Travelers Indem. Co. v. Summit Corp.

Decision Date30 August 1999
Docket NumberNo. 49A05-9711-CV-480.,49A05-9711-CV-480.
Citation715 N.E.2d 926
PartiesThe TRAVELERS INDEMNITY COMPANY and Northbrook Property & Casualty Insurance Company, Appellants-Defendants, v. SUMMIT CORPORATION OF AMERICA and Summit Finishing Company, Inc., Appellees-Plaintiffs.
CourtIndiana Appellate Court

John A. MacDonald, Anderson Kill & Olick, Philadelphia, Pennsylvania, Frank J. Deveau, Steven C. Shockley, Sommer & Barnard, Indianapolis, Indiana, Amicus Curiae Indiana Manufacturers Association.

James E. Rocap, Rocap Witchger & Threlkeld, Indianapolis, Indiana, Charles W. Browning, Richard G. Szymczak, Plunkett & Cooney, Detroit, Michigan, Attorneys for Appellant The Travelers Indemnity Company.

Maxwell Gray, Lowe Gray Steele & Darko, Indianapolis, Indiana, Stephen M. Kelley, Timothy J. Clarke, Kelley Casey & Clarke, Detroit, Michigan, Attorneys for Appellant Northbrook Property and Casualty Insurance Company.

Laura A. Foggan, Marilyn E. Kerst, Gregg A. Fisch, Wiley Rein & Fielding, Washington, D.C., Dennis F. Cantrell, Bingham Summers Welsh & Spilman, Indianapolis, Indiana, for Amicus Curiae Insurance Environmental Litigation Association.

George M. Plews, Jeffrey D. Featherstun, Plews Shadley Racher & Braun, Indianapolis, Indiana, Attorneys for Appellees.

OPINION

SHARPNACK, Chief Judge

Northbrook Property and Casualty Insurance Company ("Northbrook") appeals the trial court's grant of partial summary judgment with respect to Summit's claim for coverage under its insurance policies with Northbrook. Northbrook challenges this grant of partial summary judgment on five grounds, which we restate as:

1) whether Connecticut law or Indiana law should be applied to the action;

2) whether the term "suit" in the insurance policies includes environmental administrative actions;

3) whether the term "damages" in the insurance policies includes environmental clean up and response costs;

4) whether the "absolute pollution exclusion" provision of the insurance policies unambiguously bars environmental claims; and

5) whether "personal injury" provisions in the insurance policies provide coverage for these environmental cleanup claims.

We affirm.

FACTS

The relevant facts follow. Northbrook insured Summit from 1988 to 1996 under comprehensive general liability ("CGL") primary and umbrella/excess liability policies. Summit is a Connecticut corporation that is also headquartered in Connecticut. Northbrook is an Illinois corporation with its home office in Illinois. Summit's principal business is the manufacturing and finishing of metal parts. Summit has owned and operated facilities throughout the United States. Several sites with which Summit is involved have released chemicals into the environment. The United States Environmental Protection Agency ("EPA") and other environmental agencies have ordered Summit to clean up the contaminants at its various sites. There are seven sites at issue in this case that are located in Indiana, Illinois, Connecticut, and California.1 The sites are:

"[1] At Summit's former Mooresville, Indiana plant, where various chemicals associated with Summit's metal electroplating operations were discovered in 1989 which are the subject of a soil and groundwater cleanup.

At the Enviro-Chem Site, Boone County, Indiana, a facility which is the subject of a 1984 government cleanup order to Summit along with other companies where some of Summit's Indiana wastes allegedly were transported in 1982.

At the Great Lakes Asphalt Site, Zionsville, Indiana, a facility which is the subject of another government cleanup order to Summit along with other companies, where some of Summit's Indiana wastes allegedly were transported in 1982.

At the Third Site, Boone County, Indiana, a facility which is the subject of a 1996 government cleanup order to Summit along with other companies, where some of Summit's Indiana wastes allegedly were transported in 1982.

At Wastex Research, Inc., East St. Louis, Illinois, a solvent recovery facility which is the subject of a 1989 government cleanup order to Summit along with other companies, where some of Summit's Indiana wastes allegedly were transported from 1983 to 1989.

At Summit's Thomston, Connecticut plant, where various chemicals associated with Summit's 1980 to 1986 metal electroplating operations were removed and cleaned up in the soil and groundwater in response to a 1986 government cleanup order. In addition, there are claims arising from a release of chemicals associated with Summit's electroplating operations which are the result of a testing well accidentally drilled through an impoundment in 1991.

