THOMSON, INC. n/k/a TECHNICOLOR USA, INC., et al., Appellants-Plaintiffs,
XL INSURANCE AMERICA, INC. f/k/a WINTERTHUR INTERNATIONAL AMERICA INSURANCE COMPANY, et al., Appellees-Defendants
APPEAL FROM THE MARION SUPERIOR COURT. The Honorable Michael D. Keele, Judge. Cause No. 49D07-0807-PL-30746.
ATTORNEY FOR APPELLANT: GEORGE M. PLEWS, SEAN M. HIRSCHTEN, Plews Shadley Racher & Braun LLP, Indianapolis, Indiana.
ATTORNEY FOR APPELLEE: STEPHEN J. PETERS, DAVID I. RUBIN, Plunkett Cooney, P.C., Indianapolis, Indiana.
KIRSCH, Judge. ROBB, J., concurs., BAKER, J., dissents with separate opinion.
Thomson, Inc. n/k/a Technicolor USA, Inc. (" Thomson" ) appeals the trial court's order granting summary judgment in favor of XL Insurance America, Inc. f/k/a Winterthur International America Insurance Company (" XL" ) on Thomson's claim for insurance coverage. Thomson raises several issues on appeal, of which we find the following dispositive:
I. Whether the trial court erred in granting summary judgment to XL because the trial court incorrectly concluded that the known loss doctrine prohibited Thomson from recovering under its primary or umbrella policies issued by XL as to the Taiwan site.
II. Whether the trial court erred in granting summary judgment to XL because a material issue of fact exists as to whether Thomson knew about contamination at the particular area of the Circleville, Ohio site at issue.
We reverse and remand.
FACTS AND PROCEDURAL HISTORY
This appeal is part of an insurance coverage dispute between Thomson and many of its insurers. XL, one of the insurers, sold both primary and umbrella policies to Thomson covering 2000 through 2006. This particular case arises out of a dispute concerning insurance coverage between Thomson and XL for costs incurred by Thomson related to the investigation and
cleanup of two environmentally contaminated sites, one in Taiwan and the other in Circleville, Ohio.
The Taiwan Plant
In 1987, Thomson SA, a French company, acquired General Electric's (" GE" ) consumer electronics business, including a subsidiary called RCA Taiwan, Ltd. (" RCAT" ). Among other things, RCAT operated a manufacturing plant (" the Taiwan Plant" ) in Taiwan. In 1989, RCAT changed its American name to Thomson Consumer Electronics Television Taiwan, Ltd. (" TCETV" ).
Throughout its history, the operations at the Taiwan Plant used a variety of solvents. Over the course of the years, chlorinated solvents--which are known human carcinogens--made their way into the soil and groundwater on site, and eventually began migrating into the groundwater flow beyond the site.
When Thomson SA acquired RCAT from GE in 1987, a baseline assessment was prepared to establish the extent of GE's liability for environmental contamination. And indeed, the assessment established that chlorinated solvents had contaminated both the soil and groundwater as of February 1989. In 1992, TCETV reached out to local Taiwanese government officials and proposed connecting neighboring properties to the municipal water supply. Evidently, the government declined the offer, and the public was not notified of the contamination. Also in 1992, TCETV sold the Taiwan Plant to another corporation.
On June 2, 1994, a Taiwanese legislator held a press conference to publicly accuse TCETV of contaminating the soil and groundwater at and around the Taiwan Plant. Following the press conference, the Director General of the Taiwan Environmental Protection Agency's (" TEPA" ) Bureau of Water Quality Protection demanded that TCETV develop a cleanup strategy. TEPA did not order TCETV to remediate the soil or groundwater because, at that time, there was no statute authorizing Taiwanese agencies to impose retroactive liability on former owners, such as TCETV, by compelling them to remediate.
On June 16, 1994, Thomson SA's risk manager notified CIGNA, its insurer at the time, that " Taiwan authorities inform[ed] us of the existence of toxic substances in the ground" at the Taiwan Plant and " are holding us responsible." Appellee's App. at 436. Thomson SA also expressed concern that, " these substances could have (or could have had) negative effects upon the health of our employees, to be seen in the neighborhood drawing water from wells in the proximity of" the Taiwan Plant. Id. The letter requested that an insurance claim be opened. On October 11, 1995, Thomson sent a claim declaration regarding " Taiwan Pollution" for " assumption of responsibility resulting from the discovery in Taiwan of toxic industrial waste contamination of a site formerly used by Thomson," bearing a date of claim of June 2, 1994. Id. at 438.
Notwithstanding the lack of a remediation order from TEPA, TCETV and GE began the remediation process and successfully remediated the soil. A TCETV employee explained why the company decided to proceed with remediation voluntarily:
even if there wasn't a specific, definitive legal statute that [T]EPA . . . could point to to require the cleanup, there were other reasons to go ahead and proceed to make sure that the situation in Taiwan was handled appropriately; that being, one, to minimize down the road potential impact that could be caused by letting this situation continue to not be addressed, and . . . it's good corporate practice to . . . take care of situations before they get out of control so that you can minimize, in the long run, potential liability . . . to the entire Thomson group.
App. at 149-50. In 1998, the soil remediation had been successful enough that TEPA issued a " No Further ...