*1
UNION PACIFIC RAILROAD as Suc- Chicago
cessor-In-Interest Railway Company,
North Western Appellant,
Plaintiff and
CERTAIN UNDERWRITERS AT LONDON, al., Including
LLOYD’S et Casualty Co., Defendants Appellees.
No. 22931.
Supreme of South Dakota. Court April
Argued 2009. Aug.
Decided
that a determination of which state’s applies is necessary rail- *3 road is not entitled to relief under either state’s law. AND
FACTS PROCEDURE In 1910 Chicago [¶ 2.] & North West- (C NW) ern Railway Company & con- a property pre- structed roundhouse on Huron, viously acquired in South Dakota. Between 1910 and &C NW used repair facility roundhouse as service and for locomotives. Beginning in the 1950s through C & NW also conducted refueling operations at the roundhouse. Around the same time 3.] the round- constructed, house was C & NW built a system for phase separation and disposal generated by waste the roundhouse. Sommervold, D. Arlo Sommervold Law system This consisted of three separation Firm, Dakota, Falls, Sioux South Richard ponds connected to the roundhouse and to Burns, J. Gray, Timothy Zachary M. V. each pipes underwater and storm Block, Moen, LLC, & Chicago, Jenner Illi- ponds sewers. The oils allowed to rise nois, Attorneys appellant. for plaintiff and while allowing surface sedi- heavier ments and contaminants settle Adam, Thompson, M. May, Charles bottom. Gerdes, LLP, Pierre, & Thompson, South Dakota, Barton, During heavy large Alicia J. M. rains or when Kevin Mur- Carluccio, phy, volumes waste water entered the Murphy ponds, Colliau Elenius Texas, Morrow, Dallas, & the water disposal system Keener from waste Attor- neys drainage sometimes overflow into a appellees. for defendants and
ditch located the north side of the WALD, VON Judge. Circuit ponds that connected to Ravine Creek. emptied Ravine Creek into the Riv- James (UP) Union Pacific Railroad City er near the of Huron’s drinking water brought suit seeking recovery from its in- point. intake surance carrier of a cleanup con- C & NW obtained excess Huron, site taminated located South policies at issue this matter from Conti- Dakota. Company Continental Insurance (Continental) years nental for the summary judg- moved for and 1964 to Each policy the grounds ment on that the railroad did provided coverage for losses excess provide timely notice of loss $500,000 following provi- and contained the governed, that Illinois law which under sion: prevail required the insurer to show untimely prejudice. notice caused The The shall Insured written notice and, agreed granted
circuit court Company Continen- as as loss soon loss, summary tal judgment. practicable We affirm re- after the the Insured the lack garding Company of notice and conclude shall proof render voluntarily & loss, C NW decided Insured. signed and sworn cleanup site of the Huron Insured, reason- undertake often as perform the EPA threatened to to examina- ably required, shall submit and seek reimbursement by any person named tions oath under all of purchased In 1995 UP C NW. & Company and shall subscribe by the environ- assets and assumed its same; and, NW’s may be reason- as often as obligations. UP entered into cost mental for exami- ably produce shall required, bills, DM & E account, sharing agreement with wherein invoices nation all books *4 of costs vouchers, percent cover 90 the of copies UP would or certified and other In June investigation cleanup. the and lost, original at rea- thereof if be such 1995 an Administrative Order of Consent desig- place sonable time and (AOC) EPA the to UP to repre- sent Company nated the or their liability acceptance of for sentatives, and formalize UP’s permit and extracts shall UP, E, the DM & and the Huron site. copies be made. thereof to of AOC and negotiated EPA the terms the discharges In 1962 the waste August on 1996. finalized it Between prob- causing from the were roundhouse September entered into 1995 and 1997 UP City Treat- lems at the of