Red Arrow Products Co. v. Employers Insurance of Wausau

No. 98-3628 (607 N.W.2d 294) (Wis. Ct. App. January 19, 2000)

The court holds that an insurer need not indemnify or defend a food flavoring company under insurance policies issued to the company's predecessor for claims arising out of the company's liability at a national priorities list site. The court first declines the company's request to utilize the fairly debatable standard, which imposes a duty to defend on the insurer if coverage is fairly debatable. The court then holds that the company is not covered under the policies because it was not a named insured and was never assigned the insurance polices under its sales agreement with the predecessor. The company did not come into existence until after its predecessor purchased the policies, nor did the company bargain for the insurance policies or pay the premiums. The court additionally holds that the benefits of the insurance policies were not transferred to the company by operation of law. Wisconsin has explicitly rejected the product-line successor liability rule, and the company's argument that the insurance benefits follow liability has been rejected in several cases.

The full text of this opinion is available from ELR (8 pp., ELR Order No. L-154).

Counsel for Plaintiff
Gary L. Bendix
Savage, Gregorski, Webster, Stangel, Bendix & Bruce
1028 S. 9th St., Manitowoc WI 54220
(920) 682-8181

Counsel for Defendant
Michael J. Cohen
Meissner, Tierney, Fisher & Nichols
The Milwaukee Center
111 E. Kilbourn Ave., 19th Fl., Milwaukee WI 53202
(414) 273-1300

[30 ELR 20274]

[NO TEXT IN ORIGINAL]