Court Opinion

ID: 9897308
Source: CourtListenerOpinion
Date Created: 2023-11-14 19:09:58.180162+00
Date Added: 2024-06-11T09:14:05.496125
License: Public Domain

FILED
                                                                             Aug 22 2023, 8:52 am

                                                                                   CLERK
                                                                              Indiana Supreme Court
                                                                                 Court of Appeals
                                                                                   and Tax Court

ATTORNEYS FOR APPELLANTS                                   ATTORNEYS FOR APPELLEE
George M. Plews                                            AXA INSURANCE COMPANY
Sean M. Hirschten                                          Thomas B. Bays
Plews Shadley Racher & Braun, LLP                          Scott A. Harkness
Indianapolis, Indiana                                      Norris Choplin Schroeder, LLP
                                                           Indianapolis, Indiana

                                                           ATTORNEY FOR INTERESTED
                                                           PARTY ALLIANZ GLOBAL
                                                           INSURANCE COMPANY
                                                           Lyndsay I. Ignasiak
                                                           Katherine M. Haire
                                                           Reminger Co., LPA
                                                           Indianapolis, Indiana

                                                           ATTORNEYS FOR INTERESTED
                                                           PARTIES ZURICH AMERICAN
                                                           INSURANCE COMPANY AND
                                                           AMERICAN GUARANTEE AND
                                                           LIABILITY INSURANCE
                                                           COMPANY
                                                           Kyle A. Lansberry
                                                           Michael R. Giordano
                                                           Antonia B. Ianniello
                                                           Jeremy Glen
                                                           Lewis Wagner, LLP
                                                           Indianapolis, Indiana

                                                           ATTORNEYS FOR INTERESTED
                                                           PARTY XL INSURANCE OF
                                                           AMERICA
                                                           Bradford S. Moyer
                                                           John P. Eggum
                                                           Plunkett Cooney, P.C.

Court of Appeals of Indiana | Opinion 22A-PL-2094 | August 22, 2023                           Page 1 of 17
                                                           Indianapolis, Indiana

                                            IN THE
    COURT OF APPEALS OF INDIANA

Technicolor USA, Inc.;                                     August 22, 2023
Technicolor S.A.; Thomson
                                                           Court of Appeals Case No.
Consumer Electronics Television
                                                           22A-PL-2094
Taiwan Limited; and Thomson
Consumer Electronics Bermuda                               Appeal from the
Limited,                                                   Marion Superior Court
Appellants-Plaintiffs,
                                                           The Honorable
                                                           Heather A. Welch, Judge
        v.
                                                           Trial Court Cause No.
Insurance Company of North                                 49D01-1810-PL-40578
America; Indemnity Insurance
Company of North America; XL
Insurance America, Inc. f/k/a
Winterthur International
America Insurance Company;
American Guarantee and
Liability Insurance Company;
CIGNA Insurance Company
n/k/a ACE American Insurance
Company; CIGNA Property &
Casualty n/k/a ACE Property &
Casualty Insurance Group;
Zurich American Insurance
Company; AXA Insurance
Company; Allianz Global
Insurance Company,
Appellees-Defendants.

Court of Appeals of Indiana | Opinion 22A-PL-2094 | August 22, 2023                    Page 2 of 17
                                     Opinion by Senior Judge Baker
                                     Judges Bailey and Crone concur.

      Baker, Senior Judge.

      Statement of the Case
[1]   Technicolor USA, Inc., Technicolor S.A., Thomson Consumer Electronics

      Television Taiwan Limited (TCETVT), and Thomson Consumer Electronics

      Bermuda Limited (TCEB) (collectively, the Technicolor Entities), appeal from

      the trial court’s order denying the Technicolor Entities’ cross-motion for

      summary judgment, granting summary judgment in favor of AXA Insurance

      Company (AXA), and entering final judgment on the issue of AXA’s duty to

      defend and indemnify the Technicolor Entities under the AXA Primary and

      Umbrella Policies for potential damages arising out of the Second Taiwan Class

      Action filed against them in Taiwan. The Technicolor Entities claimed the

      insurance companies were contractually required to cover their losses related to

      that lawsuit and sought declaratory relief to determine the coverage issues. We

      affirm.

