Justices take environmental contamination appeal

March 3, 2015

The Indiana Supreme Court took just one case on transfer last week, a case involving a dispute over coverage for environmental contamination. The Court of Appeals ordered a trial on whether the known loss doctrine would bar insurance coverage, but later found that the “known claim” exclusion applies.

In August, on rehearing, the Court of Appeals agreed with Indiana Insurance that the insurance policies’ “known claim” exclusionary language controls in Indiana Insurance Company v. Patricia Kopetsky, and KB Home Indiana Inc., 49A02-1304-PL-340. That decision is consistent with the Indiana Supreme Court ruling in Sheehan Construction Co., Inc. v. Continental Casualty Co., 935 N.E.2d 160 (2010), the judges held.

In June, the COA ordered a trial on the issue of whether the known loss doctrine would bar coverage by Indiana Insurance. George Kopetsky sold land to KB Home Indiana for a housing development. It’s alleged that he knew as early as May 2002 that some of the lots were contaminated. He obtained coverage from Indiana Insurance in April 2002 that was in effect for a four-year period.

The appellate court also barred coverage for the second through fourth years because Kopetsky knew of the contamination no later than May 2002.

The justices denied transfer to 23 other cases for the week ending Feb. 27.


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