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Armstrong Cleaners, Inc. v. Erie Insurance Exchange

364 F. Supp. 2d 797 (2005)

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Armstrong Cleaners, Inc. v. Erie Insurance Exchange

United States District Court for the Southern District of Indiana
364 F. Supp. 2d 797 (2005)

  • Written by Sheryl McGrath, JD

Facts

Erie Insurance Exchange (Erie) (defendant) provided liability insurance to Armstrong Cleaners, Inc. (the Armstrongs) (plaintiffs). The Armstrongs were defendants in a multi-defendant groundwater-contamination lawsuit filed by State Farm. The Armstrongs submitted the lawsuit defense to Erie under their insurance contract. Erie accepted the defense but reserved its rights on four grounds: a blanket reservation of coverage; a reservation based on the policy definition of occurrence; and reservations based on the policy exclusions for pollution and for expected or intended acts. The Armstrongs filed a declaratory-judgment action against Erie seeking a ruling that Erie’s reservations of rights caused a conflict of interest, and that the conflict entitled the Armstrongs to select an independent attorney to be paid by Erie. Both Erie and the Armstrongs filed summary-judgment motions.

Rule of Law

Issue

Holding and Reasoning (Hamilton, J.)

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