Judgment affirmed for insurer uninformed of claims

A divided Indiana Court of Appeals affirmed the grant of summary judgment to an insurance company after a client waited more than a decade to notify it had made payments in several suits brought against it.

Franke Plating Works is a metal finishing, plating and coating company that covers parts in zinc and other materials. In its operations, the company generated various hazardous and nonhazardous wastes that were shipped to several waste-handling facilities for disposal.

The company was named a potentially responsible party in actions involving environmental cleanups at three landfill sites located in Fort Wayne, Columbia City and Rochester, as well as a separate citizen suit filed by an environmental nonprofit organization. Franke Plating made contributing payments for cleanup costs in all four cases brought against it, totaling roughly $180,000.  

Franke Plating only sought coverage under a 1987 policy with its insurer, Cincinnati Insurance Company. The policy provides that, “If claim is made or suit is brought against the insured, the insured shall immediately forward to the company every demand, notice, summons or other process received by him or his representative.”

In March 2017, the company sued Cincinnati for declaratory relief and damages, and both cross-filed for summary judgment in 2015. The trial court granted summary judgment in Cincinnati’s favor when it found Franke Plating’s failure to forward notice of the four claims and its payment and settlement of the claims before notifying Cincinnati excused the insurer from any obligations to pay the company settlement costs or interest.

On appeal, Franke Plating contends that the trial court erred in entering summary judgment in favor of Cincinnati. Franke argues the company asserted that it was entitled to indemnity where the first notice given to the insurer occurred no earlier than nine years after it knew of the claims against it.

“We first find that the plain language of Sections 4(a) and 4(b) of the 1987 Policy is clear regarding the provision of notice to Cincinnati by Franke Plating, and unambiguously requires that, in the event of an occurrence, written notice containing particulars shall be given by or for Franke Plating to Cincinnati ‘as soon as practicable’ and that, if a claim is made or suit is brought against Franke Plating, it ‘shall immediately forward to [Cincinnati] every demand, notice, summons or other process received,’” Judge Elaine Brown wrote.

The appellate court further noted that the first record of any claims made against Franke Plating was not given to Cincinnati until 2007. Additionally, Cincinnati was not notified of the remaining suits and claims brought against the company until more than 10 years after Franke Plating had already made payments.

“Accordingly, we cannot say that Franke Plating satisfied the 1987 Policy’s section 4(a) and 4(b) notice provisions,” Brown continued. “We further find that Franke Plating’s delay in giving Cincinnati notice was unreasonable and that prejudice is, therefore, presumed here.”

The appellate court also noted that Franke Plating’s argument for remedies did not overcome the policy’s plain language and concluded the trial court did not err in awarding summary judgment to Cincinnati.

Judge Terry Crone concurred in part and dissented in part in a separate opinion, noting that the trial court should affirm its denial of Franke Plating’s motion, but reverse its award of summary judgement to Cincinnati in Franke Plating Works, Inc. v. The Cincinnati Insurance Company, 49A02-1710-PL-2462.