Huron Water contracts with consultants and contractors a dike ment C & NW constructed Plant. for of the site. In late 1997 cleanup the the north of the roundhouse between area substantially the com- cleanup of site was drainage bordering prop- the the and ditch monitoring continuing pleted, with some the erty. of plumbing It also modified today. ponds adjacent to the dike. 18, 1997, September On after proper- In 1986 & NW sold the substantially completing cleanup, the Minnesota, Dakota, East- ty in Huron to of for liability notified its the Continental (DM E),& but Corporation ern Railroad timing has Huron site. UP stated that envi- responsibility existing for retained that UP and Conti- notice reflected <& ronmental contamination. In 1990 C nental and other insurers had been en- $500,000 in NW established environmental gaged in over environmen- similar lawsuits potential reserves for the remediation damage coverage in property tal insurance pollution at the Huron site. which and the other insurers had the time noti- pay. refused At 15,1994, February 8.] On United fied over Agency Environmental Protection States $5,000,000 spent remediating had been (EPA) through Notice notified C & NW soil, excavate the contaminated site to (PRP Notice) Liability that C of Potential water, empty polluted pond treat responsible be held for & NW would soil, grass ponds plant fill with clean environmental contamination were, and ponds formerly where the stated, the Huron site. The PRP Notice plumbing remove all of the from you damages for re- any are insured “[i]f ponds. All roundhouse and between sulting the release hazardous sub- to do was monitor remained stances, contaminants pollutants, and/or groundwater at the site. so, already suggest we and have done 26, 1997, you your September inform insurance carrier On Conti- considering notice with a responded has nental spent that EPA UP’s attempting investi- letter it was spending public informing additional funds to UP that here, releases at the Site.” to obtain the at issue reserv- gate control and/or ing rights policies, under the and asked Continental. Continental claimed it was help investigation in its UP’s obligation relieved of its cover- requested: claim. Continental age it was time- provided with ly and all Copies correspon- Additionally, 1. notice.
dence and documentation received claimed Illinois law applied, which did not from, or sent party gov- require the insurer to show that late agency ernment relative to Union prejudice. 2, 2003, notice caused On May Pacific’s involvement at the refer- granted circuit court summary judg- enced sites. ment in against favor Continental and UP via a letter A decision. written order Copies correspon- all May 22, was issued on 2003. UP filed an dence and documentation relative to appeal of pollutants July the decision to this Court how and when were dis- sites, remand, charged 2003. After at the limited the circuit relative to alleged how and when the contami- court issued letter decision dated Janu- *5 31, 2007, transpired. ary nation and a written order dated 7, 2007, March affirming original deci- Copies correspon- 3. and all (1) sion. The circuit court held Illi- and dence documentation UP be- nois substantive law applied to the matter injury” lieved that “bodily indicated governed the interpretation of Conti- “property damage,” any, and/or (2) nental’s insurance at issue and transpired during the [Continental] was obligation Continental relieved policy periods. provide coverage to UP because UP 4. and all Copies correspon- provide failed to timely notice of the loss. dence and documentation regarding UP filed a notice of appeal from the circuit any investigations and remedial April court’s decisions with this Court on measures relative the sites. 