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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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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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