Imo Indus. Inc. v. Transamerica Corp.

• Citation: 437 N.J.Super. 577,101 A.3d 1085
• Court: New Jersey Superior Court – Appellate Division
• Decision Date: 30 September 2014
• Parties: IMO INDUSTRIES INC., Plaintiff–Appellant/Cross–Respondent, v. TRANSAMERICA CORPORATION, TIG Insurance Company, f/k/a Transamerica Insurance Company, A.C.E. Insurance Company, Ltd., The Central National Insurance Company of Omaha, Insurance Company of North America, ACE Ltd., as successor-in-interest to Insurance Company of North America, Industrial Underwriters Insurance Company, Certain Underwriters at Lloyd's of London, Certain London Market Insurance Companies, Pacific Employers Insurance Company, Service Fire Insurance Company, Zurich American Insurance Company, Zurich American Insurance Company of Illinois, as successor-in-interest to Zurich American Insurance Company, American Zurich Insurance Company, as successor-in-interest to Zurich American Insurance Company, Zurich Insurance Company, as successor-in-interest to Zurich American Insurance Company, Zurich International Ltd., Zurich Insurance Group, as successor-in-interest to Zurich International Ltd., ACE Property & Casualty Insurance Company, as successor-in-interest to Aetna Insurance Company, Defendants–Respondents/Cross–Appellants, and Pyramid Insurance Company of Bermuda, Ltd., a/k/a Pyramid Insurance Company, Ltd., Aetna Casualty and Surety COMPANY, a/k/a Travelers Casualty and Surety Company, Travelers Casualty and Surety Company f/k/a Aetna Casualty and Surety Company, Travelers Property Casualty Corp., as successor-in-interest to Aetna Casualty and Surety Company and Travelers Casualty and Surety Company, Fireman's Fund Insurance Company, Interstate Fire and Casualty Company, Puritan Insurance Company, Westport Insurance Corporation, as successor-in-interest to Puritan Insurance Company, Transport Indemnity Company, Mission American Insurance Company, as successor-in-interest to Transport Indemnity Company, Associated International Insurance Company, Integrity Insurance Company, The New Jersey Property–Liability Guaranty Association on behalf of Integrity Insurance Company in insolvency, Midland Insurance Company, The New Jersey Property–Liability Guaranty Association on behalf of Midland Insurance Company in insolvency, Mission Insurance Company, The New Jersey Property–Liability Guaranty Association on behalf of Mission Insurance Company in insolvency, Western Employers Insurance Company, The New Jersey Property–Liability Guaranty Association on behalf of Western Employers Insurance Company in insolvency, Yosemite Insurance Company, Defendants–Respondents, and Allianz Underwriters, Inc., Allianz Underwriters Insurance Company, as successor-in-interest to Allianz Underwriters, Inc., Allianz Global Risks U.S. Insurance Company, as successor-in-interest to Allianz Underwriters Insurance Company, American Bankers Insurance Company of Florida, American Empire Surplus Lines Insurance Company, as successor-in-interest to Great American Surplus Lines Insurance Company, American Empire Surplus Lines Insurance Company, XL Insurance Company, L.T.D., as successor-in-interest to American Excess Insurance Company, American Home Assurance Company, American Re–Insurance Company, American International Underwriters, AIU Insurance Company, as successor-in-interest to American International Underwriters, American International Group, as successor-in-interest to AIU Insurance Company, Employers Mutual Casualty Company, Federal Insurance Company, First State Insurance Company, Granite State Insurance Company, Great American Surplus Insurance Company, City Insurance Company, The Home Insurance Company, as successor-in-interest to City Insurance Company, Columbia Casualty Company, Covenant Mutual Insurance Company, Covenant Insurance Company, as successor-in-interest to Covenant Mutual Insurance Company, Great American Surplus Insurance Company, City Insurance Company, The Home Insurance Company, as successor-in-interest to City Insurance Company, Columbia Casualty Company, Covenant Mutual Insurance Company, Covenant Insurance Company, as successor-in-interest to Covenant Mutual Insurance Company, Greenwich Insurance Company, as successor-in-interest to Harbor Insurance Company, Harbor Insurance Company, International Surplus Lines Insurance Company, International Insurance Company, as successor-in-interest to International Surplus Lines Insurance Company, Crum and Forster Insurance Company, as successor-in-interest to International Surplus Lines Insurance Company, Highlands Insurance Company, Hudson Insurance Company, The Insurance Company of the State of Pennsylvania, Landmark Insurance Company, Lexington Insurance Company, National Casualty Company, National Union Fire Insurance Company of Pittsburgh, PA, Northbrook Indemnity Company, Allstate Insurance Company, as successor-in-interest to Northbrook Indemnity Company, Royal Insurance Company, Royal Insurance Company of America, as successor-in-interest to Royal Insurance Company, Royal Indemnity Company, as successor-in-interest to Royal Insurance Company, Royal Indemnity Company, X.L., Reinsurance America, Inc., as successor-in-interest to Service Fire Insurance Company, National American Insurance Company of California, as successor-in-interest to Mission American Insurance Company, Premier Insurance Company, S & H Insurance Company, National Farmers Union Property and Casualty Company, as successor-in-interest to S & H Insurance Company, Transamerica Premier Insurance Company, as successor-in-interest to Premier Insurance Company, TIG Premier Insurance Company, as successor-in-interest to Transamerica Premier Insurance Company, Transcontinental Insurance Company, Defendants.

