Hartford vapor case seeps into insurance liability matter

Steve Korris Feb. 8, 2007, 4:59am

In the swirl of suits over refinery pollution in the village of Hartford, Madison County Associate Judge Ellar Duff gets to help decide who pays for what.

While Circuit Judge Daniel Stack manages a noisy clash between class action attorneys over the liability of Apex Oil and others for damages, Duff quietly approaches a decision on whether Apex Oil's liability should pass through to its insurers.

Duff recently denied a motion of the insurers to send the case to circuit court in the city of St. Louis, where Apex Oil has its headquarters.

"The events giving rise to this litigation occurred in Madison County and there is a local interest in local resolution of the controversy…," Duff wrote.

"Four underlying lawsuits against Apex which are the subject of this declaratory judgment action are pending in Madison County, Illinois," she wrote.

Apex Oil sued nine insurers in 2005, seeking a declaration that they were obligated to defend and indemnify Apex Oil.

Apex Oil filed the suit on the miscellaneous remedies docket. The court assigns "MR" cases to unelected associate judges, including Duff.

Defendant National Union Fire Insurance responded by suing Apex Oil at U.S. District Court in St. Louis. The federal court declined jurisdiction.

Insurer Royal Indemnity also sued Apex Oil in St. Louis federal court, but again the court declined jurisdiction.

National Union Fire then challenged Madison County as an inconvenient forum.

Dennis Dolan of Chicago moved June 23 to dismiss so Apex Oil could file the suit in St. Louis city civil court.

Dolan argued that National Union Fire issued policies to Apex Oil in St. Louis through brokers in St. Louis.

He wrote that Missouri law would apply. He wrote that many witnesses resided in Missouri and would not be subject to the court's jurisdiction.

He expressed concern about congestion in the Madison County docket.

Other insurers joined the motion.

Duff brought the motion to a hearing Jan. 19. She asked no questions. Mostly she watched Apex Oil attorney William Knapp demolish the opposition.

Knapp said Apex Oil was a defendant in four Madison County suits. He said the claims potentially involve hundreds of properties and thousands of individuals.

"It may well be the largest piece of Madison County-based and Madison County-specific litigation ever," Knapp said.

"One issue that I have probably addressed more than any other is forum non conveniens. I have filed them. I have opposed them. Probably in the course of 20 years, dozens – maybe over a hundred times in this court," he said.

"But I have never filed or defended or even heard of a forum non conveniens motion where the events which give rise to the litigation occurred in the county where the suit was filed."

He said the case had more connections to Madison County than to any place else on the planet.

He said the insurers wanted to know if they were properly put on notice, what Apex Oil knew, when Apex Oil knew it, and when damages first manifested.

"These are all issues that are specific to the site," he said.

"The citizens of Madison County certainly have a lot more of an interest in this case than anybody who resides over in the Eastern District of Missouri, who probably haven't even heard of the case.

"Whether Illinois law applies or some other jurisdiction's law applies is an issue the court can determine as a matter of choice of law."

For National Union Fire, Dolan said it was a case of contract interpretation.

He said National Union Fire policies exclude claims for bodily injury and property damage related to pollution.

"Apex is contending that apparently that exclusion does not apply," Dolan said.

In response Knapp said National Union Fire argued in federal court that releases of contamination took place before the inception of their policy.

He quoted the insurer's pleading: "Apex Oil was aware of these various releases years before the underlying suits were issued and did not notify National Union."

He said pleadings from the case would fill the room. He said they would include Alton Telegraph articles going back 50 years.

Four days later, Duff ruled in Knapp's favor.

She wrote that no defendant filed an affidavit, deposition testimony or other evidence affirmatively stating that Madison County was an inconvenient forum.

"The Court takes judicial notice that congestion is not a concern on the MR docket in Madison County, where this cause is pending," she wrote.

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