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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Court Refuses to Dismiss Coverage Suit Even Where Insurers’ Time on Risk Does Not Overlap

MARYLAND – Three alleged insurers of Tate Andale, Inc., a company that manufactured products containing asbestos and has been made defendant in related personal injury cases, disputed their coverage obligations to Tate Andale.  While Hartford Accident & Indemnity Company and Zurich American Insurance Company were defending Tate Andale in the underlying suits, Pennsylvania National Mutual Casualty Insurance Company had not participated in Tate Andale’s defense.  Prior to the filing of this lawsuit, Penn National filed its own declaratory judgment action against Tate Andale, requesting the …

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NC Federal Court Says Not All Asbestos Claimants Must Be Joined in Coverage Action

NORTH CAROLINA – In October 2018, a jury in the Middle District of North Carolina awarded more than $32 million in a claim against Covil Corporation based on a decedent’s exposure to asbestos-containing insulation sold by Covil. Since then, Covil, its insurers, and other parties who have brought asbestos claims against Covil have been engaged in litigation regarding how Covil’s only remaining assets — its insurance policies — will apply to the asbestos claims.

In the  decision, the federal district court denied Covil’s motion to …

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SC District Court Grants Motion to Realign, Preserves Jurisdiction

The federal district court for the District of South Carolina granted the motion of defendant Sentry Insurance, a Mutual Company, to realign certain defendants in the case as plaintiffs in order to create diversity jurisdiction in the federal court.

The overall matter is an insurance coverage dispute among Covil Corp., a now-defunct company that once manufactured asbestos-containing thermal insulation, and its insurers, regarding underlying personal injury claims. In 2018, Covil was subjected to a $38 million judgment in one of the underlying suits, and it …

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California Court Allows Insurer to Repair Default

CALIFORNIA – A San Francisco Superior Court allowed Century Indemnity Company (Century) to vacate a default and default judgment against its potential former insured, James A. Nelson, Co., Inc. (Nelson). The plaintiff, the wife of a decedent whose death was attributed to alleged exposure to asbestos-containing products, brought several lawsuits for wrongful death in or around 2012. About a year after bringing suit against Nelson Co., the plaintiff requested and received an entry of default. The following year, in January 2014, she received a default …

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Umbrella Policy’s Self-Insured Retention Does Not Apply to Excess Policies

CALIFORNIA — A coverage dispute arose from numerous claims filed, in various jurisdictions, against Deere & Company for personal injuries arising from alleged exposure to asbestos-containing brakes, clutch assemblies, and gaskets used in Deere machines. In this decision, the court addressed two issues: 1) whether Deere’s higher-layer excess policies were triggered once the first-layer excess policy limits, which were subject to a self-insured retention (SIR) paid by Deere, had been exhausted; and (2) whether the higher-layer excess insurers’ indemnity obligation extended to Deere’s defense costs …

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Default Judgments Set Aside After Insurer Discovers Policies

CALIFORNIA — Beginning in 2009, several asbestos plaintiffs filed claims against the Associated Insulation of California (the Associated). The Associated ceased operating in 1974 and did not respond to the plaintiffs’ complaints. Two of the plaintiffs notified the Associated’s alleged insurer, Fireman’s Fund, of the lawsuits. However, Fireman’s Fund could not locate any policies issued to the Associated and therefore declined to defend or indemnify Associated. The plaintiffs then sought and obtained default judgments in various amounts.The plaintiffs served notice of entry of default judgments …

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Insured’s Asbestos Claims Considered Multiple Occurrences But With Aggregate Limits

PENNSYLVANIA – The plaintiff Ohio Valley Insulating Company (OVI) filed a motion for partial summary judgment and the defendants Continental Insurance Company, Zurich American Insurance Company, and Granite State Insurance Company (collectively, Insurers) cross-moved for summary judgment. The court granted and denied in part both motions.

With regard to the first legal issue addressed by the Western District of Pennsylvania, OVI sought a declaration that various asbestos-related suits filed against it were based on multiple occurrences related to OVI’s “operations” (installation and removal of asbestos-containing …

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