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American States Ins. Co. v. Kiger

Supreme Court of Indiana

March 27, 1996, Filed

Supreme Court No. 32S05-9409-CV-836



DeBRULER, Justice.

This case comes before the Court on emergency petition to transfer. Ind. Appellate Rule 4(A)(9). Appellant American States Insurance Company ("American States") appeals from a denial of its motion for summary judgment and a grant of Appellees Vincent [**3]  and Maria Kiger's ("Kiger") cross-motion for summary judgment. The original claim for damages/reimbursement for clean-up costs was brought by appellee the Indiana Department of Environmental Management ("IDEM"). This Court granted transfer in order to address the following issues:

1) whether the pre-1987 insurance policies' clauses which require that the pollution be "sudden and accidental" preclude coverage for leakage from underground gasoline storage tanks; and

2) whether the pollution exclusion clauses of those policies issued in 1987 and after ("post-1987 policies"), which do not specifically list gasoline as a pollutant, preclude coverage for leakage from underground gasoline storage tanks.

On September 17, 1990, several residents of Danville complained to IDEM about petroleum vapors in their homes. At approximately the same time, the Town Manager of Danville informed IDEM that petroleum product had been detected in a portion of the Danville sanitary sewer. IDEM's Emergency Response Branch (ERB) investigated the complaints and determined that portions of Danville's sewer line exceeded safe levels of petroleum. ERB also determined that the source of this contamination [**4]  was an underground storage tank at the Sunoco gas station belonging to Kiger. When Danville repaired a sanitary tile which ran from the tank pit to the sanitary sewer system, the release of gasoline into the sewer system stopped.

Unfortunately, Danville continued to experience problems with petroleum contamination throughout 1991 and 1992. The contamination was invariably traced back to Kiger, and IDEM spent in excess of $ 400,000.00 attempting to clean up the gasoline. Finally, in March 1992, a major leak was discovered at Kiger Sunoco and a sump was installed to recover the petroleum product that was being released into the environment.

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662 N.E.2d 945 *; 1996 Ind. LEXIS 23 **

AMERICAN STATES INSURANCE COMPANY, Appellant (Third-Party Defendant below), v. VINCENT A. KIGER and MARIA L. KIGER d/b/a KIGER'S SUNOCO, Appellees (Third-Party Plaintiffs below) v. COMMISSIONER, INDIANA DEPARTMENT OF ENVIRONMENTAL MANAGEMENT, Plaintiff below.

Subsequent History:  [**1]  Rehearing Denied May 31, 1996.

Prior History: APPEAL FROM THE HENDRICKS CIRCUIT COURT. The Honorable Jeffrey V. Boles, Judge. Cause No. 32C01-9206-CP-184.


gasoline, pollutants, coverage, contamination, policies, insurance policy, ambiguity, insurer, sudden and accidental, summary judgment, Dictionary, pollution exclusion, petroleum, exclude coverage, cases

Insurance Law, Policy Interpretation, Ambiguous Terms, Construction Against Insurers, Claim, Contract & Practice Issues, General Overview, Contracts Law, Defenses, Ambiguities & Mistakes, Exclusions, Pollution, Accidental & Sudden Exception, Contract Interpretation, Ambiguities & Contra Proferentem, Commercial General Liability Insurance, Contractual Liabilities