4, 2007. Any 5. details documentation assist in the [Continental] STANDARD OF REVIEW evaluation of these claims. grant “In a reviewing of sum respond When UP failed to to Continen- 6—56(c) mary judgment under SDCL letter, tal’s sent four additional 15— we must determine moving whether the again requesting letters the information. party gen has demonstrated there is no The additional letters were sent on No- uine issue of fact he is 14,1997, material 9,1998, February vember August judgment 14,1998 entitled to a matter law.” as 25,1999. finally January Co., Rogers 25, v. Allied Mut. Ins. 520 1999, letter January dated was titled 614, (S.D.1994). N.W.2d 615 we “Fifth “Once Request” and Final and informed determine that the material are respond UP that if it did facts thirty within days, undisputed, our review is limited assume that cov- whether erage longer being correctly applied.” was no sought. UP Simonson, 73, ¶ 7, respond Pauley failed to v. 2006 SD the letters sent Continental, 665, ques 720 and Continental closed the N.W.2d 667. “We review file on claim. tions of law de novo no discretion given to the circuit court.” Id. declaratory brought judg- contracts, Circuit, interpreting ment in the Third “When insurance action Judicial County, uniformly Beadle the Honorable R. Er- we have them Jon held reviewable presiding, recovery ickson seek a matter of law under the de novo 616 unreasonable;’ ‘ridiculously incongruous or v. rel. Friesz Friesz ex
standard.” ¶ 5, Co., to be parties, presumed SD that the Ins. 2000 result City Farm ends, Ins. (citing pursuing 679 DeSmet rational persons 619 N.W.2d rational 102, ¶ 5, Gibson, upon.” 1996 552 very unlikely agreed SD are Co. Club, 99; Nelson, Aero (citing Economic Ameri N.W.2d 656 N.W.2d at (4th 2000); N.W.2d Dictionary Inc. v. Ins. Heritage Avemco can (S.D.1995); Mut. Auto. State Farm v. AM Group, Inc. General Beanstalk Vostad, Cir.2002)). 520 N.W.2d Ins. Co. v. F.3d Corp., (S.D.1994)). determining “This includes unlikely the ab- very It is ambig whether an insurance contract timeframe for notice particular sence of a (citing 520 N.W.2d Rogers, uous.” Id. al- was intended eliminate timeframe unreason- together. ridiculous and SD Dakota Fire Ins. Hoglund v. for UP to think able ¶¶ 7-8, 742 N.W.2d notice whenever would allow to it was appropriate, it determined whether
ANALYSIS fifty years immediately after the loss or Notice loss. The date of the more from the scenario, contends that it was we find one probable provide notice to duty under no Conti intended for convincing, parties is that the *6 specified timeframe under nental within a to be into the factor read reasonableness by issued Continental. policies notice, the as policy regarding demonstrated in the provision the claims that because by practicable” “as soon as timeframe the places practicable” an “as soon as policies applied providing proof loss. Notice proof require of loss timeframe on logically come at the same loss would ment, place but not a similar time- does time, before, of loss. providing proof if not requirement, frame on the notice of loss in Any would end an interpretation notice of the loss at provide could UP absurd result. agree.
time. We
not
do
addition,
the absence of
[¶ 16.]
The
at
provision
issue
requirement
that
a time constraint on
policies requires
give
that
UP
Conti
provide
notice of
the insured
written
loss,
proof
notice of
nental written
policy.
ambiguity
in the
loss creates
as
after the loss.
practicable
of loss
soon as
language
a contract
is
“Whether
provision
that
the notice
To determine
law.” All
question
is ... a
ambiguous
any type
not
of time con
provide
Co.,
Koehn,
SD
v.
2007
Star
Inc.
Const.
straint,
contends,
would create an
¶
Thus,
736,
111,
33 741 N.W.2d
contracts
absurd result. “We do
to determine how to
required
Court
interpretations
produce
as to
such broad
ambiguity.
construe
Lillibridge v. Meade
an absurd result.”
# 46-1,
17,
Generally,
¶ 19,
the Court
SD
746
School Dist.
2008
Stern,
in favor of the
428,
ambiguities
v.
construe
(citing Kling
N.W.2d
433
¶
However,
8,
615,
3);
this is not the normal
n.
insured.