437 N.J.Super. 577
101 A.3d 1085

IMO INDUSTRIES INC., Plaintiff–Appellant/Cross–Respondent,
v.
TRANSAMERICA CORPORATION, TIG Insurance Company, f/k/a Transamerica Insurance Company, A.C.E. Insurance Company, Ltd., The Central National Insurance Company of Omaha, Insurance Company of North America, ACE Ltd., as successor-in-interest to Insurance Company of North America, Industrial Underwriters Insurance Company, Certain Underwriters at Lloyd's of London, Certain London Market Insurance Companies, Pacific Employers Insurance Company, Service Fire Insurance Company, Zurich American Insurance Company, Zurich American Insurance Company of Illinois, as successor-in-interest to Zurich American Insurance Company, American Zurich Insurance Company, as successor-in-interest to Zurich American Insurance Company, Zurich Insurance Company, as successor-in-interest to Zurich American Insurance Company, Zurich International Ltd., Zurich Insurance Group, as successor-in-interest to Zurich International Ltd., ACE Property & Casualty Insurance Company, as successor-in-interest to Aetna Insurance Company, Defendants–Respondents/Cross–Appellants,
and
Pyramid Insurance Company of Bermuda, Ltd., a/k/a Pyramid Insurance Company, Ltd., Aetna Casualty and Surety COMPANY, a/k/a Travelers Casualty and Surety Company, Travelers Casualty and Surety Company f/k/a Aetna Casualty and Surety Company, Travelers Property Casualty Corp., as successor-in-interest to Aetna Casualty and Surety Company and Travelers Casualty and Surety Company, Fireman's Fund Insurance Company, Interstate Fire and Casualty Company, Puritan Insurance Company, Westport Insurance Corporation, as successor-in-interest to Puritan Insurance Company, Transport Indemnity Company, Mission American Insurance Company, as successor-in-interest to Transport Indemnity Company, Associated International Insurance Company, Integrity Insurance Company, The New Jersey Property–Liability Guaranty Association on behalf of Integrity Insurance Company in insolvency, Midland Insurance Company, The New Jersey Property–Liability Guaranty Association on behalf of Midland Insurance Company in insolvency, Mission Insurance Company, The New Jersey Property–Liability Guaranty Association on behalf of Mission Insurance Company in insolvency, Western Employers Insurance Company, The New Jersey Property–Liability Guaranty Association on behalf of Western Employers Insurance Company in insolvency, Yosemite Insurance Company, Defendants–Respondents,
and
Allianz Underwriters, Inc., Allianz Underwriters Insurance Company, as successor-in-interest to Allianz Underwriters, Inc., Allianz Global Risks U.S. Insurance Company, as successor-in-interest to Allianz Underwriters Insurance Company, American Bankers Insurance Company of Florida, American Empire Surplus Lines Insurance Company, as successor-in-interest to Great American Surplus Lines Insurance Company, American Empire Surplus Lines Insurance Company, XL Insurance Company, L.T.D., as successor-in-interest to American Excess Insurance Company, American Home Assurance Company, American Re–Insurance Company, American International Underwriters, AIU Insurance Company, as successor-in-interest to American International