      Issue
[2]   The Technicolor Entities argue the court incorrectly: (1) determined that the

      claims alleged in the Second Taiwan Class Action fall outside the “coverage

      territory” as defined by the AXA Primary Policies, precluding coverage and a

      duty to defend; and (2) concluded there was no coverage pursuant to the

      Following Form Endorsements of the AXA Umbrella Policies. We restate the

      Court of Appeals of Indiana | Opinion 22A-PL-2094 | August 22, 2023      Page 3 of 17
      dispositive issue as follows: Do the AXA Primary Policies provide underlying

      insurance for the damages alleged in the Second Taiwan Class Action such that

      AXA has a duty to defend the Technicolor Entities pursuant to any of its

      policies? We conclude the AXA Primary Policies do not, and affirm the trial

      court’s judgment.

      Facts and Procedural History                           1

[3]   On May 9, 2016, a group of over 1,000 former workers at factories in Taiwan

      sued the Technicolor Entities in Taiwan (the Second Taiwan Class Action) for

      injuries suffered allegedly due to exposure to chlorinated solvents at those

      factories and in adjacent dormitories. Technicolor USA was voluntarily

      dismissed from the action. The Taiwan District Court held TCETVT liable for

      its own torts, and held TCEB and Technicolor S.A. vicariously liable as

      controlling companies under Taiwanese law, as it had done in the First Taiwan
                        2
      Class Action.

[4]   AXA refused to defend the Technicolor Entities under the terms of its policies.

      In response, the Technicolor Entities filed a complaint for damages and

      declaratory relief in Marion Superior Commercial Court on October 9, 2018,

      seeking a determination of their rights under comprehensive general liability

      1
        Oral argument was held in the Indiana Court of Appeals Courtroom on July 21, 2023. We thank counsel
      for the quality of their written and oral advocacy.
      2
       Insurance coverage issues with respect to the First Taiwan Class Action were addressed by this Court in
      Thomson Inc., v. Insurance Co. of North America, 11 N.E.3d 982 (Ind. Ct. App. 2014), trans. denied.

      Court of Appeals of Indiana | Opinion 22A-PL-2094 | August 22, 2023                             Page 4 of 17
      policies, both primary and umbrella, sold by various insurers, including AXA.

      This appeal addresses only the Technicolor Entities’ request for coverage under

      AXA’s policies.

[5]   AXA issued five Primary Policies and five Umbrella Policies to Thomson,
                                     3
      Inc./Technicolor USA, beginning in 2009 and continuing through 2013.

[6]   In its Primary Policies, AXA agreed to “pay those sums that the insured

      becomes legally obligated to pay as damages because of ‘bodily injury’ . . . to

      which this insurance applies.” Appellants’ App. Vol. II, p. 114. The policies

      stated that AXA “will have the right and duty to defend the insured against any

      ‘suit’ seeking those damages.” Id. But AXA “will have no duty to defend the

      insured against any ‘suit’ seeking damages for ‘bodily injury’ . . . to which this

      insurance does not apply.” Id. The “insurance applies to ‘bodily injury” . . .

      only if (1) The ‘bodily injury’ . . . is caused by an ‘occurrence’ that takes place in

      the ‘coverage territory.’” Id.

[7]   The AXA Primary Policies define coverage territory in pertinent part as

      follows:

              a.    The United States of America (including its territories and
              possessions), Puerto Rico and Canada;
              b.    International waters or airspace, but only if the injury or

      3
       Thomson, Inc. changed its name to Technicolor USA, Inc. in 2010 during the term of its insurance policies
      with AXA.

      Court of Appeals of Indiana | Opinion 22A-PL-2094 | August 22, 2023                           Page 5 of 17
              damage occurs in the course of travel or transportation between
              any places included in Paragraph a. above; or
              c.     All other parts of the world if the injury or damage arises
              out of:
              (1) Goods or products made or sold by you in the territory
              described in Paragraph a. above;
              (2) The activities of a person whose home is in the territory
              described in Paragraph a. above, but is away for a short time on
              your business; or
              (3) “Person and advertising injury” offenses that take place
              through the Internet or similar electronic means of
              communication
              Provided the insured’s responsibility to pay damages is
              determined in a “suit” on the merits, in the territory described in
              Paragraph a. above or in a settlement we agree to.

