Federal District Court for the Eastern District of Louisiana Grants Motion to Stay as to All Parties Where Insurer for Certain Defendants Declared Insolvent

U.S. District Court for the Eastern District of Louisiana, July 15, 2021

In an action by the plaintiff, former employee of a shipyard, for injuries related to asbestos inhalation and subsequent mesothelioma, the shipyard’s insurer moved to stay all proceedings due to the insurer’s being placed into liquidation in the Commonwealth Court of Pennsylvania as a result of insolvency.

Bedivere Insurance Company, which included by merger Lamorak—the insurer for the several defendants in the action—was declared insolvent and placed in liquidation in March 2021. The …

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Executive Officers Considered Employees for Co-Employee Exclusions

Louisiana Court of Appeals, First Circuit, April 9, 2021

The plaintiffs brought suit on behalf of deceased against a number of manufacturers and suppliers of asbestos containing products allegedly causing asbestos-related lung cancer. The plaintiffs amended to add Arrowood Indemnity, successor of an insurer which issued a policy to Stone & Webster which was in effect from January 1, 1965 to June 2, 1971.

Arrowood moved for summary judgment asserting that the CGL policies contained employee exclusions which precluded coverage to Stone & Webster for …

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Federal Court Declines to Enjoin Receiver from Pursing Coverage Claims and Defenses in Receivership Court

U.S. District Court for the District of South Carolina, March 1, 2021

The issues before the court arise from an insurance coverage action in which the parties disputed the rights and obligation of Covil under a policy allegedly issued to it and whether injuries in underlying asbestos actions are within the products and completed operations hazard of the policies, as well as the proper method for allocating injury across multiple policy years.

The action was initially filed in state court by the appointed receiver for …

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Court Declines to Find Coverage in World War II Era Asbestos Claim

U.S. District Court for the Southern District of New York, January 22, 2021

This case is an insurance coverage dispute between plaintiff Cosmopolitan Shipping Co., Inc. and defendant Continental Insurance Company regarding claims made against Cosmopolitan by seamen exposed to asbestos on its ships in the 1940s. The policy at issue was unable to be located, apart from three endorsements. An evidentiary hearing was conducted to determine whether the policy provided coverage and what the terms of coverage were.

In September 2017, Cosmopolitan settled 47 …

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Insured’s Liability for Defense Costs Not Appropriate for Interlocutory Appeal

U.S. District Court for the Southern District of New York, November 16, 2020

This case follows an opinion and order by the same court regarding resolution of the parties’ cross-motions for summary judgment. The opinion and order affixed liability on Danaher and Atlas Copco for costs incurred by Travelers in defending certain asbestos and silica related bodily injury claims. Danaher and Atlas Copco moved for leave to file an interlocutory appeal, and North River (NR) moved for partial reconsideration, leave to file an interlocutory appeal, …

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Federal Court Holds Underlying Policies Exhausted by Settlement; Grants Summary Judgment to Insurer on Excess Policy Reinsurance Claim

U.S. District Court for the Southern District of New York, October 19, 2020

An insurer and its reinsurer were involved in a dispute over the reinsurer’s liability to reimburse a portion of a settlement that the insured had allocated to an excess liability policy subject to a contract of reinsurance. The insurer had issued three excess liability insurance policies to Asarco Inc., as part of a “coverage tower,” sequential layers of insurance Asarco purchased as part of its annual insurance program. The reinsurer reinsured the …

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Judgment Modified, Declaration Vacated as Court Erred in Granting Motion for Partial Summary Judgment

Supreme Court of New York, Appellate Division, Fourth Department

The plaintiffs, Carrier Corporation and Elliott Company, filed a declaratory judgment and breach of contract action, wherein they sought declarations of the rights and obligations of the parties under liability insurance policies issued by various insurers, including the Fireman’s Fund Insurance Company (defendant). Carrier Corporation and Elliott Company are once-related entities who face lawsuits alleging personal injuries from asbestos exposure relating to their products. In November 2018, the court granted five motions for partial summary judgment …

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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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