Policyholder Cannot Target One Insurer with “Those Sums” language if Record Provides Factual Basis to Accurately Spread Between Triggered Years

In response to a certified question from an Ohio federal district court, the Ohio Supreme Court declined to equate policy language obligating AIG / National Union Fire Insurance Co. of Pittsburgh to pay “those sums” with policies that contain “all sums.”  Lubrizol Corp. sought to force AIG to pay a full $50M limit towards claims involving faulty pipe materials for property damage spanning multiple years even if the property damage was suffered during other policy years.

In previous cases involving asbestos and environmental damage, the Ohio Supreme Court permitted policyholders with “all sums” language to target a single policy year because it was not possible to accurately divide the damage or injuries among the triggered policies.  In Lubrizol, the Ohio Supreme Court distinguished these cases because the record contained sufficient evidence to allocate the loss to different policy years.

The opinion reasoned that Lubrizol’s claims did not involve “continuous and indivisible injury” and thus warranted a different outcome. “As National Union states, the time of damage is known or knowable. . . . it should be ascertainable how much resin was produced on a given date, how much resin was sold to IPEX, which lots of Kitec plumbing were produced on certain dates, when the Kitec plumbing was sold and installed, and when it failed. Under these circumstances, the operative contract language is not the reference to policy coverage for ‘those sums’ but rather to injury or damage ‘that takes place during the policy period. . . . In that circumstance, the insurer who provided coverage for that time period should be liable, to the extent of its coverage, for the claim.”

The Ohio Supreme Court returned the dispute to the federal trial court for further proceedings including the determination of the proper pro rata allocation between policy years.  The court opinion made special care to point out that the decision was narrowly based on the facts and did not represent a “bright-line rule based merely on a party’s use of the word ‘those’ instead of ‘all.'”  Lubrizol Advanced Materials Inc. v. National Union Fire Insurance Co. of Pittsburgh, Pa., No. 2018-1815, Slip Opinion No. 2020-Ohio-1579 (Ohio Apr. 23, 2020).