      Id. at 126.

[8]   The AXA Umbrella Policies each say that, “Any additional insured under any

      policy of ‘underlying insurance’ will automatically be an insured under this

      insurance.” Id. at 173. Because Technicolor S.A., TCEB, and TCETVT are

      insureds under AXA’s Primary Policies, they are insureds under the AXA

      Umbrella Policies.

[9]   AXA’s Umbrella Policies define “coverage territory” as:

              a. The United States of America (including its territories and
              possessions), Puerto Rico and Canada;
              b. International waters or airspace, but only if the injury or
              damage occurs in the course of travel or transportation between
              any places included in Paragraph a. above; or
              c. All other parts of the world if the injury or damage arises out

      Court of Appeals of Indiana | Opinion 22A-PL-2094 | August 22, 2023           Page 6 of 17
               of:
               (1) Goods or products made or sold by you in the territory
               described in a. above.
               (2) The activities of a person whose home is in the territory
               described in a. above, but is away for a short time on your
               business;
               (3) “personal and advertising injury” offenses that take place
               through the Internet or similar electronic means of
               communication;
               Provided the insured’s responsibility to pay damages is
               determined in a suit on the merits, in the territory described in a.
               above or in a settlement we agree to.

       Id. at 126.

[10]   The 2009 AXA Umbrella Policy contains this following form endorsement

       language:

               It is agreed that this policy shall not apply to any liability for
               Bodily Injury and/or Personal and Advertising Injury or
               Property Damage for the following, unless such liability is covered by
               valid and collectible Underlying Insurance as described in the Schedule of
               Underlying Insurance, and then only for such hazards for which
               coverage is afforded under said Underlying Insurance.

               1.       Premises Liability
               2.       Products/Completed Operations Liability
               3.       Contractual Liability
               4.       Employers Liability
               5.       Automobile Liability

       Appellants’ App. Vol. VIII, p. 105 (emphasis added).

       Court of Appeals of Indiana | Opinion 22A-PL-2094 | August 22, 2023             Page 7 of 17
[11]   The remaining four AXA Umbrella Policies contain this Following Form

       Endorsement language:

                 It is agreed that this policy shall not apply to any liability for
                 Bodily Injury and/or Personal and Advertising Injury or
                 Property Damage for the following, unless such liability is covered by
                 valid and collectible Underlying Insurance as described in the Schedule of
                 Underlying Insurance, and then only for such hazards for which
                 coverage is afforded under said Underlying Insurance:

                 1.    Commercial General Liability Coverage: Coverage A—
                 Bodily Injury and Property Damage Liability & Coverage B—
                 Personal and Advertising Injury Liability
                 2.    Automobile Liability Coverage
                 3.    Employers Liability Coverage

       Id. at 105-06 (emphasis added).

[12]   The parties moved and cross-moved for summary judgment. The court’s July

       19, 2021 order resolving these issues resulted in a determination that AXA

       owed no duty to defend under its primary and umbrella policies as the claims

       were based on events that occurred outside the policies’ coverage territory
                 4
       limits.

       4
        The court’s ruling included decisions regarding the other insurers; however those rulings are not properly
       before this Court because they have not been reduced to a final, appealable judgment. During oral argument
       however, the Court was informed by counsel for XL Insurance America, Inc. that they have filed a notice of
       appeal from the trial court’s separate final, appealable order as to them.

       Court of Appeals of Indiana | Opinion 22A-PL-2094 | August 22, 2023                            Page 8 of 17
[13]   The Technicolor Entities disagreed with the court’s rationale and filed a Motion

       To Revise the July 19, 2021 Order Dealing with the AXA Umbrella Policies.

       Technicolor disputed the court’s holding that “the Following Form

       Endorsements in the Umbrella Policies extended a duty to defend only claims

       that were also covered under the AXA Primary Policies based on the plain

       language of the Following Form Endorsements.” Appellants’ App. Vol. II, p.

       83. AXA asked the court to confirm its holdings and moved for summary

       judgment on the issue of its “duty to indemnify Technicolor under AXA

       Policies for damages incurred in the [Second Taiwan Class Action.]” Id.

       Technicolor counter moved for summary judgment. Id.

