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Two insurance companies are suing an Indianapolis shopping center after the center attempted to recover remediation costs related to an Indiana Department of Environmental Management claim that identified the property owner as potentially responsible for environmental contamination.
Defendant Washington Shoppes LP had filed a claim seeking insurance coverage, including defense and indemnity, from plaintiffs Travelers Property Casualty Company of America and St. Paul Fire and Marine Insurance Company for the costs to respond to the department’s claim and to remediate the site, which used to house a dry cleaning business.
Travelers and St. Paul Fire and Marine filed a lawsuit against Washington Shoppes Nov. 26 in Marion Superior Court. The lawsuit also lists The Broadbent Company, Inc. as a defendant.
The company owns the retail area Washington Shoppes operates.
Attorneys for the defendants and plaintiffs did not immediately respond to The Indiana Lawyer’s requests for comment.
From 1987 to 1996, Sunrise Dry Cleaners operated a dry cleaning business at or around 10021 E. Washington St. in Indianapolis, where Washington Shoppes is currently located.
Washington Shoppes has owned the site since 1998.
At the request of the shopping center, a site investigation was conducted in 2023 and the presence of several chemicals and pollutants in the soil and groundwater were found at the site.
The primary chemical found at the site was tetrachloroethylene (PCE), a chemical traditionally used in commercial dry-cleaning operations. Once PCE is discharged into the environment, it typically degrades over time into what is known as “degradation products” of PCE, which were also found during the site investigation.
After receiving a claim from the department of environmental management about the presence of the chemicals, Washington Shoppes sought defense and indemnification coverage from Travelers and St. Paul (the latter of which issued certain excess liability policies under Travelers).
Travelers, in turn, reviewed the letter and additional materials and declined coverage for the claim. In the lawsuit, Travelers specifies that it cannot determine whether its insurance policy for Washington Shoppes states the insurance company as being obligated to defend and/or indemnify the shopping center in relation to the claim.
Each of the primary and excess policies Travelers has with Washington Shoppes contains a clause that excludes insurance coverage for pollutants like tetrachloroethylene.
Travelers argues that it is not obligated to cover the claim unless Washington Shoppes meets its burden of proof that it does qualify as an insured under its policies with the insurance company.
The insurance company also claims that it should be barred from coverage of the claim if Washington Shoppes was aware of the actual or potential contamination of the site prior to its acquisition of it, or if the shopping center knew of the contamination prior to the issuance of the Travelers insurance policies but failed to disclose the information to Travelers.
Travelers is seeking a declaration from the court that it does not owe any defense or indemnity coverage to Washington Shoppes for the claim.
The case is Travelers Property Casualty Company of America, St. Paul Fire and Marine Insurance Company v. The Broadbent Company, Inc., Washington Shoppes LP, 49D01-2511-CE-056363.
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