case are have known that policies would be are policies policies] containing “insurance implicated at the time PRP was provisions that Notice nonstandard have been ne- thus, sent and between would not have been re gotiated the insurer and the in- (8th quired sured.” Black’s notice until such time as Dictionary Law manuscript policies ... in- policy, “[A] could utilized. adhesion, pre- dicates that it was not an par [EJxcess insurers ... not usually do printed policy negotiated by but ticipate in the defense the case and field; parties two a level equal playing therefore not require do notice unless therefore, [the insured] not entitled to appears likely claim impli that the will any special protection.” Engineer- Koch cate the ... excess the “insured Co., Inc., Inc. ing Cas. Gibraltar must given show notice was when (E.D.Mo.1995). F.Supp. poli concluded the excess insurance sophisticat- Continental and & NW were cy and, implicated if the are facts parties ed on a playing level field not in dispute, whether the act insured negotiation the insurance contracts. C unreasonably ed by withholding notice hired Chicago NW insurance brokers in up point, insurer is a negotiate the terms of the policies question of law for the court to deter result, length with arms Continental. As (Hartford mine.” Accident & Indemni negotiated the terms of the were ty v. Rush-Presbyterian-St. Co. Lukes agreed party each rather than (1992), Medical 231 Ill.App.3d Center Thus, upon prefer- forced the insured. *7 143, 150-51, 641, 172 Ill.Dec. 595 N.E.2d ence for strict enforcement the against 1311, denied, 627, appeal 146 Ill.2d and, company dispelled insurance is there- 798, Ill.Dec. 602 N.E.2d fore, not in apply this case. Conse- a quently, reasonableness standard should First Montgomery State Ins. Co. v. Ward applied be notice in regarding of loss this Inc., 851, Ill.App.3d 204 Ill.Dec. case. 814, 715, (1994). However, 642 N.E.2d give C & NW UP and failed to duty give “The to notice
[¶ 18.] arises apparent notice even it the when was .that when, circumstances, under the the in- policies implicated. excess In would be has reason of possibility sured to know the August 1995 C & esti consultants claim, NW/UP of an impending regardless of cleanup mated the cost the to be to $2.3 whether the insured believes that he or clearly million. This would in liable, $3.5 she is that the claim is valid.” 16 formed C & that the there was § on Williston Contracts 49:109 NW/UP 2000) (citations omitted). potential that the excess insurance C & NW had policies implicated, be policies as the impending reason to know of the claim coverage in provided for losses when it received PRP excess Notice $500,000. 31, 1996, By EPA March had February on 1994. The PRP UP $500,000 spent Notice informed & NW it was over on the and that a potentially September over responsible party spent and that it UP had $1,000,000 notify investigation should its insurance carrier. This is on and remedia perhaps point at earliest which notice tion of the Huron site. At either point, “A contract South Dakota law. states: impli would be policies that the UP knew to law interpreted according cated. is to be place of the where is usage addition, clear from the it is [¶ 20.] or, place indicate a performed it does not Redick, UP’s former testimony of Robert the law and performance, according Insurance, argu- through Manager Id. usage place where it is made.” attorney, had no ment from its that UP de- notifying upon intention circuit UP contends [¶ 23.] impli- that the would be termining in Illinois substantive applying court erred prior dealings contends had cated. UP in the insurance law this case because re- in which Continental with Continental performed was to be in South produce many documents but quired UP hand, Continental, Dakota. until lawsuit filed. nothing then did was law Illinois substantive contends step of skip on its own to UP decided perform- apply place should because providing reasonable notice. While policy ance not in the was indicated unpleasant experience have had an in policy was Illinois. because the made in the not past, that did However, a determination need not be right in this in engage it the case case applies made as to which law plainly ignored the mandate conduct coverage not entitled insurance contract. under substantive law. either state’s