[14]   The Technicolor Entities argued that the court (1) improperly incorporated the

       AXA Primary Policy “coverage territory” language when interpreting the AXA

       Umbrella Policies; (2) improperly omitted the “for the following” phrase in its

       interpretation of the Following Form Endorsements; (3) failed to distinguish

       “liability” from “hazard” in the Following Form Endorsements; and (4) failed

       to apply proper insurance canons when making the umbrella coverage

       determination. Id. at 85-97. The court denied the Technicolor Entities’ motion

       to revise. The court also granted AXA’s motion for summary judgment and

       denied the Technicolor Entities’ cross motion for summary judgment. This

       appeal ensued.

       Court of Appeals of Indiana | Opinion 22A-PL-2094 | August 22, 2023     Page 9 of 17
      Discussion and Decision                         5

      Summary Judgment Standard of Review
[1]   When reviewing a trial court’s grant of a motion for summary judgment, our

      standard of review is similar to that of the trial court. Stabosz v. Friedman, 199

      N.E.3d 800, 807 (Ind. Ct. App. 2022) (quoting Burris v. Bottoms Up Scuba-Indy,

      LLC, 181 N.E.3d 998, 1003-04 (Ind. Ct. App. 2021)), trans. denied. “Summary

      judgment is appropriate only where the moving party has shown that there is no

      genuine issue of material fact and that it is entitled to judgment as a matter of

      law.” Id. at 807. “All factual inferences must be construed in favor of the non-

      moving party, and all doubts as to the existence of a material issue must be

      resolved against the moving party.” Id. “Summary judgment is a high bar for

      the moving party to clear in Indiana.” Id.

[2]   “We will not reweigh the evidence but will liberally construe all designated

      material in the light most favorable to the nonmoving party to determine

      whether there is a genuine issue of material fact for trial.” Id. (quoting Perkins v.

      Fillio, 119 N.E.3d 1106, 1110-11 (Ind. Ct. App. 2019)). “The party who lost at

      the trial court has the burden to persuade the appellate court that the trial court

      5
        The Technicolor Entities also raised arguments under the AXA Policies’ Controlling Interest
      Endorsements, Named Insured Endorsements, and asserted that the “settlement we agree to” language was
      an independent basis for coverage. We need not address those arguments as they do not affect or alter our
      decision. Although the Controlling Interest Endorsement initially was a basis for the court’s July 19, 2019
      order as to AXA, it was not one of the bases set out in the court’s August 3, 2022, final, appealable order on
      the Technicolor Entities’ Motion to Revise.

      Court of Appeals of Indiana | Opinion 22A-PL-2094 | August 22, 2023                               Page 10 of 17
      erred.” Id. “A trial court’s grant of summary judgment is clothed with a

      presumption of validity.” Id. And “[a] grant of summary judgment may be

      affirmed by any theory supported by the designated materials.” Id.

      Contract Interpretation
[3]   “Interpretation of an insurance policy presents a question of law that is

      particularly suitable for summary judgment.” State Auto. Mut. Ins. Co. v. Flexdar,

      Inc., 964 N.E.2d 845, 848 (Ind. 2012). “Clear and unambiguous language in

      insurance policy contracts, like other contracts, should be given its plain and

      ordinary meaning.” Cinergy Corp. v. Associated Elec. & Gas Ins. Servs., Ltd., 865

      N.E.2d 571, 574 (Ind. 2007). “Policy terms are interpreted from the perspective

      of an ordinary policyholder of average intelligence. If reasonably intelligent

      persons may honestly differ as to the meaning of the policy language, the policy

      is ambiguous.” Gasser v. Downing, 967 N.E.2d 1085, 1087 (Ind. Ct. App. 2012)

      (citation omitted). “However, an ambiguity does not exist merely because the

      parties proffer differing interpretations of the policy language.” Buckeye State

      Mut. Ins. Co. v. Carfield, 914 N.E.2d 315, 318 (Ind. Ct. App. 2009), trans. denied

      (2010).

