In re Wallace and Gale Co.
| Citation | 385 F.3d 820 |
| Decision Date | 06 October 2004 |
| Docket Number | No. 02-2427.,No. 02-2389.,02-2389.,02-2427. |
| Parties | In Re: THE WALLACE & GALE COMPANY, Debtor. Roy E. Jones; Andrew R. Youngbar; Louise Holcomb, Personal Representative of the Estate of Cossie Holcomb; Robert M. Barber, Personal Representative of the Estate of Milton Barber, Intervenors-Plaintiffs-Appellants, v. Liberty Mutual Insurance Company; Hartford Insurance Company; Continental Casualty Company; Adriatic Insurance Company; St. Paul Fire & Marine Insurance Company; Granite State Insurance Company; New Hampshire Insurance Company; Travelers Casualty And Surety Company, Defendants-Appellees, and The Wallace & Gale Company; Mayor Of Baltimore; City Council Of Baltimore City; American Employers Insurance Company; International Insurance Company, Defendants, The Aetna Casualty and Surety Company, Intervenor-Defendant. Porter Hayden Company; Official Committee Of Unsecured Creditors Of Porter Hayden; Official Committee Of Unsecured Creditors Of Acands, Incorporated; Acands, Incorporated; JT Thorpe Company; Celotex Asbestos Settlement Trust, Amici Supporting Appellant. Complex Insurance Claims Litigation Association; The American Insurance Association; Certain Underwriters At Lloyd's, London, Amici Supporting Appellee. In Re: The Wallace & Gale Company, Debtor. Roy E. Jones; Andrew R. Youngbar; Louise Holcomb, Personal Representative of the Estate of Cossie Holcomb; Robert M. Barber, Personal Representative of the Estate of Milton Barber, Intervenors-Plaintiffs, v. Travelers Casualty and Surety Company, Defendant-Appellant, v. Liberty Mutual Insurance Company, Defendant-Appellee, and The Wallace & Gale Company; Mayor Of Baltimore; City Council Of Baltimore City; Hartford Insurance Company; CNA-Continental Casualty Company; Adriatic Insurance Company; St. Paul Fire & Marine Insurance Company; American Employers Insurance Company; International Insurance Company; Granite State Insurance Company; New Hampshire Insurance Company, Defendants, The Aetna Casualty and Surety Company, Intervenor-Defendant. |
| Court | United States Courts of Appeals. United States Court of Appeals (4th Circuit) |
Appeal from the United States District Court for the District of Maryland, Peter J. Messitte, J.
ARGUED: Mark Herbert Kolman, Dickstein, Shapiro, Morin & Oshinsky, L.L.P., Washington, D.C., for Appellants.
Lee Hedgecock Ogburn, Kramon & Graham, P.A., Baltimore, MD; William Judkins Bowman, Hogan & Hartson, L.L.P., Washington, D.C.; Robert L. Hoegle, Carter, Ledyard & Milburn, L.L.P., Washington, D.C., for Appellees.
ON BRIEF: Jerold Oshinsky, Katherine J. Henry, Dickstein, Shapiro, Morin & Oshinsky, L.L.P., Washington, D.C.; James R. Matthews, Keating, Muething & Klekamp, L.L.P., Cincinnati, OH, for Appellants.
Steven M. Klepper, Kramon & Graham, P.A., Baltimore, MD; Jonathan S. Franklin, Hogan & Hartson, L.L.P., Washington, D.C.; Harry Lee, Steptoe & Johnson, L.L.P., Washington, D.C.; David M. Rice, Laurie J. Hepler, Carroll, Burdick & McDonough, L.L.P., San Francisco, CA; Robert M. Wright, William P. Pearce, Whiteford, Taylor & Preston, L.L.P., Baltimore, MD; Mary S. Diemer, Carter, Ledyard & Milburn, L.L.P., Washington, D.C., for Appellees.
Marc S. Mayerson, Robert E. Johnston, Spriggs & Hollingsworth, Washington, D.C., for Amicus Curiae Porter Hayden.
Philip E. Milch, Campbell & Levine, L.L.C., Pittsburgh, PA, for Amicus Curiae Creditors of Porter Hayden.
Armand J. Volta, Jr., Law Offices of Peter G. Angelos, Baltimore, MD, for Amicus Curiae Creditors of ACandS.
Mark A. Packman, Joel E. Greer, Gilbert, Heintz & Randolph, L.L.P., Washington, D.C., for Amici Curiae ACandS, et al.
Laura A. Foggan, John C. Yang, Amy K. Graham, Wiley, Rein & Fielding, L.L.P., Washington, D.C., for Amici Curiae Insurance Litigation Association, et al.
