Insured’s Asbestos Claims Considered Multiple Occurrences But With Aggregate Limits U.S. District Court, W.D. Pennsylvania, December 27, 2018

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 materials). On the Insurers’ motion, however, Insurers claimed that the relevant asbestos suits arose out of a single occurrence: OVI’s general use of “products” (asbestos-containing insulation materials). The second legal issue addressed by the court was whether insurers correctly claimed that aggregate limits associated with either “products” or “completed operations” hazards applied, or whether OVI was correct in its declaration that aggregate limits were not implicated.

As an initial matter, the court indicated that it would apply the substantive law of the forum state, Pennsylvania, in response to OVI’s request that it apply West Virginia law, explaining that the legal interpretations as to law concerning an event causing damage to several persons was the same in both states.

The court went on to separate “products” claims from “operations” claims, explaining that OVI’s activities triggering the underlying claims did not arise from a single negligent practice that could be considered one cause distributing a uniformly defective product from a single manufacturer or selling an asbestos-containing product from one location. The facts supporting this finding were: i) the policies restricted coverage to OVI’s specified operations at various sites; ii) the policies provided coverage for “completed operations” hazards but said nothing as to “products” hazards’ coverage; iii) the lawsuits arose from multiple contracts, operations, and job sites; and iv) Insurers’ determination as to OVI’s liability in the lawsuits was based on whether a claimant’s work history coincided with the list of OVI’s contemporaneously recorded operations, indicating continuous, repeated exposure to claimants.  Consequently, the court held in favor of OVI, concluding that each site at which OVI conducted operations was a single occurrence.

As to aggregate limits, the Western District of Pennsylvania explained that when an injury triggering coverage occurred subsequent to exposure to an operation, a claim was subject to aggregate limits of the “completed operations” hazard.  The court then found that multiple policies were triggered by the asbestos-related suits and held in favor of the Insurers, applying the aggregate limits associated with the “completed operations” hazard.

Only the Westlaw citation is currently available at 2018 WL 6812527.

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