This insurance-coverage dispute involved alleged asbestos exposure from asbestos-containing vermiculite mined from Vermiculite Mountain outside of Libby, Mont. The court acknowledged that vermiculite ore may contain toxic asbestos minerals, which alleged exposure formed the basis for the lawsuit.
Specifically, in Zurich Am. Ins. Co. v. Burlington N. & Santa Fe Ry. Co. (March 13, 2025), appellant Zurich argued the trial court erred in granting Burlington Northern and Santa Fe Railway Company’s (BNSF) summary judgment while also denying Zurich’s two summary-judgment motions concerning its duty to defend BNSF from and against local residents’ suits claiming bodily injury from exposure to asbestos-contaminated vermiculite from BNSF’s operations at a vermiculite-loading facility near Libby.
The Texas Court of Appeals (Second District), applying Texas’s eight-corners rule, held that the trial court correctly determined that the allegations in the pleadings that BNSF filed as summary-judgment evidence established Zurich’s duty to defend under Zurich’s Owners, Landlords, and Tenants’ (OL&T) policy’s premises /operations coverage and did not conclusively establish the completed-operations exclusion.
Zurich argued that it had no duty to defend because “none of the pending claims against BNSF involved a plaintiff who claimed to have suffered an injury while on the River Loading Facility premises or on land immediately adjoining the premises” thus maintaining that it owes no coverage for the suits where plaintiff does not allege exposure falling within premises operations. The court rejected this argument noting that the complaints alleged bodily injury against out of the ownership, maintenance, or use of the River Loading Facility and thus satisfied the pleading specificity standard to establish a duty to defend.
The court further held that the Libby lawsuits arose out of a single occurrence. Specifically, it held that although each individual Libby claimant had alleged a separate accident or exposure under the policy coverage at issue, the alleged exposure constituted but a single accident or occurrence under the OL&T policies. Lastly, the court also determined that the trial court correctly determined that Zurich did not raise a genuine issue of material fact regarding policy-limits exhaustion or the right to recoup its previously expended defense costs.
Read the full decision here.