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An insurance company is not contractually required to cover losses related to a class-action lawsuit filed in Taiwan, the Court of Appeals of Indiana affirmed Tuesday.
On May 9, 2016, a group of more than 1,000 former workers at factories in Taiwan sued a group known in court documents as the “Technicolor entities” in Taiwan for injuries suffered allegedly due to exposure to chlorinated solvents at those factories and in adjacent dormitories. Those entities included Technicolor USA Inc., Technicolor S.A., Thomson Consumer Electronics Television Taiwan Limited and Thomson Consumer Electronics Bermuda Limited.
The case was the second such mass toxic tort action against Technicolor in Taiwan, with the first lawsuit brought in 2004.
Technicolor USA was voluntarily dismissed from the action.
The Taiwan District Court held Thomson Consumers Electronics Television liable for its own torts while Thomson Consumer Electronics Bermuda and Technicolor S.A. were held vicariously liable as controlling companies under Taiwanese law, as it had done in the first Taiwan class action lawsuit.
AXA Insurance Company refused to defend the Technicolor entities under the terms of its policies.
In response, the entities filed a complaint for damages and declaratory relief in Marion Superior Commercial Court seeking a determination of their rights under comprehensive general liability policies, both primary and umbrella, sold by various insurers, including AXA. The instant appeal addressed only the Technicolor entities’ request for coverage under AXA’s policies.
AXA issued five primary policies and five umbrella policies to Thomson, Inc./Technicolor USA, beginning in 2009 and continuing through 2013. In its primary policies, AXA agreed to “pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ … to which this insurance applies.”
The parties moved and cross-moved for summary judgment.
The trial court ultimately determined that AXA owed no duty to defend under its primary and umbrella policies, as the claims were based on events that occurred outside the policies’ coverage territory limits.
The Technicolor entities moved to revise the order dealing with the AXA umbrella policies, while AXA asked the court to confirm its holdings and moved for summary judgment on the issue of its “duty to indemnify Technicolor under AXA Policies for damages incurred in the [Second Taiwan Class Action.]”
Technicolor counter-moved for summary judgment.
The trial court denied the Technicolor entities’ motion to revise but granted AXA’s motion for summary judgment. It also denied the Technicolor entities’ cross-motion for summary judgment.
The Technicolor entities appealed and argued that the trial court incorrectly determined the claims alleged in the second Taiwan class-action lawsuit fall outside the “coverage territory,” and that the trial court incorrectly concluded there was no coverage pursuant to the following form endorsements of the AXA umbrella policies.
Affirming, the Court of Appeals concluded the AXA primary policies do not provide underlying insurance for the damages alleged in the second Taiwan class-action lawsuit.
Senior Judge John Baker wrote the opinion for the appellate court.
Baker noted AXA’s primary policies explicitly provide coverage and take on a duty to defend in the “coverage territory,” which is defined as the United States, Puerto Rico and Canada.
“The Second Taiwan Class Action sought damages for bodily injuries allegedly incurred by the employees’ exposure to chlorinated solvents at the Technicolor Entities’ factories and in adjacent dormitories in Taiwan,” Baker wrote. “And the Technicolor Entities’ liability was determined in a suit brought in Taiwan, a country not covered under the AXA Primary Policies’ ‘coverage territory’ definition.”
The appellate court also disagreed with the Technicolor entities’ argument that the following form endorsements of the AXA umbrella policies provided coverage for the second Taiwan class-action lawsuit.
“Because we have determined there is no valid and collectible underlying insurance available under the AXA Primary Policies, there is no coverage available under the Following Form Endorsements of the AXA Umbrella Policies,” Baker wrote.
Judges L. Mark Bailey and Terry Crone concurred.
The case is Technicolor USA, Inc.; Technicolor S.A.; Thomson Consumer Electronics Television Taiwan Limited; and Thomson Consumer Electronics Bermuda Limited v. Insurance Company of North America, et.al., 22A-PL-2094.
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