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March 9, 2012   PSRB Scores an Insurance Win Under Maryland Law
By Plews Shadley Racher & Braun LLP
PDF of PSRB Scores an Insurance Win Under Maryland Law (58k PDF file)

In Standard Fusee Corporation v. GAN North American Insurance Company, et al., Cause No. 49D14-0512-PL-048895 (Marion County Sup. Ct.), PSRB recently obtained a summary judgment for Standard Fusee declaring that the remaining primary level insurers in the case – GAN and Chubb – had, and have, a duty to defend against environmental liability actions in California and Indiana under Maryland law.  In 2008 Standard Fusee won a summary judgment in the same court declaring the insurers’ duty to defend under Indiana law.  On appeal, the Indiana Supreme Court ultimately determined that the case should have been decided under the law of Maryland, and the case was remanded to the trial court for further proceedings.   Standard Fusee filed its motion for summary judgment under Maryland law in September 2011.   In its February 23, 2012 Order, the trial court (the Honorable S.K. Reid presiding) found that, under Maryland law (like the law in Indiana) insurers have a duty to defend if there is any potential for coverage under the policies.   Under Maryland law, the court found that the pollution exclusion in comprehensive general liability insurance policies only applies in cases of “traditional” environmental pollution, and that, because perchlorate – the substance at issue – was a naturally occurring element, an essential ingredient in the manufacture of Standard Fusee’s products, and was used legally and intentionally in the making of those products in the normal course of business, the accidental release of perchlorate from Standard Fusee’s operations was not “traditional” environmental pollution.   Thus, the court concluded that “there is, at the very least, the potential for coverage for Standard Fusee’s claims” under both the property damage and personal injury (trespass) coverages in the policies, thus triggering the insurers’ duty to defend.   The court also ruled that Standard Fusee was entitled to recover its attorneys’ fees in prosecuting the action against the insurers, consistent with Maryland law allowing for the recovery of fees by policyholders in such cases.

The PSRB lawyers representing Standard Fusee in this phase of the litigation included Jeff Claflin, Greg Gotwald, Theresa Willard and Katie Schumann.  

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