by Lara Langeneckert
Deputy Solicitor General
Office of the Indiana Attorney General
Imagine you are a successful widget manufacturer, and you have just expanded your business by purchasing another widget company called Acme. In the sale, you received all of Acme’s corporate assets, including its commercial general liability (“CGL”) insurance policy  from Flanders Insurance. You are all set to begin producing more widgets than ever before when a lawsuit stops you in your tracks: Apparently, the day before you bought Acme, an Acme widget exploded and injured three people. Those people are now suing you, Acme’s successor-in-interest, to recover for their personal injuries.
A bad situation, to be sure, but you’re not too worried. After all, you have Acme’s CGL policy, so Flanders has to defend and indemnify you against this lawsuit, right? To give a classic lawyer answer: it depends —mostly upon what jurisdiction you happen to be in. And if you are in Indiana, you are probably out of luck. This Article discusses the development of the law in this area, with a specific focus on Indiana. Specifically, this Article addresses two ways corporate policyholders can protect themselves both before and after a sale.
I. NO-ASSIGNMENT CLAUSES AND HOW THEY WORK
CGL policies generally contain no-assignment clauses, which are provisions prohibiting the policyholder from transferring the policy without the insurer’s consent. A typical no-assignment clause might read: “Assignment of interest under this policy shall not bind the [insurer] until its consent is endorsed hereon.” As to post-sale occurrences, the clause makes sense; after all, Flanders agreed to insure Acme, not you, and if you pose a greater risk, it would be unfair to impose that risk on Flanders without its consent. But as to pre-sale occurrences like the lawsuit you are currently facing, the no-assignment clause gives Flanders a windfall; but for the sale, Flanders would have had to provide Acme with defense and indemnity.
A. The Traditional Rule: Coverage for Pre-Sale Occurrences Is Freely Assignable
That windfall is why no-assignment clauses have traditionally been applied only to post-sale occurrences. Ocean Accident & Guarantee Corporation v. Southwestern Bell Telephone Company, decided nearly seventy-five years ago, held that liability insurance coverage for pre-sale occurrences is freely assignable, regardless of any no-assignment clauses in the policy. . The Ocean Accident rule enjoyed broad acceptance;  the few departures involved unusual situations such as newly created statutory liability that did not exist at the time of sale,  or where there was no attempt to transfer the policies at all. .
B. The New Rule: Insurance Coverage for Pre-Sale Occurrences Is Not Assignable
But in 2003, the California Supreme Court rejected Ocean Accident. In Henkel Corporation v. Hartford Accident & Indemnity Company, Henkel purchased certain metallic chemical product assets from another corporation; several years later, plaintiffs sued Henkel for bodily injuries allegedly caused by those chemicals. . After settling the underlying cases, Henkel sought contribution from the insurers of its predecessors-in-interest, but the insurers refused, citing the no-assignment clauses in the policies. . The court cited the Ocean Accident rule but found it inapplicable to CGL policies, holding instead that coverage for a pre-sale loss could be assigned only if (1) the loss had “been reduced to a claim for money due or to become due,” or (2) “the insurer has breached a duty to the insured, and the assignment is of a cause of action to recover damages for that breach.” . Otherwise, it reasoned, insurers could unfairly be liable for increased indemnity and defense costs that they did not bargain for. .
Henkel received a mixed reception. The corporate and academic communities were critical,  and several courts explicitly rejected it. . It is easy to see why: the Henkel rule is unfair to corporate policyholders and injured plaintiffs while giving insurance companies an undeserved windfall.
From the policyholder perspective, free assignment of coverage “for past but possibly unknown losses . . . lowers transaction costs and facilitates economic activity and wealth enhancement.” . By restricting assignment, Henkel “elevates one aspect of contractual freedom—the insurer’s limitation on assignment—over a second: the ability of corporate actors to allocate property, including intangible property, to such uses as they see fit.” . It ignores the realities of corporate transactions; the notion “that transacting parties will bargain over the allocation of tort liability” is “unrealistic” in many corporate contexts, including transactions with wholly-owned subsidiaries and other close bargains. . And the idea that corporate policyholders will be able to obtain their insurers’ consent to assignment is equally illusory; scholarship reflects “no instances in which parties have sought and an insurer has agreed to assignment of a policy in the face of a large impending exposure.” .
