Opinion
2012-12-6
UNION CARBIDE CORPORATION, Plaintiff–Respondent, v. AFFILIATED FM INSURANCE COMPANY, et al., Defendants, Columbia Casualty Company, et al., Defendants–Appellants.
Litchfield Cavo LLP, New York City (Edward Fogarty, Jr. of counsel), Thomas M. Crawford, Brian M. Reid, Chicago, IL, of counsel, for Argonaut Insurance Company, defendant-appellant. Proskauer Rose LLP, Chicago, IL (Steven R. Gilford, sheri Drucker Davis of counsel), Matthew J. Morris, New York City, of counsel, and Kirkland & Ellis LLP, Chicago, IL (Michael P. Foradas, Nader Boulos of counsel), for Union Carbide Corporation, plaintiff-respondent.
Litchfield Cavo LLP, New York City (Edward Fogarty, Jr. of counsel), Thomas M. Crawford, Brian M. Reid, Chicago, IL, of counsel, for Argonaut Insurance Company, defendant-appellant. Proskauer Rose LLP, Chicago, IL (Steven R. Gilford, sheri Drucker Davis of counsel), Matthew J. Morris, New York City, of counsel, and Kirkland & Ellis LLP, Chicago, IL (Michael P. Foradas, Nader Boulos of counsel), for Union Carbide Corporation, plaintiff-respondent.
Carroll, Burdick & McDonough LLP, San Francisco, CA (G. David Godwin, Alan P. Jacobus, of counsel), and Ford, Marrin, Esposito, Witmeyer & Gleser LLP, New York City (Charles A. Booth, Catherine B. Altier, of counsel), for Continental Casualty Company and Columbia Casualty Company, defendants.
Smith, Stratton, Wise, Heher & Brennan LLP, Princeton, NJ (Patrick J. Dwyer of counsel), and Meckler, Bulger & Tilson, Chicago, IL (Scott M. Seaman, Julie Trester, Jason Schulze of counsel), for Affiliated FM Insurance Company and Appalachian Insurance Company, defendants.
Landman, Corsi, Ballaine & Ford PC, New York City (Michael Gioia of counsel), and Bates & Carey LLP, Chicago, IL (Maria G. Enriquez, David M. Alt of counsel), for American Reinsurance Company, defendant.
Jackson & Campbell, Washington, DC (Christopher Ferragamo, Donald L. Uttrich, German Gomez of counsel), for American Home Assurance Company, AIU Insurance Company, Birmingham Fire Insurance Company of Pennsylvania, Granite State Insurance Company, Lexington Insurance Company, National Union Fire Insurance Company of Pittsburgh, PA, New Hampshire Insurance Company, and L'Union Atlantique de Reassurances, defendants.
Tressler, Soderstrom, Maloney & Priess, Chicago, IL (Jim Pinderski, Heather Sullivan of counsel), for American Motorists Insurance Company and Lumbermens Mutual Casualty Company, defendants.
Riker, Danzig, Scherer, Hyland & Perretti LLP, Morristown, NJ (Shawn L. Kelly, Helen A. Franzese, Ronald D. Puhala of counsel), for Brittany Insurance Company and Companie Europeene D'Assurances Indus., defendants.
White & Williams LLP, Philadelphia, PA (Patricia B. Santelle, Thomas M. Going of counsel), for Central National Insurance Company of Omaha, defendant.
Christie, Pabarue, Mortensen & Young PC, Philadelphia, PA (John C. Falls, Marc D. Portlock of counsel), and Bradley J. Mortensen, New York City, of counsel, for Commercial Union Insurance Company (as successor to Employers Commercial Union Insurance Company, Employers Liability Assurance Corporation, and Employers Surplus Lines Insurance Company) and Seaton Insurance Company (f/k/a Unigard Mutual Insurance Company), defendants.
Willman & Arnold LLP, Pittsburgh, PA (R. Kenneth Willman, Nicholas J. Koch of counsel), for Employers Mutual Casualty Company, defendant.
Skadden, Arps, Slate, Meagher & Flom LLP, New York City (Michael J. Balch of counsel), for General Reinsurance Corporation and North Star Reinsurance Corporation, defendants.
Rivkin Radler LLP, Uniondale, NY (M. Paul Gorfinkel of counsel), for Sentry Insurance Company as Assumptive Reinsurer of Great Southwest Fire Insurance Company, defendant.
Steptoe & Johnson LLP, Washington, DC (James E. Rocap, III, Frank Winston, John Casciano of counsel), for St. Paul Travelers Insurance Company, defendant.
Kral, Clerkin, Redmond, Ryan, Perry & Girvan LLP, Mineola, NY (Leonard Porcelli of counsel), for National Casualty Company, defendant.
Melito & Adolfsen, New York City (Louis G. Adolfsen, Steven G. Adams of counsel), for Atlanta International Insurance Company, defendant.
