Visteon Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh
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Court: U.S. Court of Appeals for the Seventh Circuit Docket: 14-2725
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Opinion Date:
January 23, 2015
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Areas of Law: Civil Procedure, Environmental Law, Insurance Law
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Visteon, a worldwide manufacturer headquartered in Michigan,
sued National Union, from which it had purchased liability insurance between
2000 and 2002.
The policy excluded liability resulting from pollution caused by
Visteon, except liability arising from a “Completed Operations Hazard.”
In
2001, the toxic solvent TCE that was used to clean machinery in Visteon’s
Connersville, Indiana plant was discovered to have leaked into the soil and
groundwater. Neighboring landowners sued Visteon.
National Union has refused to
indemnify or defend. Indiana does not enforce standard pollution-exclusion
clauses. Michigan law does enforce the more general kind of pollution-exclusion
clause found in the policy.
The district court ruled that Michigan law governed
and held that Visteon was not entitled to coverage under the Completed
Operations Hazard clause. The Seventh Circuit affirmed.
The risk materialized
in Indiana, but that could not have been foreseen. The Indiana victims were
compensated by Visteon, and it is unclear what benefit the state would have
derived from reimbursement of Visteon’s costs by National Union.”
The court
rejected Visteon’s argument that its “work” was “completed” each time a
contract to supply products made at the plant was performed and concluded that
the exception did not apply.