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 of first exposure rather than a client specific date of first exposure. The court held that, notwithstanding the lack of a specific date, excluding such claims would be highly prejudicial to plaintiffs due to the inherent difficulty to ascertain a specific date of first exposure. The plaintiffs had used their best efforts, and that was enough for the court.

The court also rejected the defendant’s position that the plaintiffs should not be permitted to erode underlying policies by allocating to them defense costs in cases in which no indemnity was ultimately paid. The court held that the “notice of occurrence” and “loss payable” provisions in the relevant policies, as well as the definitions of “”occurrence” and “covered,” did not require that covered costs for a claim include some element of indemnity rather than purely defense.

The court did side with the defendant on one issue. The defendant argued the plaintiffs were entitled to prejudgment interest only from the date when they filed a second amended complaint that included a breach of contract claim. That is, the plaintiffs were not entitled to predjudgment interest from the dates of earlier complaints that did not include breach of contract claims. Applying New York procedural rules and the holding in Viking Pump vs. Century Indemnity, 2018 WL 2331990 (Del. Sup. 2018), the court agreed with the defendant.

Carrier Corp. and Elliot Co. and The Travelers Indem. Co. v. Allstate Ins. Co., 2005-EF-7032, 2020 N.Y. Misc. LEXIS 2593 (N.Y. Super. Ct., Onondaga County, May 20, 2020)