From the perspective of the injured plaintiff suing the corporate policyholder, Henkel is a cloud on the prospect of recovery. In our “largely judgment-proof society, effective liability is generally governed by the available insurance coverage.” . Without that coverage, injured plaintiffs may go partially or even completely uncompensated. . Indeed, courts rejecting Henkel have focused on the fact that “claim assignability greatly facilitates the compensation of injured parties.” .
Insurance companies, on the other hand, do very well under Henkel. They effectively “reap a windfall by denying coverage for covered losses based not upon the nature of the loss, but upon the post-loss corporate maneuverings of the entity that paid for the coverage.” . Thus, Henkel “essentially relieved the liability insurers of obligations they would otherwise have had there been no acquisition of [the policyholder].” . This windfall is preferable, the insurers argue, to the unfair increase in risk that they would face if corporate policyholders were permitted to assign coverage rights post-loss to an entity that was not a party to the original insurance contract.
First, insurers argue that the new entity may be more difficult to defend. But if that were true, insurers “would regularly protest any substantial changes in corporate control,” as those changes often alter a company as much or even more than a merger, consolidation, or asset sale. . Companies change over time, and “the entity that avails itself of the policy could be much different from the one that purchased the policy,” but those changes generally do not impact liability coverage, as “the focus of the claim will be on the company as it was at the time of the triggering occurrence.” . Also, there is no reason for an insurer to worry about a successor organization being uncooperative, because the insurer “is freed of its defense obligation if the successor firm does not fulfill its duty to aid in the defense.” . Insurers also argue that they may be unfairly obligated to defend both the original insured and the assignee. That idea “is not sound. If the right to a defense has been transferred to a successor, the transferor no longer has that right. The right cannot both be transferred and retained.” . “If some other party asserts a right to a defense, the matter can be resolved through a declaratory judgment action.” .
C. U.S. Filter: Indiana Adopts the Henkel Rule
Despite these compelling factors, some jurisdictions, including Indiana, adopted Henkel. . To understand the relevant Indiana case, a bit of background is helpful. Wheelabrator Technologies, Inc. (“Wheelabrator”) manufactured various industrial products, including blast machines  and bag houses. . Beginning in the mid-1980s, the company was involved in a dizzying series of corporate transactions; the upshot of these was that by 1997, U.S. Filter Corporation (“U.S. Filter”) owned the blast machine business and Waste Management, Inc. (“Waste Management”) owned the baghouse business via a 1986 purchase from Honeywell International. . Throughout their corporate history, these companies held CGL policies from many difference insurance companies. . All of those policies contained no-assignment clauses. .
In Travelers Casualty & Surety Co. v. United States Filter Corp.,  plaintiffs sued U.S. Filter for personal injuries allegedly caused by exposure to silica from the blast machines. . U.S. Filter subsequently filed a complaint against several insurance companies seeking defense and indemnity under CGL policies originally purchased by its predecessors-in-interest. . Wheelabrator, Waste Management, and two other affiliated companies intervened in the case seeking similar relief. . The parties agreed to a bifurcated proceeding in which the initial phase would be limited to a determination of the plaintiffs’ and intervenors’ right, if any, to seek coverage under the policies at issue—over eighty in total. .
The trial court ultimately granted summary judgment to U.S. Filter but denied it to the intervenors, finding that the no-assignment clause did not apply and that the intervenors had validly assigned all of their rights under the policies to U.S. Filter when it purchased the blast machine business. .
On interlocutory appeal, the Indiana Court of Appeals affirmed the trial court as to U.S. Filter and reversed as to the intervenors, holding that “a chose in action arose under the occurrence-based insurance policies at the moment of each loss,” defined as the moment when each individual claimant was exposed to silica, and that those choses-in-action were “freely transferable assets” that “passed to Waste Management and U.S. Filter via corporate transactions.” . Thus, the no-assignment clauses applied only to the policies, not to existing choses-in-action under the policies. .