Underwriters, American International Group, as successor-in-interest to AIU Insurance Company, Employers Mutual Casualty Company, Federal Insurance Company, First State Insurance Company, Granite State Insurance Company, Great American Surplus Insurance Company, City Insurance Company, The Home Insurance Company, as successor-in-interest to City Insurance Company, Columbia Casualty Company, Covenant Mutual Insurance Company, Covenant Insurance Company, as successor-in-interest to Covenant Mutual Insurance Company, Great American Surplus Insurance Company, City Insurance Company, The Home Insurance Company, as successor-in-interest to City Insurance Company, Columbia Casualty Company, Covenant Mutual Insurance Company, Covenant Insurance Company, as successor-in-interest to Covenant Mutual Insurance Company, Greenwich Insurance Company, as successor-in-interest to Harbor Insurance Company, Harbor Insurance Company, International Surplus Lines Insurance Company, International Insurance Company, as successor-in-interest to International Surplus Lines Insurance Company, Crum and Forster Insurance Company, as successor-in-interest to International Surplus Lines Insurance Company, Highlands Insurance Company, Hudson Insurance Company, The Insurance Company of the State of Pennsylvania, Landmark Insurance Company, Lexington Insurance Company, National Casualty Company, National Union Fire Insurance Company of Pittsburgh, PA, Northbrook Indemnity Company, Allstate Insurance Company, as successor-in-interest to Northbrook Indemnity Company, Royal Insurance Company, Royal Insurance Company of America, as successor-in-interest to Royal Insurance Company, Royal Indemnity Company, as successor-in-interest to Royal Insurance Company, Royal Indemnity Company, X.L., Reinsurance America, Inc., as successor-in-interest to Service Fire Insurance Company, National American Insurance Company of California, as successor-in-interest to Mission American Insurance Company, Premier Insurance Company, S & H Insurance Company, National Farmers Union Property and Casualty Company, as successor-in-interest to S & H Insurance Company, Transamerica Premier Insurance Company, as successor-in-interest to Premier Insurance Company, TIG Premier Insurance Company, as successor-in-interest to Transamerica Premier Insurance Company, Transcontinental Insurance Company, Defendants.

Superior Court of New Jersey, Appellate Division.

Argued March 31, 2014
Decided Sept. 30, 2014

Affirmed.

[101 A.3d 1090]

Robin L. Cohen and Kenneth H. Frenchman of the New York bar, admitted pro hac vice, argued the cause for appellant/cross-respondent IMO Industries Inc. (DeCotiis, FitzPatrick & Cole, L.L.P., Kasowitz, Benson, Torres & Friedman, L.L.P., Steven J. Roman (Dickstein Shapiro, L.L.P.) of the D.C. bar, admitted pro hac vice, and Mr. Frenchman, attorneys; Mr. Roman, Jeffrey D. Smith, Ms. Cohen and Elizabeth A. Sherwin, on the brief).

Sherilyn Pastor argued the cause for respondent/cross-appellant Transamerica Corporation (McCarter & English, L.L.P., attorneys; Ms. Pastor and Gregory H. Horowitz, of counsel and on the brief; Nicholas M. Insua, Adam J. Budesheim, Stephanie Platzman–Diamant, and Mark D. Villanueva, on the brief).

