Cases & Deals

Eaton wins summary judgment in coverage dispute

Clients Eaton Corporation

Jones Day represented Eaton Corporation affiliate Cooper Industries, LLC in connection with its claim for insurance coverage for environmental liabilities arising from a former Studebaker Manufacturing Facility in South Bend, Indiana. After the Indiana Supreme Court determined that Cooper was Studebaker's successor by de facto merger, Cooper filed suit against the entities that insured Studebaker and a number of successor corporations.

Cooper resolved its claims as to most of those insurers; however, it was forced to move for summary judgment against the Continental Insurance Company. Continental filed its own summary judgment motion arguing that Cooper was not entitled to coverage under policies Continental had issued to the Studebaker-Worthington Company asserting that (1) Cooper had breached the policies' notice provision by first tendering the claim six years after the underlying environmental action had been filed; and (2) the anti-assignment clauses in the policies barred Cooper from asserting coverage rights.

The trial court granted Cooper's motion for summary judgment and denied Continental's. The court accepted the arguments advanced by Cooper that the notice provisions did not bar coverage because Continental failed to establish that it was unreasonable to delay noticing the claim until after the Indiana Supreme Court determined Cooper was Studebaker's successor and that, even if the notice was late, Cooper had rebutted any presumption of prejudice attached to the delay. The court further held that the anti-assignment clause did not bar coverage because Cooper obtained Studebaker-Worthington's coverage rights by operation of law. Finally, although the court held that Cooper was not entitled to pre-tender defense costs as damages to its breach of contract claim, the court accepted Cooper's argument that pre-tender defense costs were potentially recoverable as a measure of damages on Cooper's bad faith claim.

After Continental's motion for interlocutory appeal was denied, Cooper reached a settlement agreement with Continental.

Cooper Industries, LLC v. Allstate Insurance Co., No. 49F12-0303-PL-000752 (Super. Ct. Marion Cty., Ind.)

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