The insurers successfully sought transfer, and the Indiana Supreme Court ordered entry of summary judgment for the insurers on all claims. . Although it noted that no-assignment clauses are normally not enforced as to pre-assignment losses like the silica claims at issue, the Court, citing Henkel, held that an insured’s claim to indemnity and defense under an occurrence-based CGL policy is not assignable “until a claim is made against the insured . . . [or] the losses . . . have been reported.” . At that point, the insured has a claim for indemnity and defense against its insurer—a chose-in-action—that is freely assignable without the insurer’s consent. .
The Court gave several reasons for its decision. . First, it noted that “[a] right not currently held is not a chose in action assignable at law,” and thus there is no chose in action until the “moment when the policyholder could have brought its own action against the insurer for coverage”—meaning, under the policies at issue, the moment that “a claim is made against the insured.” . Second, the Court stated that its decision would prevent insurers from being obligated to defend both the original insured and the assignee. . Finally, the Court dismissed the argument that its decision would chill corporate transactions, noting that corporations may deal with liability risks by indemnification agreement or price negotiation. .
D. Wheelabrator: A Case Study
The ironic result in Continental Insurance Co. v. Wheelabrator Technologies, Inc.  shows why the U.S. Filter court erred by adopting Henkel. Waste Management had intervened in U.S. Filter, but it had also filed its own coverage lawsuit against various insurers for underlying asbestos claims related to the baghouse business. . Waste Management’s lawsuit was stayed pending a ruling in U.S. Filter. After the stay was lifted, certain defendant insurers moved for summary judgment. .
About a week later, Waste Management and its predecessor-in-interest Honeywell International executed two new agreements in an attempt to make their original corporate transaction conform to the Court’s recent ruling. . These agreements purported to assign Honeywell International’s interest in its claims against its insurers to Waste Management. . Waste Management then amended its complaint to assert its rights under the new agreements, alleging the insurers had breached their contracts with Honeywell International and that Waste Management had the right to sue them as Honeywell International’s assignee. Waste Management also claimed it was entitled to equitable subrogation against Honeywell International’s insurers, because Waste Management had paid defense and indemnity costs on claims in which Honeywell International was the actual tortfeasor. . The insurers moved for summary judgment, the trial court denied their motion, and they appealed.
The Indiana Court of Appeals reversed and remanded for entry of summary judgment for in favor of the insurers on all claims. . The court initially noted its role was not “to reconsider or declare invalid decisions of the Indiana Supreme Court”—meaning U.S. Filter. . It went on to conclude that Waste Management had assumed all of Honeywell International’s liabilities in the 1986 corporate sale agreement. . The panel, citing U.S. Filter, stated that insurance rights are only assignable as to choses in action, and Honeywell International had no choses in action in 1986. Thus, it had no insurance rights to transfer in 1986. .
Here is where things got weird. You would think that if Honeywell International did not assign its insurance rights in the 1986 sale agreement, it would still have those rights, and thus the 2009 agreement—entered into after the underlying claims were filed—would be a valid assignment. But you would be wrong. According to the Indiana Court of Appeals, because Waste Management had assumed all its liabilities in 1986, “Honeywell [International] was no longer liable for the losses” in 2009, and thus “it had no insurance rights to transfer.” . The 2009 agreements were therefore also invalid. . In short, no one had any insurance coverage—it had vanished completely in 1986, the minute that Honeywell International’s liabilities transferred to Waste Management.
Finally, the panel rejected Waste Management’s subrogation claim, reasoning that because Waste Management had assumed Honeywell International’s liabilities, Waste Management had merely paid its own debts, not Honeywell International’s. .
Waste Management unsuccessfully sought transfer from this decision. .
II. HOW TO AVOID WASTE MANAGEMENT’S FATE: PRE- AND POST-TRANSACTIONAL SOLUTIONS
There are two possible transactional solutions to this problem. One is far easier said than done: Acme should have obtained Flanders’s consent to assign its policy to you. But what if (as is likely) Flanders refused? In that case, you should be careful not to assume any of Acme’s liabilities. Of course, that might make Acme far less willing to sell. But otherwise, you are exposing yourself to potentially unlimited uninsured liability.
