Facts

In 2007, an insurance company and an appliance manufacturer entered into a settlement and release agreement in resolution of several bad faith lawsuits against the insurer. The lawsuits alleged the insurer had failed to defend the manufacturer in a toxic tort case in Pennsylvania. The agreement applied to the manufacturer and its subsidiaries, and included an indemnity provision favoring the insurer. Later, a former subsidiary of the manufacturer was sued in a toxic tort case in Orange County, prompting the insurer to sue the manufacturer for declaratory relief and breach of contract. The manufacturer cross-complained against the insurer.

PLAINTIFF'S CONTENTIONS:
Plaintiff argued that the agreement released it from the toxic tort claim and the manufacturer had to indemnify the insurer for costs incurred in defending the former subsidiary under the indemnity provision.

Result

The court found in favor of the manufacturer, determining that the insurer's reading of the agreement was incorrect. The court awarded defendant $367,000 in damages.