Thomas J. Quinn, Stephen T. Roberts, Mendes & Mount, L.L.P., New York, NY, for Amici Curiae Lloyd's, et al.
Before WIDENER and DUNCAN, Circuit Judges, and MICHAEL, Senior United States District Judge for the Western District of Virginia, sitting by designation.
Affirmed by published opinion. Judge Widener wrote the opinion, in which Judge Duncan and Senior Judge Michael concurred.
This appeal concerns insurers' liability for asbestos-related bodily injuries. The intervenors appeal from the district court's decision adopting what is called the pro-rata rule of Mayor & City Council of Baltimore v. Utica Mutual Insurance Co., 145 Md.App. 256, 802 A.2d 1070 (2002), and holding that the intervenors' claims are subject to an aggregate limit by reason of the "completed operations" provisions of the insurance policies. We affirm.
The intervenors in this case are four former employees or personal representatives of former employees of the Bethlehem Steel plant located in Baltimore, Maryland. The intervenors claim that they were injured by asbestos that was installed by Wallace & Gale Company. Wallace & Gale was an insulation contractor that installed asbestos-containing products for different businesses including Bethlehem Steel. In the early 1970's, Wallace & Gale halted its use of asbestos-containing products due to safety and health concerns. Wallace & Gale filed for bankruptcy in 1984, and numerous claimants, including the intervenors, have filed proofs of claim against Wallace & Gale for asbestos-related injuries.
During the time it installed asbestos-containing products, Wallace & Gale purchased comprehensive general liability insurance policies and excess liability insurance policies from the following insurers, Aetna Casualty & Surety Company, now known as Travelers Casualty & Surety Company (Travelers); Hartford Accident and Indemnity Company (Hartford); St. Paul Fire and Marine Insurance Company (St.Paul); Granite State Insurance Company (Granite); Continental Casualty Company (Continental); Riunione Adriatica Di Sicurta (Riunione); and New Hampshire Insurance Company (New Hampshire).1 (JA 1445, 1541-1547, 1549, 1560, 1577, 1592, 1607, 1622, 1637, 1652, 1682, 1717, 1750, 1787, 1841, 1878, 1894, 1921-1924, 191-1982, 2001-2002, 2007, 2033, 2095, 2111, 2145-2146, 2245-2547, 2549, 2574, 2606, 2619, 3325-3327) Under the plan adopted by the bankruptcy court, the proceeds from the insurance policies will be used to fund a trust to handle asbestos injury claims filed against Wallace & Gale. The amount that the insurers will be required to contribute to the trust depends on the interpretation of the insurance contracts and the outcome of this litigation.
In 1994, Travelers filed a declaratory judgment action, by way of an adversary proceeding within the Chapter 11 Bankruptcy case of Wallace & Gale against Wallace & Gale, the Mayor and City Council of Baltimore, and Wallace & Gale's other insurers. Travelers sought a judicial determination of the applicability and extent of coverage of insurance policies issued by Wallace & Gale's insurers. Through this action, Travelers sought to determine the extent of its liability, and the liability of other Wallace & Gale insurers, in a lawsuit brought against Wallace & Gale by the Mayor and City Council of Baltimore.
In March of 1995, the intervenors moved to intervene in the declaratory judgment action. The district court granted the motion. Before disposition of the claims of the intervenors, the claims brought by the Mayor and City Council of Baltimore settled. The intervenors' first amended complaint of December 29, 1999, raised two issues that are the subject of this appeal. In their first amended complaint, the plaintiffs raised the first issue by seeking a declaration
[t]hat each Policy triggered has an obligation to defend and indemnify Wallace & Gale for the full value of each individual claimant's damages subject only to the "per person" and "per occurrence" limits of those policies.
By seeking this declaration, the intervenors contended that the insurers are liable for "all sums" that are payable on asbestos claims for which Wallace & Gale is liable. Second, the intervenors asserted that their claims are not subject to the aggregate limit of the policies under the "general liability, negligence or other claims" provisions in the policies. We may refer to these two issues as the all sums or allocation issue and the completed operations issue in this opinion.
In response, the Wallace & Gale insurers argued that they are only liable under the comprehensive general liability insurance policies to pay for bodily injury that occurs during the policy period. Under this "pro rata" argument, the Wallace & Gale insurers would be liable only for a pro rata portion of the bodily injury that occurred during the time each insurer's policy was in place. For any bodily injury occurring during a time when the insured was self-insured or when the insured's policy contained, for example, an exclusion for the type of injury suffered by the intervenors, the insured would bear the risk of liability. On the completed operations issue, the Wallace & Gale insurers asserted that any injuries that occurred after Wallace & Gale completed its installation work with asbestos were subject to the aggregate limits of the policies under the completed operations hazard clauses in the policies.