Each case should be eval and circumstances uated on facts Dakota re South provi whether a determine reasonableness an quires preju insurer show be read into the sion should untimely dice caused notice and notice provided determine whether allegations of just prejudice mere order impos The is not reasonable. Court require prevail. Illinois law does ing timeframe in which notice specific Country See showing prejudice. nor blanket provided imposing should be Marine, Inc., v. Mut. Ins. Co. Livorsi insur provision every reasonableness Ill.2d 856 N.E.2d 305 Ill.Dec. ance fails a notice contract that Co.,& Inc. (2006); Montgomery Ward There no dispute term. between Home Insurance Ill.App.3d parties regarding the facts this case. 999, 1005 257 Ill.Dec. 753 N.E.2d only dispute appears to be how the *8 (2001). However, of based on facts provision notice of the insurance contract actually preju this case Continental facts interpreted. should Under diced; therefore, is same result case, inter and circumstances of this we regardless achieved of which state’s law pret a reasonable impose applied. provision ness into the issued failed give
Continental. UP generally prejudice While 25.] [¶ time written notice within a reasonable fact, question is a of courts have held liability poli after it determined the excess prejudice may ques “the of become a issue impli cies issued would be of if all persons tion reasonable this cated. The circuit court’s decision on the insured did not notice issue conclude is affirmed. Cleaning in a reasonable time.” Interstate Laws of Conflict Corp. Underwriters Ins. v. Commercial Cir.2003) Co., 1024, 325 F.3d 1029 provides 53-1—4 SDCL 22.] Co., Farm Ins. Tresner v. State (citing 913 of law contracts under regarding choice
619 (Mo.1995)). instead, 14 in prejudice; S.W.2d certain the insurer must show “summary judg stances courts have found its actually interests were harmed.1 appropriate path ment to be several eases No matter which followed case, where notice prejudiced. the insured’s breach or Continental has been cooperation clause insurer prevented the points to Crum & 28.] Forster conducting meaningful investigation Co., Ins. v. Employers Co. Ins. Pacific presenting of a claim or a viable defense to support argument that the insurer must Townhomes, a claim.” MacLean v. LLC forth specific set facts to sup- reasons Co., Wash.App. American States 138 Ins. port prejudice its claim rely cannot (2007). 186, 156 278, 280 P.3d allegations on mere prej- or conclusions of (D.S.D.1995). presumed Some courts have F.Supp. udice. 907 case, prejudice as a matter law. Avco In that See United States District Corp. v. Aetna Cas. & Sur. 679 A.2d Court of South Dakota took the position (R.I.1996) (holding insurer was to provide that “failure notice prejudiced coverage as a matter law when at the render void unless the insurer time was given notice the insured had been can actual prejudice.” (citing establish Id. Cos., aware of contamination for two and Reliance Ins. Co. v. St. Paul Ins. (1976)). years, brought one-half settled claims Minn. 239 N.W.2d it, However, against agree into entered consent the court decided the case on the ments with state federal grounds wrongful environmen termination was not protection agencies tal remedi concerning personal injury within the coverage al nothing actions and when remained for Id. general policy. The district the insurer to do pay only but financial and court discussed Pacific’s claim that insured); expense commitments the failure to notice prompt allowed Am., Corp. Olin Insurance Co. defending to avoid the insured in dictum of N. (S.D.N.Y.1991) 76, 79 F.Supp. (concluding and determined that Pacific could not presumption prejudice defending delay was not rebutted avoid based on notifica- undisputed when showed at the tion provide any specif- facts failed to given significant money time notice was ic facts or reasons for the claim of actual already had spent, been consent decrees Id. prejudice. into, physical appearances entered [IT Even Continental were re- Ranch, changed); Buckeye site Inc. v. provide proof quired prejudice, Ins. 134 Ohio Misc.2d Northfield specific it articulated facts reasons (Com.Pl.2005) (untime N.E.2d the claim of actual prejudice and demon- ly notice insurer presumed prejudicial to actually strated that interests were contrary).
