Lord, Bissell & Brook, a legal firm representing London Market Insurers in a lawsuit filed against the insurers by The B.F. Goodrich Company, announced that a Summit County, Ohio court has granted summary judgment and dismissed their clients from the suit.
The court determined that The B.F. Goodrich Company was not entitled to insurance coverage for the costs of cleaning up a pollution site at its Calvert City, Ky., chemical plant because it delayed unreasonably in giving notice to its insurers.
In a Dec. 19, 2001 opinion, Judge Jane Bond found that The B.F. Goodrich Company knew of the contamination at the site as early as 1964, and by 1980 estimated the cost of cleanup at $27 million, but failed to notify insurers until 1989.
Bond further found that the defendants were prejudiced by the late notice because they lost the opportunity to investigate the claim fairly. In particular, the insurers were prejudiced because they were unable to review documents that were lost or destroyed, because witnesses died, were unavailable or had faded memories, and because The B.F. Goodrich Company had settled with the Kentucky pollution authority with no opportunity for the insurers to participate.
In making her decision, Judge Bond relied heavily on the very favorable precedent from the Ohio Supreme Court in the case Ormet Primary Aluminum Corp. v. Employers Insurance of Wausau, followed by the Ohio Appellate Court in the case of Goodyear Tire & Rubber Co. v. Aetna Casualty & Surety Co.
Both of these cases, which were also defended by Lord, Bissell & Brook, found that prejudice is presumed if the insured delays unreasonably in providing notice to its insurers.