Insurer Wins in Clash Over Law Firm for Hazmat Claims

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Amerisure Insurance Co. has the right to determine what law firm should handle environmental claims stemming from contamination at an Indianapolis industrial site, the U.S. District Court for the Southern District of Indiana ruled Dec. 27 ( CMW Int’l, LLC v. Amerisure Ins. Co. , 2016 BL 431322, S.D. Ind., No. 16-cv-01384, 12/27/16 ).

The ruling allows Amerisure to hire a new law firm to handle the contamination claims against its insured, CMW International LLC.

CMW argued that Amerisure waived its right to select a new firm after paying five months of legal bills submitted by CMW’s chosen counsel.

But Amerisure never expressly waived its right to select defense counsel, which “is inherent in the insurer’s right to control the defense,” Judge Tanya Walton Pratt said.

CMW was notified in 2014 by Indiana’s Department of Environmental Management that it was a “responsible person” for contamination identified on an adjacent Indianapolis property occupied by Battery Properties Inc., according to the decision.

Not satisfied with BPI’s cleanup efforts, CMW hired Ice Miller LLP, Indianapolis, as its environmental counsel and sent the bills to Amerisure, which paid them. But the insurer changed the defense team in February, when BPI requested reimbursement for approximately $350,000 in cleanup costs, according to the decision.

That was its right, the court said, noting that the “enforcement of unambiguous contractual terms is equally important as honoring the attorney-client relationship and allowing a client to choose its own counsel.”

U.S. Judge Tanya Walton Pratt wrote the opinion.

Ice Miller LLP represented CMW International LLC.

Goodin Abernathy represented Amerisure Insurance Co.

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