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. I just wanted to point out that Congressman Jim Sensenbrenner, Senator Feinstein, former Senate majority leader Bill Frist, and former attorney general John Ashcroft are responsible for this rubbish. We need to keep a eye on these corrupt, arrogant, and incompetent fools.

  2. Well I guess our politicians have decided to give these idiot federal prosecutors unlimited power. Now if I guy bounces a fifty-dollar check, the U.S. attorney can intentionally wait for twenty-five years or so and have the check swabbed for DNA and file charges. These power hungry federal prosecutors now have unlimited power to mess with people. we can thank Wisconsin's Jim Sensenbrenner and Diane Feinstein, John Achcroft and Bill Frist for this one. Way to go, idiots.

  3. I wonder if the USSR had electronic voting machines that changed the ballot after it was cast? Oh well, at least we have a free media serving as vicious watchdog and exposing all of the rot in the system! (Insert rimshot)

  4. Jose, you are assuming those in power do not wish to be totalitarian. My experience has convinced me otherwise. Constitutionalists are nearly as rare as hens teeth among the powerbrokers "managing" us for The Glorious State. Oh, and your point is dead on, el correcta mundo. Keep the Founders’ (1791 & 1851) vision alive, my friend, even if most all others, and especially the ruling junta, chase only power and money (i.e. mammon)

  5. Hypocrisy in high places, absolute immunity handed out like Halloween treats (it is the stuff of which tyranny is made) and the belief that government agents are above the constitutions and cannot be held responsible for mere citizen is killing, perhaps has killed, The Republic. And yet those same power drunk statists just reel on down the hallway toward bureaucratic fascism.

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