New York Court Allows Allocation Based on General Date of First Exposure

In a 2018 decision, the court determined that “all sums” allocation and vertical exhaustion applied to the plaintiffs’ claims regarding coverage for amounts expended in the defense and resolution of lawsuits related to exposure to asbestos-containing products. The matter then proceeded to trial, where the parties presented evidence regarding dates of first exposure for underlying claims and expert opinion regarding allocation.

The court adopted the plaintiffs’ factual contentions and allocation methodology. Included in their allocation methodology was allocation of claims based on a general date …

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Illinois Court Holds Plaintiff Failed to Prove Coverage Allocation

John Crane, Inc. used asbestos fibers in the manufacture of gaskets, mechanical sealing, and packing products. It was named a defendant in over 325,000 cases involving personal injury claims based on asbestos exposure, and as a result became involved in a dispute with its insurers regarding coverage for such lawsuits. This decision was an appeal of a trial court judgment that (a) one of John Crane’s multi-year primary policies had annualized $20 million per occurrence limits, which resulted in a finding that the policy had …

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Ohio Appellate Court Applies “All Sums” and Vertical Exhaustion

William Powell Co. v. OneBeacon Ins. Co., 2020 Ohio App. LEXIS 2200 (Ohio Ct. At.. June 10, 2020)

The William Powell Company has been embroiled in a years-long dispute with its insurers regarding coverage for asbestos-related liabilities. In this decision, the court addressed whether the language of certain excess liability policies supported vertical exhaustion or horizontal exhaustion of coverage. Horizontal exhaustion means that all triggered primary policies must be exhausted before any excess policy can be triggered. Vertical exhaustion means that only the primary …

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Court Holds Law Firm May Be Alter-Ego of Defunct Company

In October 2018, a jury in a federal district court in North Carolina granted a judgment in excess of $30 million against Covil Corporation, a company that formerly manufactured products containing asbestos but has been defunct since 1993. By the time the North Carolina litigation commenced, Covil had no officers, directors, agents, or employees. As a result, the litigation was directed by Covil’s insurers. After the jury verdict was handed down, a receiver for Covil was appointed in South Carolina.

In an effort to collect …

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Second Circuit Reverses $59 Million Reinsurance Coverage Decision

Second Circuit, April 28, 2020

An insurer and its reinsurer were engaged in a long-running dispute over whether the reinsurer was obligated to reimburse the insurer for amounts paid in settlement to Goulds Pump, Inc. The settlement between the insurer and Goulds related to thousands of personal injury claims made against Goulds due to exposure to asbestos contained in Goulds’ products.

When the insurer settled its liability under primary and umbrella policies it had issued to Goulds, the parties agreed that the primary policies—which had …

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Ohio District Court Denies Insurer’s Motion for Summary Judgment on Pollution Exclusion, Contribution, and Bad Faith

U.S. District Court for the Northern District of Ohio, Eastern Division, April 24, 2020

R.W. Beckett Corporation was sued in a large number of cases alleging harm from exposure to asbestos in gaskets used in oil burners Beckett produced from 1960 to 1986. For 16 years, Beckett paid its own litigation costs, but it later discovered several insurance policies that covered the relevant time periods. The insurers who issued those policies began paying Beckett’s litigation costs, dividing the costs between them in an informal cost …

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Use of Future Claims Representative Satisfied Due Process

United States Court of Appeals, Second Circuit, February 19, 2020

The Johns-Manville Corporation entered bankruptcy in the early 1980s. In 1986, the bankruptcy court established a fund pursuant to a settlement with Johns-Manville’s insurers to compensate individuals injured by the corporation’s asbestos-containing products. The court then ordered that all claims—both those against Johns-Manville based on their products and those against its insurers related to their coverage for such claims—be brought against the trust that would administrate the fund. That trust still exists and processes claims from people …

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Partial Settlement Did Not Moot Claim for Vexatious Refusal to Pay

MISSOURI – O’Reilly Auto Enterprises, LLC succeeded to the interests of Grand Auto, Inc., and O’Reilly was named as a defendant in several asbestos-related personal injury actions as a result. Industrial Indemnity had issued two insurance policies covering such claims to Grand Auto, and U.S. Fire had succeeded to Industrial Indemnity’s interests. As a result prior to 2012, U.S. Fire provided defense and indemnity to O’Reilly in the personal injury actions pursuant to the Industrial Indemnity policies.

In 2012, the insurer incorrectly determined that the …

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Insurer’s Claim for Reimbursement Misses Pleading Deadline

MINNESOTA – The Continental Insurance Company sold general liability policies to McQuay-Perfex, Inc., a company that manufactured and sold products containing asbestos. McQuay-Perfex went through a series of mergers and name changes throughout its history, leaving Daikin Applied Americas, Inc. as its successor by merger. Daikin was named the defendant in a series of asbestos suits, and it tendered the suits to Continental. Continental provided a defense subject to a reservation of rights and filed a separate declaratory judgment action to determine coverage.

In August, …

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Insurer’s Settlement Allocation Entitled to Defense in Dispute with Reinsurer

NEW YORK — Reinsurer Century Indemnity Company filed a series of motions following an adverse jury verdict in its dispute with Insurer Utica Mutual Insurance Company regarding Utica’s handling of a settlement with Goulds Pumps related to a slew of asbestos claims against Goulds.

Century first contended that the judgment should be amended to properly calculate prejudgment interest. According to Century, the jury calculated all prejudgment interest from the date of Utica’s initial billings to Century, when in fact only a fraction of the total …

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