Court Orders $68 Million Judgment in Favor of Cannon & Dunphy, S.C. Client
A Milwaukee County Circuit Court judge has ordered Central National Insurance co. and Westchester Fire Insurance co. to pay Johnson Controls Inc. $68 million after the two companies refused to defend Johnson Controls over its contaminated landfills.
Milwaukee County Circuit Court Judge Michael Guolee issued the judgment siding with Milwaukee- based automotive battery maker and facility management systems company on Aug. 27. The two insurers are appealing the ruling.
Originally brought to the court in 1080, Johnson Controls had been named a potentially responsible party in environmental contamination claims and lawsuits from 32 sites across the U.S. in the mid- 1980s. During those lawsuits, Johnson Controls sought defense and indemnification from its insurers, but the insurance companies argued that Johnson Controls' policies did not cover the environmental restoration and remediation costs at the sites.
The case initially included 23 insurance companies, but 21 of those insurance companies settled with Johnson Controls for more than $159 million.
“In this case, however. the defendants •hung back,' While JCI (Johnson Controls Inc.) entered into settlement agreements with other insurers," Goulee wrote in his decision. "Thev did so despite the overriding public interest in settling and quieting litigation that has now been ongoing for nearly a quarter century.”
After the Wisconsin Supreme Court decided in 2003 that the insurance companies having received a potentially responsible party letter — had a •duty to defend,- Central National Insurance and Westchester Fire Insurance did not defend the case, according to court documents.
Because the two insurance companies had allowed the court to make the decision, Guolee pointed out that they had "lost control of their destiny and have not found the peace of mind that a settlement provides."
"Anv doubt about whether an insured has been made whole should be resolved in favor of the stronger policy involving the harsh consequence for breaching the duty to defend," Goulee wrote. '"While it may appear that JCI Will receive a Windfall, such a result would be better than giving the windfall to the breaching parties."
Mark Thomsen, Johnson Controls' attorney, and Heidi Vogt, the attorney representing Westchester Fire Insurance Co., declined to comment on the case saying it is still in litigation.
An appeal was filed by Central National Insurance and Westchester Fire Insurance on the case Aug. 29.