Indiana Court of Appeals Reverses Trial Court and Rules in Favor of Technicolor on Coverage Issues for Underlying Toxic Tort Action in Taiwan
On July 2, 2024, the Indiana Court of Appeals issued a memorandum decision in favor of PSRB’s longtime client Technicolor (now known as Vantiva). PSRB attorneys Sean Hirschten and George Plews did the appellate briefing, and Ryan Leagre contributed to the trial court briefing. The Court of Appeals held that insurer XL has a duty to defend Technicolor’s Taiwan subsidiary in underlying toxic-tort lawsuits in Taiwan. The trial court had ruled that XL only had a duty to defend the named insured, Technicolor’s US subsidiary, in the Taiwan proceedings. The Court of Appeals reversed the trial court because in 2014 it held in Thomson Inc. v. Ins. Co., 11 N.E.3d 982 (Ind. Ct. App. 2014) that the Taiwan subsidiary was insured under XL’s umbrella policies for a prior underlying action. The Court of Appeals held that the trial court should have given Thomson preclusive effect under the doctrine of res judicata.
Since the US subsidiary was dismissed from the underlying mass tort action in Taiwan early in the case, Technicolor’s recovery against XL was for less than $200,000 under the trial court’s ruling. The Court of Appeals remanded the case for a new evidentiary hearing on XL’s liability for Technicolor’s defense costs in light of XL’s duty to defend the Taiwan subsidiary in the underlying action, which remains pending in Taiwan.
The Court of Appeals also held that XL could not split its defense costs between 3 policies it sold that have self-insured retentions and 3 that have deductibles. In other words, XL cannot use deductibles and SIRs in multiple policies to reduce its obligation to pay defense costs owed under a single policy. This holding reaffirms that in Indiana the duty to defend is joint and several, and that even a single-year insurance policy can afford a duty to defend claims spanning decades. This is a strong decision in favor of policyholders, the rule of law, and common-sense interpretations of policy language.
Read the Court’s Memorandum Decision.
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Tagged In: Indiana, insurance coverage, litigation, toxic tort