Indiana Insurance Company v. Patricia Kopetsky, and KB Home Indiana Inc.
14 N.E.3d 850
Ind. Ct. App.2014Background
- KB Home Indiana Inc. and Kopetsky dispute Indiana Insurance's duty under four CGL policies for contamination at Cedar Park.
- Patricia Kopetsky petitions rehearing to fix a factual error and clarify whether George Kopetsky knew of contamination before obtaining CGL coverage.
- Policy language includes a known claim exclusion barring coverage if any insured or authorized employee knew of damage prior to the policy period.
- George learned of contamination in May 2002, during the first policy year (April 29, 2002 – April 29, 2003); Indiana Insurance learned of it in the first year as well.
- Court applies the known claim exclusion, not the common-law known loss doctrine, to determine coverage for the policy years two through four.
- Court holds that knowledge of damage prior to the policy period bars coverage for the second through fourth years, while knowledge prior to the first year affects only the first year.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the known claim exclusion bar coverage for later years? | Kopetsky argues known loss doctrine could apply to extend coverage. | Indiana Insurance contends known claim exclusion controls, barring later years. | Known claim exclusion controls; second–fourth years barred. |
| Does knowledge of contamination before the policy period affect only the first year or all years? | Knowledge pre-period could influence all years under known loss doctrine. | Exclusion bars based on pre-period knowledge regardless of later years. | Pre-period knowledge affects only the first year; exclusion governs the rest. |
| What standard of 'knowledge' applies for the known claim exclusion? | Utilize known loss doctrine standard of knowledge. | Apply the knowledge standard dictated by the known claim exclusion language. | Use the exclusion’s knowledge standard; known loss doctrine has no applicability here. |
| Should the court revisit factual statements about Cedar Park's sections on rehearing? | Correct misstatement to align with actual Cedar Park layout. | Not essential to the dispositive issue; factual error corrected. | Factual correction acknowledged; it does not affect the ruling on coverage. |
Key Cases Cited
- Sheehan Construction Co., Inc. v. Continental Casualty Co., 935 N.E.2d 160 (Ind. 2010) (Supreme Court approach to policy exclusions and fortuity)
- Sheehan Construction Co., Inc. v. Continental Casualty Co., 938 N.E.2d 685 (Ind. 2010) ( reh’g opinion confirming holding)
- General Housewares Corp. v. National Surety Corp., 741 N.E.2d 408 (Ind. Ct. App. 2000) (known loss doctrine; fortuity principle in insurance)
- Quanta Indem. Co. v. Davis Homes, LLC, 606 F. Supp. 2d 941 (S.D. Ind. 2009) (discussion of known claim exclusion language in CGL policies)
- Montrose Chem. Corp. of California v. Admiral Ins. Co., 10 Cal. 4th 645 (Cal. 1995) (prepolicy fortuity and continuous injury guidance)