At this point, however, the ship has sailed; you and Acme have executed the sales agreement without either obtaining Flanders’s consent to assign the policy or ensuring Acme retained its own liabilities, and the plaintiffs have filed their lawsuit. The best post-hoc solutions are still bad, but they are better than nothing: you can involve Acme in the lawsuit, and you can seek equitable subrogation to Acme’s rights under the Flanders policy.
Involving Acme in the lawsuit through joinder or impleader may provide access to Acme’s insurance coverage. Your assumption of Acme’s liabilities notwithstanding, it is a basic and universally accepted principle of tort law that a plaintiff may always sue the original tortfeasor, even when another party has assumed that tortfeasor’s liabilities. . The Wheelabrator court rejected that principle, but you may be able to distinguish your case or (on appeal) argue the Wheelabrator court was wrong on that issue.
You may also be able to obtain some relief under a theory of equitable subrogation. The doctrine of equitable subrogation “is not founded upon contract” but rather “upon principles of equity and is applicable in every instance in which one party, not a mere volunteer, pays the debt of another which, in good conscience, should have been paid by the one primarily liable.” . It is designed to prevent a party from receiving “an unearned windfall” that frustrates another party’s “justified expectation.” . Like all equitable doctrines, its application “depends on the equities and attending facts and circumstances of each case,”  but in general it is “a highly favored doctrine, which is to be given a liberal application, and which the courts are inclined to extend rather than to restrict.” .
Of course, in Wheelabrator, the Indiana Court of Appeals rejected Waste Managment’s equitable subrogation claim. But again, you may be able to distinguish Wheelabrator or (on appeal) argue that it was wrongly decided. By allowing you to succeed to Acme’s coverage rights, courts can protect the reasonable expectations of the contracting parties and prevent Flanders from receiving a windfall. After all, it seems only fair that when a company faithfully pays premiums in exchange for the promise of insurance coverage, the insurer should not be permitted to make that promised coverage, bought and paid for, simply “disappear” upon the fortuitous occasion of a corporate sale.
. For the purpose of this article, all policies are occurrence-based rather than claims-made. The difference between these two types of coverage lies in the coverage trigger: in an occurrence-based policy, coverage attaches when the occurrence happens, and in a claims-made policy, coverage attaches when the claim is made. Bob Works, Excusing Nonoccurrence of Insurance Policy Conditions in Order to Avoid Disproportionate Forfeiture: Claims-Made Formats As A Test Case, 5 CONN. INS. L.J. 505, 518 (1999). Occurrence-based polices are more expensive and generally considered (at least until recently) a superior form of coverage. Id. at 507-08. For more on the distinction between these two types of polices, see Sol Kroll, The Professional Liability Policy “Claims Made,” 13 FORUM 842, 843 (1978), available at http://www.jstor.org/stable/25761395.
. JAY SHEPHERD, FIRING AT WILL: A MANAGER’S GUIDE xvi (Apress 2011) (noting that lawyers “tend to shy away from firm opinions and straight answers”).
. Ocean Accident & Guar. Corp. v. Sw. Bell Tel. Co., 100 F.2d 441, 446 (8th Cir. 1939).
. See, e.g., N. Ins. Co. of N.Y. v. Allied Mut. Ins. Co., 955 F.2d 1353, 1358 (9th Cir. 1992); Elat, Inc. v. Aetna Cas. & Sur. Co., 654 A.2d 503, 505-06 (N.J. Super. Ct. App. Div. 1995); Gopher Oil Co. v. Am. Hardware Mut. Ins. Co., 588 N.W.2d 756, 763 (Minn. Ct. App. 1999); B.S.B. Diversified Co. v. Am. Motorists Ins. Co., 947 F.Supp. 1476, 1481 (W.D. Wash. 1996); Total Waste Mgmt. Corp. v. Commercial Union Ins. Co., 857 F. Supp. 140, 152 (D.N.H. 1994).