Hughes, Socol, Piers, Resnick & Dym, Ltd., Chicago, IL (Robert R. Anderson, III, Daniel Waitzman of counsel), and Law Offices of John W. DeBlasio, PC, Ronkonkoma, NY (John W. DeBlasio of counsel), for Allstate Insurance Company as successor-in-interest to Northbrook Excess & Surplus Insurance Company, f/k/a Northbrook Insurance Company, defendant.
Merlo, Kanofsky, Brinkmeier & Gregg, Ltd., Chicago, IL (Michael R. Gregg, Thomas D. Donofrio of counsel), and Hardin, Kundla, McKeon & Poletto, PA, New York City (Stephen P. Murray of counsel), for Mt. McKinley Insurance Company and Everest Reinsurance Company.
Mendes & Mount LLP, New York City (Thomas J. Quinn, Heather K. Calvano of counsel), for Allianz International Insurance Company Ltd., Allianz Versicherungs Aktiengesellschaft A.G., Ancon Insurance Company (UK) Ltd., Chemical Insurance Company, Compagnie d'Assurances Maritimes Aerinnes et Terrestres, Compagne belge d'Assurances Generales, Eisen Und Stahl Ruckversicherungs, Heddington Insurance (UK) Ltd., Highlands Insurance Company (UK) Ltd., Insco Ltd., Italia Assicurazioni, La Preservatrice, Mitsui Sumitomo Insurance Company (Europe) Ltd., (f/k/a Taisho Marine & Fire Insurance Company), Nisshin Fire & Marine Insurance Company Ltd., Reaseguradora Nacional SA, Royale Belge SA, Storebrand Insurance Company (UK) Ltd., and Tokio Marine & Fire Insurance Company (UK), defendants.
GONZALEZ, P.J., SWEENY, RICHTER, ROMÁN, CLARK, JJ.
Order, Supreme Court, New York County (Charles E. Ramos, J.), entered January 4, 2011, which granted plaintiff's motion for partial summary judgment striking defendant Argonaut Insurance Company's defense that there should be no insurance coverage because plaintiff expected or intended the bodily injury claims that resulted from exposure to its asbestos products, and denied Argonaut's motion for summary judgment on the same issue, unanimously affirmed, with costs.
Plaintiff met its burden of establishing that the damages at issue were the result of an “occurrence” and thus that defendant's policy provided coverage ( see Consolidated Edison Co. of N.Y. v. Allstate Ins. Co., 98 N.Y.2d 208, 220, 746 N.Y.S.2d 622, 774 N.E.2d 687 [2002] ). Indeed, the record supports plaintiff's contention that, although it was aware of some risk involved in the utilization of asbestos, at all times relevant to this appeal, it believed that its asbestos products could be used safely under the right conditions. Plaintiff also offered, as further proof of any lack of intent, evidence that it published regulatory information in trade periodicals and provided information regarding the dangers of asbestos, as well as guidance concerning its proper usage, to its clients and potential customers ( see Santoro ex rel. Santoro v. Donnelly, 340 F.Supp.2d 464, 486 [S.D.N.Y.2004] [New York law presumes that users will heed warnings provided with a product] ). In addition, plaintiff presented evidence that, during the relevant time period, the federal government shared plaintiff's belief that asbestos could be used safely and, to that end, promulgated regulations designed to control, monitor and record asbestos usage—but, importantly, did not ban it.
Since plaintiff established coverage, the burden shifted to defendants to show that, pursuant to the policy's exclusion, plaintiff intended the damages ( see Consolidated Edison, 98 N.Y.2d at 220, 746 N.Y.S.2d 622, 774 N.E.2d 687;Continental Cas. Co. v. Rapid–American Corp., 80 N.Y.2d 640, 649, 593 N.Y.S.2d 966, 609 N.E.2d 506 [1993] ). Defendants have failed in this regard. Defendants asserted that plaintiff intended the damages because it knew that asbestos would cause injuries and that claims would be filed against it. The record, however, shows that plaintiff was merely aware that asbestos could cause injuries and that claims could be filed. Plaintiff's “calculated risk” in manufacturing and selling its products despite its awareness of possible injuries and claims does not amount to an expectation of damage ( Continental Cas., 80 N.Y.2d at 649, 593 N.Y.S.2d 966, 609 N.E.2d 506).
Defendants' collateral estoppel argument based on a California jury verdict also fails. The nature of the jury instructions in the California case renders it impossible to discern exactly which facts, or acts of plaintiff, played a part in the jury's decision, or upon exactly which portion of the jury instruction (i.e., malice, oppression or fraud) the jury based its punitive damages award. As such, defendants cannot show an “an identity of issue which has necessarily been decided in the prior action and is decisive of the present action” ( Schwartz v. Public Adm'r of County of Bronx, 24 N.Y.2d 65, 71, 298 N.Y.S.2d 955, 246 N.E.2d 725 [1969] ).
We have considered defendants' remaining arguments and find them unavailing.