Shawn L. Kelly argued the cause for respondent/cross-appellant TIG Insurance Company (Riker Danzig Scherer Hyland & Perretti, L.L.P., attorneys; Mr. Kelly, Ronald Puhala, Sigrid S. Franzblau and Richard C. Kielbania, of counsel and on the brief).
Mark D. Hoerrner argued the cause for respondent Pyramid Insurance Company, Ltd. (Budd Larner, P.C., attorneys; Mr. Hoerrner, Marc I. Bressman and David I. Satine, on the brief).
Patricia B. Santelle argued the cause for respondents/cross-appellants ACE Property & Casualty Insurance Company, Century Indemnity Company, Central National Insurance Company of Omaha, Industrial Underwriters Insurance Company, Pacific Employers Insurance Company, and Service Fire Insurance Company (White and Williams L.L.P., attorneys; Ms. Santelle, Gregory S. Capps, and Paul A. Briganti, on the brief).
Mark J. Leimkuhler (Lewis Baach, P.L.L.C.) of the D.C. bar, admitted pro

[101 A.3d 1091]

hac vice, argued the cause for respondents/cross-appellants London Market Insurers (Tompkins, McGuire, Wachenfeld & Barry, L.L.P., and Mr. Leimkuhler, attorneys; Mr. Leimkuhler, of counsel and on the brief; Aisha E. Henry (Lewis Baach, P.L.L.C.) of the D.C. bar, admitted pro hac vice, and Matthew P. O'Malley, on the brief).
Michael A. Kotula argued the cause for respondents Fireman's Fund Insurance Company, Interstate Fire & Casualty Company and Westport Insurance Corporation (Rivkin Radler, L.L.P., attorneys; Mr. Kotula and Lawrence A. Levy of the New York bar, admitted pro hac vice, on the brief).
Coughlin Duffy, L.L.P. and John K. Daly (Meckler Bulger Tilson Marick & Pearson, L.L.P.) of the Illinois bar, admitted pro hac vice, attorneys for respondents/cross-appellants Zurich American Insurance Company and Zurich International (Bermuda), Ltd. (Robert J. Re and Mr. Daly, of counsel and on the brief; Maida Perez, on the brief).
L'Abbate, Balkan, Colavita & Contini, L.L.P., attorneys for respondent Transport Insurance Company (Gretchen B. Connard and John D. McKenna, on the brief).
Ford Marrin Esposito Witmeyer & Gleser, L.L.P., attorneys for respondent Travelers Casualty & Surety Company (James M. Adrian and Kenneth D. Walsh, on the brief).
Locke Lord L.L.P., attorneys for respondent CX Reinsurance Company Limited (Richard I. Scharlat, on the brief).
Norris McLaughlin & Marcus, P.A., attorneys for amicus curiae Independent Energy Producers of New Jersey (Robert Mahoney, on the brief).
Before Judges YANNOTTI, ASHRAFI, and ST. JOHN.

The opinion of the court was delivered by

ASHRAFI, J.A.D.

Several parties appeal from a final judgment determining insurance coverage for asbestos-related personal injury claims. Plaintiff IMO Industries, Inc. is the insured and the successor to a manufacturer of industrial products that contained asbestos. Defendants are primary and excess liability insurers, as well as Transamerica Corporation, the former parent company of the predecessor manufacturer.

Over the years, IMO purchased a total of $1.85 billion in insurance coverage from all the defendant insurers. That amount is sufficient to pay for its anticipated liabilities and defense costs for asbestos-related personal injury claims. Nonetheless, IMO initiated this litigation to establish its rights under those insurance policies and to recover money damages.

Among many issues and topics, the appeals present some questions that have not been previously addressed in the New Jersey Supreme Court's insurance allocation decisions for so-called long-tail environmental losses, beginning...