Judge gavel with lawyer and attorney meeting in law firm background. Concepts of law, legal advice,legal services.

Federal District Court Declines to Guess at Ohio Law, Applies Continuous Trigger

WISCONSIN – The Eastern District of Wisconsin ruled this week that a continuous trigger and all-sums allocation applied in a dispute between an Eaton Corporation — sued in a large number of personal injury cases based on exposure to asbestos through products manufactured by Cutler-Hammer, Inc., which Eaton acquired by merger in 1979 — and its excess insurers.

The parties recognized that Wisconsin has adopted both continuous trigger and all-sums allocation in asbestos cases. However, the defendants contended that their policies were governed by Ohio law. Ohio has adopted all-sums allocation, but no Ohio court has ruled on the trigger of coverage in a long-tail injury case. Thus, it is possible that Ohio would adopt an injury-in-fact theory under which the only policy triggered would be the one in force when the effects of the claimant’s exposure resulted in actual and compensable injury. The defendants contended that general principles of insurance policy interpretation used in Ohio would lead the Ohio Supreme Court to adopt an injury-in-fact trigger.

The court disagreed. The court first observed that it did not need to engage in a conflict-of-laws analysis where the forum state (Wisconsin) had ruled on the trigger issue and the other state (Ohio) had not.  Due to the fact that Ohio courts had not ruled on the issue, there was no actual conflict between the laws of Wisconsin and Ohio. The court declined to create a new conflict by guessing at how the Ohio Supreme Court would rule if confronted with the trigger issue. Moreover, the general principles of insurance policy interpretation adopted by Ohio courts and cited by the defendants were the same as the principles applied by Wisconsin courts.

Even applying such principles, the Wisconsin Supreme Court had adopted a continuous trigger theory. Thus, the court was not persuaded that the Ohio Supreme Court would adopt an injury-in-fact trigger.

As a result, the court applied settled Wisconsin law adopting a continuous trigger theory and all-sums allocation. All of the policies in place from the time of the underlying claimants’ first exposure to the time their injuries manifested were triggered, and each insurer’s policy provided coverage up to its policy limit.

Read the case decision here.