* * * * *

At Summit's Mountain View, California plant, where various chemicals associated with Summit's 1984 to 1989 metal electroplating operations at the facility were the subject of a 1989 government cleanup order."

Record, pp. 3534-3535.

On June 23, 1995, Summit filed a complaint for declaratory relief against Northbrook.2 Summit sought a declaration that Northbrook had a duty to defend and indemnify Summit for certain environmental liability claims made against it by state or federal regulatory agencies or third parties. Summit filed a motion for partial summary judgment seeking declaratory rulings on certain policy provisions. The Travelers filed a motion, joined by Northbrook, seeking a determination, pursuant to Ind. Trial Rule 44.1, that this action is governed by Connecticut law. Northbrook requested that the trial court decide the choice of law question before it was required to brief its response to the remaining substantive issues in Summit's motion for summary judgment. After a hearing, the trial court denied the defendant's motion to rule on the choice of law issue before ruling on the motion for partial summary judgment.

On July 21, 1997, the trial court issued its Findings of Fact, Conclusions of Law, and Order on Summit's motion for partial summary judgment and defendant's cross-motion on choice of law. The order, in relevant part, read as follows:

"IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that, there being no just cause for delay, the Court enters final partial judgment pursuant to Rule 54(B) of the Indiana Rules of Procedure on the following issues:
(1) that this action is governed by Indiana law;

(2) that, in addition to traditional judicial actions, "suit" in ... Northbrook's policies includes environmental administrative actions like those brought against Summit;

(3) that the meaning of the term "damages" in ... Northbrook's policies includes environmental cleanup and response costs like those incurred by Summit.

* * * * *

(5) that the "personal injury" provisions in... Northbrook's policies provide coverage for environmental cleanup claims against Summit; and,

(6) that the "absolute pollution exclusion" in ... Northbrook's policies is ambiguous and does not bar coverage for these environmental claims."

Record, p. 3564.

STANDARD OF REVIEW

In reviewing a decision on summary judgment, this court applies the same standard as the trial court. Schrader v. Eli Lilly & Co., 639 N.E.2d 258, 261 (Ind.1994), reh'g denied; Ind. Trial Rule 56(C). We construe the pleadings, affidavits, and designated materials in a light most favorable to the nonmovant and give careful scrutiny to assure that the losing party is not improperly prevented from having its day in court. Hartford Acc. & Indem. Co. v. Dana Corp., 690 N.E.2d 285, 291 (Ind.Ct.App.1997), trans. denied. When there are material disputed facts, or if undisputed facts give rise to conflicting reasonable inferences that affect the outcome, they must be resolved in favor of the nonmovant. Warner Trucking, Inc. v. Carolina Cas. Ins. Co., 686 N.E.2d 102, 104 (Ind.1997). The party appealing the grant of summary judgment has the burden of persuading this court on appeal that the trial court's ruling was erroneous. Jordan v. Deery, 609 N.E.2d 1104, 1107 (Ind.1993). "The construction of an insurance contract is a question of law for which summary judgment is particularly appropriate." State Farm Mut. Auto. Ins. Co. v. Gonterman, 637 N.E.2d 811, 813 (Ind.Ct.App.1994).

DISCUSSION
I.

The first issue is whether Summit's contract action should be governed by Connecticut or Indiana law. Northbrook asserts that there is a conflict between Indiana and Connecticut law requiring a choice of law analysis. For the purposes of our analysis, we will assume that a conflict exists.

Indiana follows the approach formulated by the RESTATEMENT (SECOND) OF CONFLICT OF LAWS when deciding which law to apply when there is a conflict. Dana Corp., 690 N.E.2d at 291; Eby v. York-Division, Borg-Warner, 455 N.E.2d 623, 626 (Ind.Ct.App.1983). If the parties have not made an effective choice of law, the court will consider the different contacts the parties have with the forums at issue. Dana, 690 N.E.2d at 291 (citing RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 188 (1971)). Indiana's choice of law rule for contract actions calls for applying the law of the forum with the most intimate contacts to the facts. Id. We will consider all acts of the parties touching the transaction in relation to the several states involved and will apply as the law governing the transaction the law of that state with which the facts are in most intimate contact. Id. The specific issue we address here is whether Connecticut or Indiana has the most intimate contacts with this action, requiring application of its law.

Northbrook argues that Connecticut law should apply because the estimated cost of cleaning up the site in Connecticut is the highest and, therefore, Connecticut is the location with the most intimate contacts. Summit argues that Indiana law should be applied because the principal location of the risk is in Indiana due to four of the sites being located in this state. The contacts we consider include:

"(a) the place of contracting,
(b) the place of negotiation of the contract,
(c) the place of performance,
(d) the location of the
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