without evidence harmed. While UP claims that the Other provided by indemnity courts have held that a is an *9 opportunity investigate mere lack of policy, to UP has certain duties the under claim underlying or involvement the one this lead to believe that is negotiations regulato- indemnity remediation or only with not an issue. In addition loss, ry actual duty proof authorities not amount to to the to notice and of Co., Pennsylvania the Wash.App. Ins. Co. State Asso 918 P.2d (1996); ciated Ins. F.2d Int’l Employer’s Corp., Assur. Ltd. v. Liab. Cir.1991); Aetna & Sur. v. Dow Cas. Co. Corp., Mass.App.Ct. Hoechst Celanese F.Supp.2d Chem. 813-14 (1997). 684 N.E.2d 608-09 Canron, (E.D.Mich.1998); Inc. v. Federal Ins. investigation and portions of the poli- made in Continental’s provision there ais handling assignment impossible. right provides cies which subrogation. provides: what contractor determined 32.] UP the As- may require from Company any cleanup the without perform would re- assignment of all right an sured give input. to opportunity for Continental to the against any party for loss covery fact, Hu- entire remediation the In the by therefor is made payment extent completed prior any to notifi- ron site was may, own they at their Company and the Therefore, to Conti- cation Continental. in the name of and proceed expense, to determine opportunity nental had no of the Insured. behalf the costs with whether associated cleanup appropriate prior & to duty on C were imposes This provision completed cleanup being started any po- to inform Continental NW/UP appro- hired was the whether the contractor has tential loss so that Continental To that this job. for the determine priate right assign- opportunity to exercise its prejudicial to Continental to case, & failed In this C ment. NW/UP ability to hire whomever give insureds duty meet and therefore Continental choose, regardless of whether they actually right been in its prejudiced has justified or whether the contractor cost assignment. job. for the appropriate hired agreed perform After Huron en- Due to UP’s failure inform the remediation of the site EPA, agreement, it es- of the notice tering into the consent Continental opportunity in fact EPA it was did lose Continental sentially stated to negotiations in the between responsibility participate for the contamina- taking dis- EPA. Continental ability tion. lost its Continental NW/UP be abide would therefore left to whatev- pute responsibility for contamination appropriate. terms were investigate whether a er UP decided and to to determine highly Again, prejudicial such as DM & E which this was to Conti- party, third subject could nental. property owned the any responsible have potentially been argues also that Continen- 34.] UP has also portion of the loss. Continental may tal’s assertions that evidence lost to determine opportunity timing lost of the notice been due of the
portion of the resulted outside loss preju- not sufficient to are establish periods. policy coverage true, there are dice. While addition, mere assertions this case. has more than completed to The of the site was opportunity deprived been both being prior be in- notified: opportunity and an investigate excavated, the had been negotiations ponds with the EPA as treatment volved in the removed, soil plumbing and contaminated process. well the remediation While soil, grass opportuni- ponds loss filled clean perhaps the of one these circumstances, alone, prior location of planted ties over under some fact therefore did in prejudice, ponds. de- might not amount to actual ability obtain evidence from lose the opportunities an insurer of all of priving from observation the contaminated soils or preju- created actual become involved *10 ponds original in their condition. just than of the dice. late notice did more UP’s that evi- normal in This is more than an assertion disrupt procedures Continental’s Physical claim, have been lost. evi- handling may dence investigating this dence that or destroyed been beneficial during the time C & NW/UP destroyed, delayed even crucial to providing Continental notice to Continental. causing prejudice to Had Continental Continental’s been notified of the loss & when C NW by If was informed the EPA interests. UP had notified Continental that it would responsible prior time to site the clean- completion of the up, prior or at time merger, cleanup, possible it is that some of this these documents would have been avail- physical evidence could have been pre- exactly able. unclear what informa- served, however, notify UP waited to Con- tion these provided documents would have tinental until after the had been to Continental. Continental believes that Furthermore, completed. mil- the actual the information might have provided some by lions of expended dollars UP on the policy defenses or time frames when project far original exceeded estimates. things any event, occurred. In discarding UP contends that because Con- pertinent relating information to a site tinental investigate refused to on the potential that had for environmental liabili- grounds proven coverage, that UP had not ty least potentially prejudicial is at it cannot prejudiced. show was Howev- insurance company. er, not shown UP has would have [¶ 37.] Continental has shown numer- been response pro- Continental’s had UP ways ous actually which it was preju- proof