Irving Oil Limited v. ACE INA Insurance
2014 ME 62
| Me. | 2014Background
- IOL faced ~62 MTBE contamination suits; by the ruling, one case remained unsettled but has since settled, leaving none pending.
- IOL carried primary coverage with Royal Canada (1998–2000) and excess ACE; ACE claimed possible other primary policies but provided no record support.
- In 2009 IOL sought declarations that ACE had a defense and indemnity duty; a 2010 ruling denied due to unresolved particulars; 2012 renewed motions focused on exhaustion theories and a pollution exclusion.
- The court analyzed whether ACE’s duty to defend was triggered by the meaning of “the underlying insurance,” considering vertical and horizontal exhaustion theories.
- The trial court denied IOL’s declaratory judgment on the defense duty; on appeal ACE cross-appealed for summary judgment on exhaustion and pollution exclusion; the Maine Supreme Judicial Court ultimately dismissed the interlocutory appeal as no ongoing MTBE suits remained.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the death knell exception to the final judgment rule permits immediate appellate review | IOL argues the exception applies because ACE’s duty to defend affects defense rights | ACE contends the exception does not apply since MTBE suits are settled | Death knell exception does not apply; appeals dismissed |
| Whether ACE had a duty to defend IOL given exhaustion theories | IOL contends underlying insurance exhaustion (vertical or horizontal) triggers ACE’s defense duty | ACE disputes exhaustion or applies pollution exclusion | issues on exhaustion not decided due to interlocutory dismissal; focus shifts to appeal on defense costs later |
| Whether the policy’s ‘underlying insurance’ term meaning governs ACE’s defense obligation | IOL argues broad interpretation of underlying insurance | ACE argues narrower interpretation or different trigger | Court did not resolve this merits issue in light of dismissal; outlined framework |
Key Cases Cited
- Quirion v. Veilleux, 2013 ME 50 (2013) (death knell exception—fact-specific inquiry; not applicable here because no ongoing suits)
- Dairyland Ins. Co. v. Christensen, 740 A.2d 43 (Me. 1999) (limits to advisory opinions; final judgment rule policy concerns)
- Bond v. Bond, 30 A.3d 816 (Me. 2011) (collateral economy of final judgment rule; judicial economy rationale)
- Liberty v. Bennett, 46 A.3d 1141 (Me. 2012) (disqualification/rights to counsel as interlocutory appeal analog)
- Cox v. Commonwealth Land Title Ins. Co., 59 A.3d 1280 (Me. 2013) (duty to defend standard—comparison of complaint and policy)
- Mitchell v. Allstate Ins. Co., 36 A.3d 876 (Me. 2011) (duty to defend vs. indemnify—different analyses)
- Austin v. Universal Cheerleaders Ass’n, 812 A.2d 253 (Me. 2002) (exceptional circumstances rule; not here)