Insurer’s intention to replace existing asbestos counsel did not create a conflict of interest A Massachusetts appeals court reversed an order that Celanese Corp. was entitled to reimbursement of approximately $2.4M of asbestos and toxic tort defense costs from OneBeacon because Celanese refused to allow OneBeacon to control its defense. The parties had a long-term “cost-sharing” agreement in which the... Read More

No duty to defend based on Absolute Pollution Exclusion. The Doe Run Resources Corporation (“Doe Run”) was sued by plaintiffs allegedly injured by toxic pollution released from Doe Run’s smelting facility in La Oroya, Peru.  The underlying lawsuits claim that Doe Run released harmful substances, such as lead, into the environment.  The contaminants allegedly permeated the surrounding air and water... Read More

Pollution exclusions inapplicable because no intent by policyholder or its predecessors to contaminate Passaic River The EPA oversees remediation of the Lower Passaic River Restoration Project, a Superfund Site.  In 2010, the EPA named Cooper Industries, LLC (“Cooper”) a potentially responsible party (“PRP”).  Cooper’s potential liability arose from its 1985 acquisition of companies that had historical operations at or near... Read More

Unreliable Expert Testimony Not Admissible to Prove “Sudden and Accidental” Discharge – Summary Judgment for Insurer An Illinois federal court, applying Illinois law, granted summary judgment in favor of an insurer finding that a pollution exclusion applied to bar coverage for groundwater contamination claims.  The insured sought to prove through expert testimony that the discharges that resulted in the contamination... Read More

“All Sums” Applied Rejecting “During the Policy Period” Approach; Vertical Exhaustion Finding “Other Insurance” Clauses Ambiguous A Missouri appellate court, applying Missouri law, upheld the lower court’s ruling which provided for “all sums” allocation and vertical exhaustion based on the policy language at issue.  The appellate court found that the policies included the requisite “all sums” language that did not... Read More

Proof of Insurer’s Subjective Intent Not a Prerequisite to Bad Faith The Pennsylvania Supreme Court, applying Pennsylvania law, held that in order to recover in a bad faith action under Pennsylvania’s bad faith statute there must be clear and convincing evidence:  (1) that the insurer did not have a reasonable basis for denying benefits under the policy, and (2) that... Read More

Rejects Pro Rata Allocation Because Not Specifically Provided in Policy / Missing Pollution Exclusion Not Mutual Mistake A Georgia federal court, applying Georgia law, held that an insurer did not present “clear, unequivocal and decisive” evidence to establish that it was a mutual mistake that a pollution exclusion was left off its policy.  The court found no other applicable policy... Read More

Declines to apply an “integrated system” property damage analysis and finds “Your Products” exclusion ambiguous   The Seventh Circuit, applying Wisconsin law, reversed a district court’s ruling and held that claims arising from defective windows triggered the insurers’ duty to defend.  The Seventh Circuit found that, because the defective window claims sought compensation for the repair or replacement of individual... Read More

Fumes in boat wheelhouse satisfies release into “atmosphere” requirement    The Eighth Circuit, applying Minnesota law, affirmed the district court’s ruling and held that the pollution exclusion found in a marine general liability policy excluded coverage for carbon monoxide poisoning caused by an engine malfunction on a boat. Christopher Klick was seriously injured after suffering carbon monoxide poisoning while aboard a... Read More

Factual questions exist as to exhaustion of all primary coverage, notice and applicability of pollution exclusions An Illinois federal court, applying Illinois law, denied an insurer’s motion for summary judgment and found that there were multiple issues of material fact which precluded granting the motion.  In its motion for summary judgment, the insurer argued: (1) the insured did not prove... Read More