Opinion
C.A. No.: 02C-11-237 SCD.
Submitted: June 4, 2004.
Decided: July 13, 2004.
Upon Consideration of Hercules' Motion for Partial Summary Judgment that Certain Multi-Year Policies have Annual Occurrence Limits — GRANTED
OPINION
Hercules Incorporated ("Hercules") seeks coverage for numerous asbestos-related products liability claims. This coverage claim is focused on excess insurance providers, the primary coverage having been, or about to be exhausted.
Hercules has filed a motion for partial summary judgment directed to policies sold to Hercules or Haveg by certain underwriters at Lloyd's, London and certain London Market Insurance Companies, North River Insurance Company and OneBeacon (collectively as the "defendants").
Hercules seeks a determination that though the policies in question provide coverage for more than one year, there are annual occurrence limits for each year that the policy is in effect, as opposed to one occurrence limit for the entire multi-year period.
The legal standard applicable to the interpretation of insurance policies is set forth in a previous decision and will not be repeated here. Because the policy provisions are unambiguous, I give no consideration to extrinsic evidence.
Hercules, Inc. v. OneBeacon America Ins. Co., et al., Del. Super., C.A. No. 02C-11-237, Del Pesco J. (Jan. 22, 2004).
The declaration sheet of the LMI policy no. 1065/D5608 provides with regard to the limits of liability "(a) Limit in all in respect of each occurrence = US $10,000,000; (b) Limit in the aggregate for each annual period where applicable = US $10,000,000." That provision relates to the Limits of Liability portion of the policy which covers various types of coverage, and specifies that the limits "[i]n respect of Products Liability U.S. $2,000,000 ultimate net loss in the aggregate in any one policy year."
LMI Policy No. 1065/D 5608 at HPC 0007203. (emphasis supplied)
Id. at HPC 0007204.
Similarly, the LMI policy issued to Haveg provides on the declaration page for "$5,000,000 annual aggregate Products." The Limit of Liability provision provided the same sum "in the aggregate for each annual period during the currency of this Policy separately in respect of Products Liability. . . ."
LMI Policy No. CU 2777 at HERC 0001917.
Id. at HERC 0001919.
North River policy JU 0040 provides "$18,000,000 Ultimate Net Loss collectively in the aggregate where applicable for each policy year for the products [coverage], . . . ." Other North River policies specifically provide limits for annual periods for products coverage.
North River Policy No. JU 0040 at HPC 0007780.
See North River Policy No. JU 0306 at HPC 0007835-36; North River Policy No. JU 0833 at HPC 0008000.
The OneBeacon policy S10089, which is representative, provides:
II. Limit of Liability
The Company shall only be liable for the ultimate net loss in excess of either —
(a) the amount recoverable under underlying insurance as set out in the declarations, or
(b) $25,000 ultimate net loss in respect of each occurrence not covered by said underlying insurances, (hereinafter called the "underlying limits"):
and then only up to a further $2,000,000 in all in respect of each occurrence — subject to a limit of $2,000,000 in the aggregate for each annual period during the currency of this Policy, separately in respect of Products Liability and in the respect of Personal Injury. . . .
Employers Surplus Lines Insurance Company Policy No. S-10089 at HERC 0001932.
LMI and North River acknowledge that if Hercules' asbestos products liability are multiple occurrences under the terms of the policies, then Hercules is entitled to the annual aggregate limits for products liability claims provided for in the policies.
OneBeacon argues that its policies have two separate limits of liability: (1) a single per occurrence limit that applies to the policy term, and (2) an aggregate limit for multiple occurrences of Products Liability losses that apply each year. It interprets the various policy provisions, in total, to yield the conclusion that there is a single limit of liability per occurrence for the policy term, regardless of the type of risk at issue. Stated differently, defendants argue that "products liability claims that qualify as a single occurrence are subject to the single per-occurrence limit, just [like] the environmental claims at issue in the prior litigation." OneBeacon's argument is primarily rooted in the policy language that the each occurrence limits are "subject to a limit of $2,000,000 in the aggregate for each annual period during the currency of this Policy, separately in respects of Products Liability. . . ." OneBeacon's analysis renders meaningless the reference to annual limits for product liability. The "subject to" language expands the $2,000,000 coverage in the case of product liability claims — to annual limits, not aggregate limits.
Def. Certain Underwriters at Lloyd's London and North River's Ans. Br. at p. 8.
Def. OneBeacon's Ans. Br. at p. 8.
The same or substantially similar policies of insurance were examined by the Supreme Court in Hercules, Inc. v. AIU Ins. Co., That case involved a claim of property damage at a site in Jacksonville, Arkansas. The jury determined that Hercules was liable for property damage that was the result of one occurrence, as defined by the policies. The Supreme Court reviewed the trial court's determination that liability limits contained in the multi-year policies were per occurrence limits, not annual limits. The Court concluded:
784 A.2d 481 (Del. 2001).
Our holding is based on unambiguous language in the policies. The policies provide for two different types of limits depending on the type of damage for which recovery is sought. With respect to "Products Liability," and "Personal Injuries," there is a limit "in the aggregate for each annual period." With respect to "Automobile Liability," "Aircraft Liability," and "all [other] occurrences" there is a limit "in all in respect of each occurrence." . . . This language setting forth the occurrence limits unambiguously provides for annual limits in some cases and per occurrence limits in others."
Id. at 495. (citations omitted).
I conclude that in the context of these product liability claims, there are annual occurrence limits for each year that the policy is in effect, as opposed to one occurrence limit for the entire multi-year period. Any other conclusion would require this Court to ignore the various references in the policies to annual limits for products liability, and to ignore the prior ruling of the Supreme Court in the related litigation. "Clear and unambiguous language in an insurance policy should be given its ordinary and usual meaning."
Rhone-Poulenc v. American Motorists Ins. Co., 616 A.2d 1192, 1195 (Del. 1992).
Summary Judgment is GRANTED in favor of Hercules, and against the various insurers.
IT IS SO ORDERED.