In March of 2001, the intervenors filed a motion for summary judgment, and the Wallace & Gale insurers countered with a cross motion for summary judgment in April of 2001. The district court held a hearing on the motions for summary judgment on June 11, 2001. By their summary judgment motions, the parties sought a judicial determination of whether, as a matter of law, the Wallace & Gale insurers' exposure to the claims of the intervenors was limited by either the pro rata allocation of liability or the aggregate limits of liability triggered by the completed operations clauses in the insurance contracts. The district court took the motions under advisement at the conclusion of the hearing.
In February of 2002, the...
To continue reading
Request your trial
-
Allstate Ins. Co. v. Rochkind
...113 (citing Hanson , 169 Md. App. at 512, 902 A.2d at 168 (quoting Riley 161 Md. App. at 592, 871 A.2d at 611 ); In re Wallace & Gale Co. , 385 F.3d 820, 835 (4th Cir. 2004) (holding that after Utica , "the pro-rata allocation method is correct under Maryland law")). "Applying Maryland law,......
-
Allstate Ins. Co. v. Jam #32 Corp.
...allocation' of liability." Id. at 113 (citing Hanson, 169 Md. App. at 512, 902 A.2d at 168); see also In re Wallace & Gale Co., 385 F.3d 820, 835 (4th Cir. 2004) (holding that after Utica, "the pro-rata allocation method is correct under Maryland law"); Riley, 161 Md. App. at, 592, 871 A.2d......
-
Koch v. Specialized Care Services, Inc., Civil No. MJG-04-1395.
...state intermediate appellate court as an indication of how the state's highest court would decide the issue.16 In re Wallace and Gale Co., 385 F.3d 820, 830-31 (4th Cir.2004). This Court then must predict how the Maryland Court of Appeals would decide the issue by considering of the law, tr......
-
Rossello v. Zurich Am. Ins. Co.
...with the opportunity to adopt joint and several allocation twenty years ago, this Court chose not to do so. See In re Wallace & Gale Co. , 385 F.3d 820, 832 (4th Cir. 2004) ("While the question presented in [ Bausch & Lomb ] was not exactly the same as the issue here, it is similar and is a......
-
Was The Wallace & Gale Holding Rejected In The API Case?
...County, No. C9-02-8084, J. Finley Order dated May 13, 2004) as rejecting the Fourth Circuit's holding in In re Wallace & Gale Co.,385 F.3d 820 (4th Cir. 2004). The argument is incorrect for several reasons. First, Judge Finley's May 2004 decision in API did not even address the core hol......
-
San Francisco Trial Court Is First California Court To Adopt The Wallace & Gale Approach To Asbestos Operations
...as the "Wallace & Gale" issue among insurance lawyers, based on a Fourth Circuit decision In re Wallace & Gale Co. (4th Cir. 2004) 385 F.3d 820. The issue arises from the fact that many CGL policies, including Plant's policies, provide aggregate limits only for claims arising from c......
-
CHAPTER 5 Comprehensive or Commercial General Liability (CGL) Insurance: Coverage A for "Bodily Injury" or "Property Damage" Liabilities
...1999); Uniroyal, Inc. v. Home Insurance Co., 707 F. Supp. 1368, 1392 (E.D.N.Y. 1988). Fourth Circuit: In re Wallace & Gale Corp., 385 F.3d 820 (4th Cir. 2004); Lafarge Corp. v. National Union Fire Insurance Co., 935 F. Supp. 675, 687–688 (D. Md. 1996). Fifth Circuit: cf., Gulf Chemical & Me......
-
Chapter 5
...1999); Uniroyal, Inc. v. Home Insurance Co., 707 F. Supp. 1368, 1392 (E.D.N.Y. 1988). Fourth Circuit: In re Wallace & Gale Corp., 385 F.3d 820 (4th Cir. 2004); Lafarge Corp. v. National Union Fire Insurance Co., 935 F. Supp. 675, 687–688 (D. Md. 1996). Fifth Circuit: cf., Gulf Chemical & Me......
-
Insurance Recovery for Environmental Liabilities
...& Gale Co., 275 B.R. 223 (D. Md. 2002) (asbestos bodily injury), vacated in part on other grounds , 284 B.R. 557 (D. Md. 2002), aff’d , 385 F.3d 820 (4th Cir. 2004); Montrose Chem. Corp. , 913 P.2d at 893 (environmental contamination); Mayor & City Council of Baltimore v. Utica Mut. Ins. Co......