Although it never specifically adopted Ocean Accident, the Indiana Supreme Court took a similarly broad approach as to the timing of the trigger of coverage for a commercial general liability policy. Eli Lilly & Co. v. Home Ins. Co., 482 N.E.2d 467, 471 (Ind. 1985) (“In order to achieve the objectives in Indiana law, of giving effect to the policies’ dominant purpose of indemnity, we hold that coverage is triggered at any point between ingestion of DES and the manifestation of a DES-related disease. This holding comports with the rule of interpretation that the courts should strive to give effect to the reasonable expectations of the insured.”).
. Quemetco Inc. v. Pac. Auto. Ins. Co., 29 Cal. Rptr. 2d 627 (Dist. Ct. App. 1994).
. Gen. Accident Ins. Co. of Am. v. Superior Court, 64 Cal.Rptr.2d 781 (Dist. Ct. App. 1997); Red Arrow Prod. Co. v. Emp’r. Ins. of Wausau, 607 N.W.2d 294 (Wis. Ct. App. 2000).
. Henkel Corp. v. Hartford Accident & Indemnity Co., 62 P.3d 69, 71–72 (Cal. 2007).
. Id. at 72.
. Id. at 76.
. Id. at 75.
. See, e.g., Henry Lesser, M&A Acquirors Beware: When You Succeed to the Liabilities of a Transferor, Don’t Assume (at Least, in California) that the Existing Insurance Transfers Too, in Deal Points, 8 ABA BUS. L. SEC. COMM. on NEGOTIATED ACQUISITIONS 2 (Fall 2003), http://apps.americanbar.org/buslaw/newsletter/0018/materials/08_03.pdf; Jeffrey W. Stempel, Assessing the Coverage Carnage: Asbestos Liability and Insurance After Three Decades of Dispute, 12 Conn. Ins. L.J. 349, 409, 462 (2006) (describing Henkel as “an extremely poorly reasoned decision providing a windfall to insurers” and “run[ning] counter to both basic contract law and basic insurance law and principles”); John T. Waldron, III, Assignment of Liability Insurance Rights for Latent Injury and Damage Claims, 14 Conn. Ins. L.J. 389, 420 (2008) (stating Henkel “would lead to absurd and unfair consequences”); Adam F. Scales, Following Form: Corporate Succession and Liability Insurance, 60 DePaul L. Rev. 573, 575 (2011) (stating that “[f]rom one perspective—the obviously enlightened view of the insurance professoriate—Henkel appears to be completely wrong. Reflection suggests, however, that it is merely mostly wrong”).
. Ill. Tool Works, Inc. v. Commerce & Indus. Ins. Co., 962 N.E.2d 1042, 1053–54 (Ill. App. Ct. 2011), appeal denied, 968 N.E.2d 81 (Ill. 2012); Viking Pump, Inc. v. Century Indem. Co., 2 A.3d 76,105-06 (Del. Ch. 2009) (applying New York law); N.H. Mfg. Self Ins. Grp. Trust v. Cont’l. Cas. Co., No. 07-E-0043, 2008 WL 6466547 (N.H. Sup. Ct. April 24, 2008); Elliott Co. v. Liberty Mut. Ins. Co., 434 F. Supp. 2d 483, 490 on reconsideration, 239 F.R.D. 479 (N.D. Ohio 2006) (noting Henkel’s rejection in Ohio, Pennsylvania, Connecticut, New York, and Delaware); Massachusetts Elec. Co. v. Commercial Union Ins., No. 9900467B, 2005 WL 3489658 (Mass. Super. Oct. 18, 2005); P.R. Mallory & Co., Inc. v. Am. States Ins. Co., No. 54C01-0005-CP-00156, 2004 WL 1737489 (Ind. Cir. July 29, 2004); Century Indem. Co. v. Aero-Motive Co., No. 1:02-CV-108, 2004 WL 5642427 (W.D. Mich. Mar. 12, 2004).
