Bankruptcy Injunction Extends to Debtor’s Insurers

W.R. Grace & Co. (Grace), a Chapter 11 bankruptcy debtor, at one time operated a vermiculite mine, and related mining activities released asbestos-containing dust into the atmosphere. It began facing asbestos-related lawsuits in the 1970s.

Grace filed a voluntary Chapter 11 bankruptcy in 2001, and a plan of reorganization was confirmed in 2014. The plan created a trust for the payment of asbestos personal injury claims. As part of a settlement agreement, one of Grace’s liability, excess, and workers’ compensation insurers, Continental Casualty Company and …

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Pro Rata Allocation and Exposure Trigger Confirmed in New York Federal Court Decision for Insurers

Troy Belting & Supply Co. was named as a defendant in lawsuits alleging bodily injury caused by exposure to asbestos from products it manufactured. It became involved in a dispute with its insurers over coverage for the costs of settling such lawsuits. Pacific Employers provided coverage for Troy Belting from 1974 to 1984, and various Hartford Insurance Company entities provided coverage from 1984 to 1992.

Pacific Employers and Hartford sought reimbursement from Troy Belting for cases where they paid 100 percent of the settlement costs …

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Delaware Justices: Asbestos Injury Triggers Coverage Continually from First Significant Exposure

The Delaware Supreme Court took up several issues in the ongoing dispute between plaintiffs, Viking Pump, Inc. and Warren Pumps, LLC, and various insurers who issued excess policies to Viking and Warren’s predecessor, Houdaille Industries, Inc. between 1972 and 1985 (the Excess Insurers). Houdaille, and later Viking and Warren, manufactured pumps containing asbestos, and a multitude of claims against Viking and Warren related to asbestos exposure have given rise to a lengthy dispute between Viking and Warren and their insurers.

In the present decision, the …

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Court Rules Summary Judgment Not Appropriate Due to Ambiguity on How Non-Cumulation Clause Operated

Liberty Mutual Insurance Company issued successive annual insurance policies to the Fairbanks Company from January 1, 1974 to January 1, 1982. Liberty issued both comprehensive general liability and umbrella policies. Multiple lawsuits were filed in several jurisdictions against Fairbanks, alleging injuries due to exposure to asbestos, and this coverage litigation resulted.

On March 21, 2016, the court ruled on Liberty’s motion for summary judgment, concluding that the policies were subject to pro rata allocation such that Liberty was only liable to indemnify Fairbanks for the …

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No Liability Coverage Allocation for Manufacturers Who Continued Making Products with Asbestos After 1987

 

A New Jersey appellate court held that policyholders who continued to manufacture products containing asbestos after 1987 — when coverage for injuries arising from such products was no longer available — need not shoulder any portion of liability for injuries related to asbestos exposure from their products, so long as any portion of such exposure occurred prior to 1987.

The Bendix Corporation, predecessor of Honeywell International, Inc., manufactured and sold brake and clutch pads that contained asbestos. Honeywell has been sued in tens of …

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New York Court of Appeals Opts for “All Sums” Allocation in Asbestos Coverage Case

In a landmark ruling, the New York Court of Appeals held that “all sums” allocation and vertical exhaustion applied in a case involving coverage for injuries related to asbestos exposure. The court based its holding on the language of the insurance policies, which included non-cumulation clauses or non-cumulation and prior insurance provisions.

The plaintiffs, Viking Pumps, Inc. and Warren Pumps, LLC acquired pump manufacturing businesses from Houdaille Industries in the 1980s. These acquisitions later subjected Viking and Warren to significant potential liability in connection with …

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Court Sides with Insurers; Rules Pro Rate Approach Applies on Liability Costs

The case involves two consolidated lawsuits — one from the federal district court for the Southern District of New York, and another from Georgia state court. The Georgia state court action was removed to federal court and then transferred to the Southern District of New York.

This lawsuits concern insurance coverage for The Fairbanks Company for liability arising from asbestos-related personal injury actions. Prior to 1984, Fairbanks manufactured packings and gaskets that contained asbestos. Fairbanks entered into insurance policies with several insurers, including Liberty, between …

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Court Rules Insurer Has Duty to Pay Defense and Indemnification Costs of Asbestos Claims

Liberty Mutual had a duty to pay defense and indemnity costs for a variety of asbestos-related cases filed nationwide against its insured, York International Corporation, and York Corporation, the insured’s predecessor. Liberty Mutual had elected not to defend the underlying lawsuits or file a declaratory judgment action regarding coverage, and the underlying suits were settled by the insured. The insured then submitted the complaints in the underlying cases and invoices for defense and indemnity costs to Liberty Mutual. In this case, the court ruled on …

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Massachusetts Court Grants Defendants’ Motion to Dismiss in Case Where Plaintiff Sought Reimbursement for Litigation Expenses in Asbestos-Related Cases

The U.S. District Court for the District of Massachusetts ruled that the Massachusetts Insurers Insolvency Fund could not pierce the corporate veil or impose successor liability on a corporation that purchased the assets of another corporation, which was the subject of workplace injury claims based on exposure to asbestos and whose liability insurers had become insolvent.

Beacon Sales Company, Inc. (BSC) sold nearly all of its assets to the defendant Beacon Sales Acquisition, Inc., (BSAI) a subsidiary of defendant Beacon Roofing Supply, Inc. (BRS), in …

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Fifth Circuit Rules Insurance Company Has No Duty to Defend After Primary Insurer Declared Insolvent

Canal Insurance Company was the excess and umbrella insurer of Montello, Inc., a manufacturer of oilfield drilling equipment that contained asbestos.  Montello had been sued by individuals claiming injuries as a result of exposure to asbestos in connection with its equipment. In 2003, Montello’s primary insurer, The Home Insurance Company, was declared insolvent by a New Hampshire court without having paid out any claims for bodily injury on Montello’s behalf.

Thereafter, Canal filed suit for declaratory judgment that it had no duty to defend Montello …

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