[4]   “Under Indiana law, insurance policies must be construed so as to effectuate

      indemnification to the insured or the beneficiary.” Am. Econ. Ins. Co. v. Liggett,

      426 N.E.2d 136, 144 (Ind. Ct. App. 1981). “Where any reasonable

      construction can be placed on a policy that will prevent the defeat of the

      insured's indemnification for a loss covered by general language, that

      Court of Appeals of Indiana | Opinion 22A-PL-2094 | August 22, 2023       Page 11 of 17
      construction will be given.” Id. However, “[w]e construe the policy as a whole

      and consider all of the provisions of the contract and not just the individual

      words, phrases or paragraphs.” Nat’l Mut. Ins. Co. v. Curtis, 867 N.E.2d 631, 634

      (Ind. Ct. App. 2007). “We must accept an interpretation of the contract

      language that harmonizes the provisions, rather than one that supports

      conflicting versions of the provisions.” Id. And we “should construe the

      language of a contract so as not to render any words, phrases, or terms

      ineffective or meaningless.” Hammerstone v. Indiana Ins. Co., 986 N.E.2d 841,

      846 (Ind. Ct. App. 2013). “[T]he power to interpret contracts does not extend

      to changing their terms and we will not give insurance policies an unreasonable

      construction to provide additional coverage.” Curtis, 867 N.E.2d at 634.

      I. Coverage under the AXA Primary Policy
[5]   The Technicolor Entities’ arguments to the trial court in support of its position

      that coverage exists included: (1) the “settlement we agree to” language

      recognizes the possibility of coverage, regardless of the limits set by the

      definition of coverage territory; and, (2) contrary to the court’s prior decision,

      Technicolor had satisfied subsections (c)(1) and (c)(2) of the coverage territory

      definitions in AXA’s Primary and Umbrella Policies.

[6]   Starting with their second argument, we observe that, in pertinent part, AXA’s

      Primary Policies explicitly provide coverage and take on a duty to defend the

      Technicolor Entities in suits where the Technicolor Entities become legally

      obligated to pay damages because of bodily injury caused by an occurrence that

      Court of Appeals of Indiana | Opinion 22A-PL-2094 | August 22, 2023       Page 12 of 17
      takes place in the “coverage territory.” Appellants’ App. Vol. II, p. 126.

      “Coverage Territory,” as defined in those AXA Primary Policies, begins with

      the United States (including its territories and possessions), Puerto Rico, and

      Canada.

[7]   The Second Taiwan Class Action sought damages for bodily injuries allegedly

      incurred by the employees’ exposure to chlorinated solvents at the Technicolor

      Entities’ factories and in adjacent dormitories in Taiwan. And the Technicolor

      Entities’ liability was determined in a suit brought in Taiwan, a country not

      covered under the AXA Primary Policies’ “coverage territory” definition.

      There is no coverage under subsection (a) of the coverage territory definition

      under the plain meaning of the AXA Primary Policies’ language.

[8]   The only other subsection, which was argued to the trial court, was subsection

      (c), defining “coverage territory” as,

              c.     All other parts of the world if the injury or damage arises
              out of:
              (1) Goods or products made or sold by you in the territory
              described in Paragraph a. above;
              (2) The activities of a person whose home is in the territory
              described in Paragraph a. above, but is away for a short time on
              your business; or
              (3) “Personal and advertising injury” offenses that take place
              through the Internet or similar electronic means of
              communication
              Provided the insured’s responsibility to pay damages is
              determined in a “suit” on the merits, in the territory described in
              Paragraph a. above or in a settlement we agree to.

      Court of Appeals of Indiana | Opinion 22A-PL-2094 | August 22, 2023       Page 13 of 17
       Appellants’ App. Vol. II, p. 126. And of subsection (c)’s subsections, only

       subsections (1) and (2) are under consideration here.

[9]    By the explicit terms of AXA’s Primary Policies’ language, the Second Taiwan

       Class Action claims are not covered by either of those subsections. First, under

       subsection (c)(1), the alleged injuries did not arise out of goods or products

       made or sold in the United States (including its territories and possessions),

       Puerto Rico, and Canada, because the injuries suffered were allegedly due to

       exposure to chlorinated solvents used in the manufacturing process at those

       factories and in adjacent dormitories in Taiwan. Nor did the injuries arise out

       of a finished good or product that was subsequently sold in the United States,

       Puerto Rico, or Canada.