timely vided notice and loss in by Thus, diced the late notice. under ei- manner. It claims that Continental cannot law, ther South Dakota Illinois UP is prejudice show actual on spec- based mere Therefore, not coverage. entitled to it is attempts ulation but speculate here that necessary not determination be investigated would not have regarding made applies. which state’s law even if it had been notified earlier. Anticipatory Repudiation addition, only not fail provide did proof of as practicable loss soon as 38.] UP that it claims was entitled to required policy, under the it is unclear timely refuse presented from the facts whether ever notice of the loss because Continental had provided proof of loss Continental. repudiated by refusing pay contract This prejudiced ability types Continental’s presented similar of claims to Conti- make a determination as to an past. whether nental UP in the UP is incorrect Furthermore, investigation was interpretation anticipatory needed. of when finally when UP can repudiation notified Continental of the be utilized as a defense. loss, help Continental asked for from UP An anticipatory breach of at five different times. This was an at- a contract or anticipatory repudiation is tempt begin investigation. There “committed before time when there is that, nothing presented has been to show a present duty performance and results case, in this Continental would not have from words or indicating conduct an inten attempted to if it had investigate received performance tion to refuse in the future.” timely notice of the loss in a manner. § Williston Contracts 63:29 Finally, UP has admitted that “A breach caused documents from the ie., former C NW were party’s anticipatory repudiation, un destroyed during merger. equivocally indicating party will claiming due[,] the destruction of perform when performance is intentionally documents was preju- done nonbreaching party allows the to treat However, dice it. repudiation documents were as an immediate breach con- *11 Justice, GILBERTSON, Chief damages. type [¶ 43.] This sue tract and for ZINTER, Justices, anticipatory KONENKAMP and as an known either breach is Weitzel concur. constructive breach.” breach or Partners, 2006 SD Valley Heart
Sioux Justice, MEIERHENRY, [¶ 44.] ¶ (citing Restate- 31, 714 N.W.2d in result. concurs (Second) § 236 cmt. a of Contracts ment (1981)). by an obli- repudiation “Before WALD, Judge, VON Circuit [¶ 45.] obligee perform- gor relieve the will SABERS, Justice, disqualified. Retired obligor’s ing precedent conditions MEIERHENRY, (concurring in Justice indi- unequivocally must performance, it result). party intends not the repudiating cate that obligations under the his or her to honor conference I with the concur [¶ 46.] on Contracts contract.” Williston court’s deci opinion to affirm the circuit § 39:40 failed to sion that UP As to the con notice of its claim. timely Here, argu its UP bases I also affirm question, flict of laws in coverage disputes previous ment Illinois law court’s decision that circuit type pay refused to which Continental applies, Illinois law applies. Since However, asserting. there claim or decide whether Court need not discuss or act in this no overt has been evidence to According prejudiced. Continental was indicating had case that Continental 53-1-4, to be inter contract is “[a] SDCL part its refusing perform intention usage preted according to law ever indi or that Continental contract or, if place performed where it is at time. cated intention UP such place performance, it not indicate a does Instead, deliberately it which was UP according usage place law and of the perform obligation chose to refuse Here, it creat where is made.” fact, once the contract. Conti under companies national did not ed between two steps it took was notified of loss nental performance. As the place indicate a the information and docu try to obtain determined, policy was “[t]he circuit court it to make a determina mentation needed Illinois, Illinois, negotiated signed whether it would regarding tion Illinois, Illinois, delivered in maintained coverage. national, was scope coverage of the Dakota, Anticipatory repudiation applies than to South rather confined issue, determined, previous at deal- damages the contract are pro- base refusal to ings. likely cannot Illi will most be made in payment experiences reason, timely prior notice on its vide law of Illinois For this nois.” insurer. law. rather than South Dakota applies provided UP should have notice Conti- applies, we Because Illinois re- timely in a manner as was nental not determine whether insurer need warranted, if the quired to do and evidence untimely prejudice showed might given, then it have after notice was Ins. Country notice. See Mut. anticipatory under an proceed been able to (no showing N.E.2d at 346 Ill.Dec. repudiation decision de- argument. UP’s Montgomery Ward prejudice required); repudiated termining that had Inc., Ill.Dec. 753 N.E.2d premature. was (“insurer prove an insured’s breach prejudiced Affirmed. *12 the notice in a to be clause order pay”).
relieved of duty SD 69
DAKOTA, MINNESOTA & EASTERN CORPORATION,
RAILROAD Appellant,
Plaintiff and
ACUITY, a Mutual Insurance Co. f/k/a
Heritage Company, Mutual Insurance Heritage Insurance, Defendant
d/b/a Appellee.
Nos. 24904.
Supreme of South Court Dakota. Jan.
Argued 2009. Aug.
Decided