Brown probably thought that by slavishly serving the godz of the age her violations of 18th century concepts like due process and the rule of law would be overlooked. Mayhaps she was merely a Judge ahead of her time?

  4. in a lawyer discipline case Judge Brown, now removed, was presiding over a hearing about a lawyer accused of the supposedly heinous ethical violation of saying the words "Illegal immigrant." (IN re Barker) http://www.in.gov/judiciary/files/order-discipline-2013-55S00-1008-DI-429.pdf .... I wonder if when we compare the egregious violations of due process by Judge Brown, to her chiding of another lawyer for politically incorrectness, if there are any conclusions to be drawn about what kind of person, what kind of judge, what kind of apparatchik, is busy implementing the agenda of political correctness and making off-limits legit advocacy about an adverse party in a suit whose illegal alien status is relevant? I am just asking the question, the reader can make own conclsuion. Oh wait-- did I use the wrong adjective-- let me rephrase that, um undocumented alien?

  5. of course the bigger questions of whether or not the people want to pay for ANY bussing is off limits, due to the Supreme Court protecting the people from DEMOCRACY. Several decades hence from desegregation and bussing plans and we STILL need to be taking all this taxpayer money to combat mostly-imagined "discrimination" in the most obviously failed social program of the postwar period.

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