[10]   The Technicolor Entities claim that the underlying injury was caused in part by

       the alleged concealment of contamination at the factories in the groundwater

       wells in Taiwan under subsection (c)(2). The Technicolor Entities asserted that

       the existence of the contamination was described in a report commissioned by

       GE and Thomson Consumer Electronics, Inc., and completed in part by

       Technicolor USA employee Richard Dyer. Dyer, a U.S. resident, visited

       Taiwan as part of his job responsibilities. The Technicolor Entities argue that

       subsection (c)(2) was met by designation of that evidence.

[11]   However, the court found that Dyer’s involvement in completing the report in

       Taiwan occurred after the environmental contamination was revealed to the

       public. The court held it would be incongruent to accept the Taiwan District

       Court of Appeals of Indiana | Opinion 22A-PL-2094 | August 22, 2023      Page 14 of 17
       Court’s conclusion that Technicolor USA was excused from liability, but to

       disregard that holding and find that its agent could provide the basis for

       coordinating the harms for which Technicolor S.A., TCETVT, or TCEB were

       found liable. Consequently, the Technicolor Entities have failed to show that

       claims arose out of Dyer’s activities in Taiwan, and more importantly, that as a

       Technicolor USA employee, his actions could provide the basis for the

       Technicolor Entities’ liability, where Technicolor USA had been dismissed

       from the Second Taiwan Class Action. There is no coverage under subsection

       (c)(2).

[12]   We need not reach the Technicolor Entities’ first argument regarding the

       settlement language at the end of the definition of coverage territory. The

       Technicolor Entities have not designated evidence showing the existence of

       coverage under (c)’s subsections. And the settlement language is not drafted as

       a separate subsection. Rather, it, along with the requirement that the insured’s

       responsibility to pay damages is determined in a suit on the merits in the United

       States, Puerto Rico, or Canada, comes into play only after the requirements of

       subsection (a), (b), (c)(1), (c)(2), or (c)(3) first have been established.

[13]   There simply is no coverage for the Second Taiwan Class Action claims under

       the AXA Primary Policies. And this determination informs the rest of our

       analysis.

       Court of Appeals of Indiana | Opinion 22A-PL-2094 | August 22, 2023           Page 15 of 17
       Coverage under the AXA Umbrella Policies
[14]   The Technicolor Entities argue that the Following Form Endorsements of the

       AXA Umbrella Policies provide coverage for the Second Taiwan Class Action

       claims. We disagree.

[15]   The AXA Umbrella Policies’ Following Form Endorsements contain language

       stating that the policy “shall not apply to any liability for Bodily Injury and/or

       Personal And Advertising Injury or Property Damage for the following, unless

       such liability is covered by valid and collectible Underlying Insurance as

       described in the Schedule of Underlying Insurance . . . .” Id. at 105.

[16]   The Technicolor Entities presented several arguments to the trial court in favor

       of its interpretation that coverage exists under the AXA Umbrella Policies and

       reiterate them on appeal. One of the arguments was that the general language

       of the Following Form Endorsement does not override the more specific

       language of the AXA Umbrella Policies, such as the definition of “coverage

       territory.” Another argument was that the AXA Primary Policies’ narrower

       definition of “coverage territory” was not incorporated in the AXA Umbrella

       Policies, and, therefore, is inapplicable.

[17]   However, looking at the plain language of the policies, there first must be valid

       and collectible underlying insurance for the AXA Umbrella Policy language to

       apply before analyzing the interpretation the Technicolor Entities suggest. See

       Cinergy, 865 N.E.2d at 574 (“Clear and unambiguous language in insurance

       policy contracts, like other contracts, should be given its plain and ordinary

       Court of Appeals of Indiana | Opinion 22A-PL-2094 | August 22, 2023      Page 16 of 17
       meaning.”). Because we have determined there is no valid and collectible

       underlying insurance available under the AXA Primary Policies, there is no

       coverage available under the Following Form Endorsements of the AXA

       Umbrella Policies.

       Conclusion
[18]   For the foregoing reasons, we affirm the trial court’s judgment.

[19]   Affirmed.

       Bailey, J., and Crone, J., concur.

       Court of Appeals of Indiana | Opinion 22A-PL-2094 | August 22, 2023   Page 17 of 17