Olin Corporation v. INS. Company of N.A.

Background

In an Opinion and Order dated February 4, 2021, the court granted in part Olin Corporation’s motion for summary judgment concerning Crab Orchard costs. The court had determined that Olin was entitled to $25,177,789 plus prejudgment interest and directed the parties to submit calculations of that interest before judgment was entered.

Olin calculated prejudgment interest at $25,571,531, for a total judgment of $50,749,320. Lamorak calculated prejudgment interest at $24,785,399, for a total judgment of $49,963,188. The principal difference concerned whether Lamorak had to pay interest on $1,289,338 in past Crab Orchard costs that were released in a 2018 settlement. The court rejected Olin’s position because Olin identified no provision in the settlement preserving a claim for interest on those costs, and the court adopted Lamorak’s method of excluding them.

Reconsideration requests

Lamorak moved for partial reconsideration of three parts of the February 4 ruling. A reconsideration motion asks the court to revisit an earlier decision based on matters such as an intervening change in controlling law, new evidence, clear error, or manifest injustice. The court stated that the standard is strict and that reconsideration is not a chance to add arguments that could have been made earlier.

First, Lamorak challenged the ruling that prejudgment interest would run from the date each invoice was paid. Lamorak argued that it was not aware of, or presented with, the GD-OTS costs before 2018. The court rejected that argument and reaffirmed that Lamorak breached and repudiated its policy obligations in the 1990s by failing to respond to Olin’s timely notice letter and disclaiming coverage. The court held that the later assignment of the policies to GD-OTS did not require a new claim.

Second, Lamorak challenged the ruling that “hopscotching” between policy layers was permissible. Lamorak relied on specific policy language for the first time in its reconsideration motion. The court declined to reconsider the issue because Lamorak had the opportunity to make the argument during the summary-judgment briefing. The court also held that the policy language did not change its analysis because the insured still had to pay the underlying amount at least initially, even if an insurer might ultimately be responsible for that amount.

Third, Lamorak asked the court to decide whether $3.6 million paid by GD-OTS to the U.S. Fish and Wildlife Service as stipulated penalties was covered under the policies. Lamorak argued that the payment was not for covered property damage and was uninsurable as a matter of public policy. Olin disagreed.

Ruling and judgment

The court held that the $3.6 million in stipulated penalties was not covered under the policies. It reasoned that civil penalties are not “damages” covered by the policies’ “all sums” provision. Because the court resolved the issue on coverage grounds, it did not decide whether the penalties were also uninsurable as a matter of public policy.

After removing the $3.6 million payment from the calculation, the court determined that Olin was entitled to $24,169,014 in prejudgment interest. The court denied in part and granted in part Lamorak’s motion for reconsideration, awarded Olin that amount of prejudgment interest, and entered judgment requiring Lamorak to promptly pay Olin $49,346,803. The Clerk was directed to close the specified docket entry and the case.