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Several Claims in Consolidated Action Dismissed Based Upon Statute of Limitations

Following W.R. Grace’s filing for bankruptcy in April 2001, a series of cases were filed against Maryland Casualty, which was the company’s primary general liability insurer from 1962 to 1973. Specifically, the twenty-nine plaintiffs in this matter filed a lawsuit relating to their diagnosis of asbestosis, in the District Court of Montana in November 2001. The plaintiffs originally named the State of Montana only. Maryland Casualty was named in March 2002. Additionally, seven of the twenty-nine plaintiffs had previously filed suit against Maryland Casualty, in June 2001. All cases against Maryland Casualty were stayed during the resolution of W.R. Grace’s bankruptcy. In January 2002, the Delaware Bankruptcy Court entered a preliminary injunction order which tolled the statute of limitations for claims against Maryland Casualty until the bankruptcy stay was lifted, which eventually occurred in February 2014.

The court applied Montana’s three year statute of limitations for the negligence and bad faith claims asserted against Maryland Casualty. The court stated that those claims accrued on the date the plaintiff was diagnosed with asbestosis, while for those plaintiffs who had passed, the wrongful death claims accrued on the date of death. Maryland Casualty argued in its motion to dismiss that thirteen plaintiffs’ claims accrued before January 22, 1999 and should therefore be dismissed because the statute of limitations for those claims expired before they were tolled by the January 2002 bankruptcy court order. The district court equitably tolled those claims because they had been timely filed in Baltimore, which constituted notice to Maryland Casualty.

The plaintiffs filed a seventh amended complaint approximately four months after the stay was lifted in 2014. The court found that for all but seven of the plaintiffs, the complaint was timely filed because the statute of limitations had been tolled while the preliminary injunction was in place. The court therefore dismissed the claims of seven of the plaintiffs and allowed the rest to proceed.

Only the Westlaw citation is currently available at 2019 WL 1317459.