On April 4, 2016, Exxon Mobil Corporation brought suit against Lockheed Martin Corporation, seeking a declaration that the 1963 asset purchase agreement between Martin-Marietta, Lockheed’s predecessor, and Mobil Finishes does not give rise to an obligation to pay or reimburse costs that Lockheed Martin allegedly incurred or may incur with regards to alleging asbestos bodily injury claims against Lockheed or its predecessor.
This suit arises out of a letter in February sent from claims administrator Resolute Management Inc. seeking $16 million to cover costs of defending and settling asbestos claims related to Exxon’s “Dum Dum” product line. According to the suit, however, Lockheed had never sought payment for these costs in more than 50 years prior to February.
Furthermore, the suit alleges that Resolute and Lockheed incorrectly cited a provision in the July 1963 sale agreement, arguing that the provision “shows no indication (express or implied) that the parties ever intended ExxonMobil or its predecessor to take on such sweeping indemnity obligations. . . . Moreover, in the 50-plus years after the contract was executed, and through decades of defending itself against thousands of such asbestos lawsuits, Lockheed Martin has never once made reference to—much less sought to exercise—this supposed contractual right to indemnity or defense. Until now.”