. Stempel, supra note 11, at 462. This economic view is not purely the province of scholars; courts and judges have reached the same conclusions. See, e.g., Viking Pump, 2 A.3d at 105 (“Henkel is also at odds with New York’s public policy, because it could hamstring markets for the sale of corporate assets . . .”); Glidden Co. v. Lumbermens Mut. Cas. Co., 861 N.E.2d 109, 120-21 (Ohio 2006) (Pfeifer, J., dissenting) (“Only through recognition of the attachment of coverage to the liability can we have true predictability in corporate restructuring in Ohio. Only then can successor companies know with certainty that indemnity and defense costs will be transferred along with liabilities.”).
. Scales, supra note 11, at 581-82.
. Id. at 615.
. Id. at 613.
. Id. at 607 (internal footnote omitted).
. Viking Pump, Inc. v. Century Indem. Co., 2 A.3d 76,105-06 (Del. Ch. 2009); see also Glidden, 861 N.E.2d at 120 (Pfeifer, J., dissenting).
. Glidden, 112 Ohio St. 3d 470, 481, 861 N.E.2d at 120-21 (Pfeifer, J., dissenting).
. Stempel, supra note 11, at 457.
. Scales, supra note 11, at 611.
. Pilkington N. Am., Inc. v. Travelers Cas. & Sur. Co., 861 N.E.2d 121, 133 (Ohio 2006) (Pfeifer, J., concurring in part and dissenting in part); accord N. Ins. Co. of N.Y. v. Allied Mut. Ins. Co., 955 F.2d 1353, 1358 (9th Cir. 1992).
. Northern Insurance, 955 F.2d at 1358.
. Ill. Tool Works, Inc. v. Commerce & Indus. Ins. Co., 962 N.E.2d 1042, 1053–54 (Ill. App. Ct. 2011) (quoting Pilkington, 861 N.E.2d at 133 (Pfeifer, J., concurring in part and dissenting in part)).
. Pilkington, 861 N.E.2d at 133 (Pfeifer, J., concurring in part and dissenting in part).
. See Keller Found., Inc. v. Wausau Underwriters Ins. Co., 626 F.3d 871, 874, 877 (5th Cir. 2010) (adopting the Henkel rule because Texas does not recognize the doctrine of product-line successor liability, so the only way that a successor may be held liable is if it assumes liability by contract, but noting that “Texas courts . . . diverge from [the] majority” on this issue); Del Monte Fresh Produce (Hawaii), Inc. v. Fireman’s Fund Ins. Co., 183 P.3d 734, 747 (Haw. 2007) (adopting Henkel on state law grounds); Pilkington, 861 N.E.2d 121 at 126 (permitting post-loss assignment of indemnity rights only but recognizing that “[t]he distinction created in Henkel does not align with the obligations recognized in Ohio that the insured’s right to recover arises automatically at the time of loss”); see also Holloway v. Republic Indem. Co. of Am., 147 P.3d 329, 335 (2006) (not citing Henkel but concluding the anti-assignment clause was “not ambiguous” and therefore the assignment was not valid); see also generally Joseph Thacker, Do Rights Transfer Under Occurrence-Based General Liability Insurance Policies After the Sale of A Business?, 41 BRIEF (Fall 2011), available at http://www.tmlpa.com/blog/industry-insider/do-rights-transfer-under-occurrence-based-general-liability-insurance-policies-after-the-sale-of-a-business (discussing approaches of different jurisdictions to the assignability issue).
. “The Wheelabrator blast machine is an airless blast machine, developed to mechanically clean pieces of metal in a way that, relative to traditional sandblasting methods, dramatically reduces the use of manpower and the release of silica into the work environment. The machine operates by use of a wheel with flanges that hurls shot at the molded metal. The shot removes sand—and in other applications removes rust, scaling or other material—that has adhered to the metal.” Travelers Cas. & Sur. Co. v. U.S. Filter Corp., 895 N.E.2d 1172, 1175 n.1 (Ind. 2008) (internal quotations and citation omitted).
. “A baghouse is a large building containing several large, fabric filters which trap particulate matter and dust but allow air to pass through to a stack.” Cont’l Ins. Co. v. Wheelabrator Tech., Inc., 960 N.E.2d 157, 159 n.3 (Ind. Ct. App. 2011). The filters were made of asbestos. Brief of Appellants-Defendants Hartford Accident and Indem. Co. at 8, Wheelabrator, 960 N.E.2d 157 (No. 49A02-1010-PL-1110), 2011 WL 1839742 at *8.
