State Auto. Mut. Ins. Co. v. Flexdar, Inc.Annotate this Case
The Indiana Department of Environmental Management (IDEM) informed Flexdar, Inc. that Flexdar would be liable for the costs of cleaning up trichloroethylene (TCE) contamination on a site where Flexdar previously had operations. State Automobile Mutual Insurance Company (State Auto), with whom Flexdar maintained general liability and umbrella insurance policies for the period when the contamination occurred, filed a declaratory judgment action, contending that coverage for the TCE contamination was excluded pursuant to a pollution exclusion in the policies. The trial court entered summary judgment in favor of Flexdar, concluding that the language of State Auto's pollution exclusion was ambiguous and therefore should be construed against State Auto and in favor of coverage. The Supreme Court affirmed, holding that the language of the pollution exclusion at issue was ambiguous, and therefore, in accordance with precedent, the policies were construed in favor of coverage.