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Freidline v. Shelby Ins. Co.

ELR Citation: 31 ELR 20308
Nos. No. 71A03-0004-CV-132, 739 N.E.2d 178/(Ind. Ct. App., 11/29/2000)

The court holds that an insurance company must defend and indemnify building owners who were sued by telemarketers who worked in the building and were injured from exposure to fumes from carpet glue used to recarpet the building. The court first holds that the pollution exclusion found in the policy is ambiguous and, thus, should have been construed in favor of the building owners. The telemarketers did not simply complain that they were injured by fumes, but that they were injured by the fumes coming from the substances used to install the carpet. While the policy's definition of pollutants includes the term "fumes," it does not include carpet glue or any other substance used to install carpet. Moreover, as determined in prior case law, the policy cannot be read literally as it would negate virtually all coverage. The court next holds that the insurance company acted in bad faith in refusing to defend and indemnify the building owners. The insurance company's counsel was aware of the applicable case law, but the company still refused to indemnify or defend the building owners in this action. A trial court, therefore, erred in granting summary judgment in favor of the insurance company.

The full text of this opinion is available from ELR (6 pp., ELR Order No. L-305).

Counsel for Appellants
Fred R. Hains
Fred R. Hains & Associates
125 N. St. Peter St., South Bend IN 46617
(219) 234-7606

Counsel for Appellee
Daniel W. Glavin
Beckman, Kelly & Smith
5920 Hohman Ave., Hammond IN 46320
(219) 933-6200