. U.S. Filter, 895 N.E.2d at 1175.
. Id. Like Henkel, U.S. Filter has not been well-received. As a general rule, the Indiana Supreme Court’s opinions are frequently cited and relied upon by courts outside Indiana. See Chief Justice Randall T. Shepard, “2012: On the Way to Something Better,” State of the Judiciary (January 11, 2012), available at http://www.in.gov/judiciary/supreme/2465.htm. But since U.S. Filter was decided, it has been so cited only twice: once in a related case, Cont’l Ins. Co. v. Honeywell Int’l, Inc., 967 A.2d 315, 323 n.10 (N.J. Super. Ct. App. Div. 2009), and once in a federal trial court case in which (unlike in U.S. Filter and Wheelabrator) the corporate actors never attempted to assign their insurance policies at all. Chisolm v. Alfa Ins. Corp., Nos. 2:10-CV-00129; 2:10CV130, 2011 WL 284499 (S.D. Miss. Jan. 25, 2011).
. U.S. Filter, 895 N.E.2d at 1174.
. Id. at 1174-75.
. Id. at 1175.
. Id. (citation omitted).
. Id. at 1181.
. Id. at 1180.
. Id. at 1180-81.
. Id. at 1181.
. Id. at 1180-81.
. Id. at 1181.
. Cont’l Ins. Co. v. Wheelabrator Tech., Inc., 960 N.E.2d 157 (Ind. Ct. App. 2011), trans. denied, 974 N.E.2d 476 (Table) (Ind. 2012).
. Id. at 160.
. On February 1, 2010, Honeywell International complied with Waste Management’s request and tendered the thirteen underlying claims to its insurers. Brief of Appellants-Defendants Hartford Accident and Indem. Co. Ex. 1 at 8, Wheelabrator, 960 N.E.2d 157 (No. 49A02-1010-PL-1110), 2011 WL 1839742.
. Wheelabrator, 960 N.E.2d at 162, 165.
. Id. at 162.
. Id. at 164.
. Id. at 164.
. Id. at 165 n.11.
. Cont’l Ins. Co. v. Wheelabrator Tech., Inc., 974 N.E.2d 476 (Table) (Ind. 2012).
. See, e.g., Mislenkov v. Accurate Metal Detinning, Inc., 743 N.E.2d 286, 289 (Ind. Ct. App. 2001) (holding that a contract cannot bind a person who is not a party to it); Tex. & Pac. Ry. Co. v. Watson, 190 U.S. 287, 293 (1903); Grant–Howard Assoc. v. Gen. Housewares Corp., 472 N.E.2d 1, 3 (N.Y. 1984); Haynes v. Kleinewefers & Lembo Corp., 921 F.2d 453, 458 (2d Cir. 1990); 63 Am. Jur. 2d Products Liability § 121 (2012) (“A sale of assets does not vitiate the original company’s liability, and the injured party can elect to proceed against the defunct corporation, the successor corporation, or both. This right of election cannot be altered per se by the corporations; the companies can regulate how such liability will be allocated among themselves, but they cannot affect the rights of someone who is a stranger to their contract.” (footnotes omitted)); 15 Fletcher Cyc. Corp. § 7123 (Sept. 2014) (“Although a sale of assets may allow an injured plaintiff to proceed against the successor corporation, it does not vitiate the original company’s liability. The right of the injured party to elect to proceed against the defunct corporation, the successor corporation, or both cannot be altered per se by the corporations, although the corporations can regulate how much liability will be allocated among themselves.”).
. Loving v. Ponderosa Sys., Inc., 479 N.E.2d 531, 536 (Ind. 1985).
. Bank of New York v. Nally, 820 N.E.2d 644, 653 (Ind. 2005) (applying equitable subrogation to prevent a junior lienholder from leapfrogging over another lienholder who had an expectation of priority).
. Id. at 654.
. Loving, 479 N.E.2d at 537.