Armstrong World Industries, Inc. v. Aetna Casualty & Surety Co.
Decision Date | 30 April 1996 |
Docket Number | A049654,A049631,A049663,A049661,Nos. A049419,A049659,s. A049419 |
Citation | Armstrong World Industries, Inc. v. Aetna Casualty & Surety Co., 52 Cal.Rptr.2d 690, 45 Cal.App.4th 1 (Cal. App. 1996) |
Court | California Court of Appeals |
Parties | , 96 Cal. Daily Op. Serv. 3058, 96 Daily Journal D.A.R. 5048 ARMSTRONG WORLD INDUSTRIES, INC., Plaintiff, Cross-Defendant and Respondent, v. AETNA CASUALTY & SURETY CO. et al., Defendants and Appellants; Reliance Insurance Company, Defendant, Cross-Complainant and Appellant. FIBREBOARD CORPORATION, Cross-Complainant and Respondent, v. PACIFIC INDEMNITY COMPANY et al., Cross-Defendants and Appellants. GAF CORPORATION, Plaintiff, Appellant and Respondent, v. COLUMBIA CASUALTY COMPANY et al., Defendants, Appellants and Respondents. to A049672, A049808 and A049875. |
Richard J. Doren, Fred F. Gregory, Gibson, Dunn & Crutcher, Los Angeles, for AppellantAetna Casualty & Surety Co.
R. Jeff Carlisle, Ellen R. Krakow, Lynberg & Watkins, Los Angeles, for AppellantsAmerican Home Assurance Company; National Union Fire Insurance Company of Pittsburgh, Penn.
Nelson C. Barry, Rebecca Barry Aherne, Bishop, Barry, Howe, Haney & Ryder, San Francisco, Daniel U. Smith, Kentfield, for AppellantCommercial Union Ins. Co.Robert A. Muhlbach, Kirtland & Packard, Los Angeles, for Appellant and RespondentContinental Casualty Co. and for AppellantColumbia Casualty Co.
Marshall Grossman, Frank Kaplan, Alschuler, Grossman & Pines, Los Angeles, Rodney Eshelman, Donald Ramsey, David M. Rice, Carroll, Burdick & McDonough, San Francisco, Herbert M. Wachtell, David Gruenstein, Jeffrey R. Boffa, Wachtell, Lipton, Rosen & Katz, New York City, for Appellant and RespondentContinental Casualty Co. and for AppellantsColumbia Casualty Co. and CNA Casualty of California.
Steven M. Crane, Morris, Polich & Purdy, Los Angeles, for Appellant Fidelity & Casualty Ins. of New York.
Jeffrey Kaufman, Peter J. Logan, Kaufman & Logan, San Francisco, for AppellantFireman's Fund Ins. Co.
Robert H. Berkes, Patrick J. Jacobs, Pave, McCord, Jacobs & Berkes, Sherman Oaks, for AppellantFirst State Ins. Co.
Martin S. Checov, O'Melveney & Myers, San Francisco, John G. Niles, Los Angeles, for Appellant Insurance Comapny of North America.
N. Brooks Weld, Hillsinger & Costanzo, Los Angeles, for Appellant Interstate Fire & Casualty.
Gerald V. Weigle, Jr., Dinsmore & Shohl, Cincinnati, OH, Joseph G. Manta, Mark Manta, Manta & Welge, Philadelphia, PA, Frederick D. Baker, Kathleen D. Patterson, Sedgwick, Detert, Moran & Arnold, San Francisco, for AppellantLiberty Mutual Ins. Co.
Terry L. Croghan, Law Offices of Terry Croghan, San Francisco, Raoul D. Kennedy, Peter Davis, James C. Martin, Crosby, Heafey, Roach & May, Oakland, Paul J. Bschorr, Richard B. Sypher, Dewey Ballantine, New York City, for AppellantPacific Indemnity Co.
Ronald R. Robinson, Marybeth Jacobsen, Paul S. White, Rosenfeld, Meyer & Susman, Beverly Hills, for AppellantReliance Ins. Co.
Philip R. Matthews, Paul J. Killion, Hancock, Rothert & Bunshoft, San Francisco, for Appellants Underwriters at Lloyds Rokeby-Johnson, Bird & Companies.
Lon Harris, Gary L. Green, Harris & Green, El Segunda, for AppellantsUnited States Fire Ins. Co., Central National Ins. Co. of Omaha and Puritan Ins. Co.
David W. Steuber, Kirk A. Pasich, Martin D. Katz, Troop, Meisinger, Steuber & Pasich, Los Angeles, for Appellant and RespondentGAF Corporation.
Robert H. Sayler, William Skinner, Covington & Burling, Washington, D.C., John E. Heintz, Lisa Latorre, Howrey & Simon, Washington, D.C., Cary B. Lerman, Munger, Tolles & Olson, Los Angeles, for Respondent Armstrong World Industries.
William R. Irwin, Donald W. Brown, Thomas M. Peterson, Brobeck, Phleger & Harrison, San Francisco, for RespondentFibreboard Corporation.
This appeal raises a number of complex questions concerning insurance coverage for claims of asbestos-related bodily injuries and property damage.In the proceedings below, separate declaratory relief actions and related cross-actions involving three asbestos manufacturers--Armstrong World Industries, Inc., Fibreboard Corporation, and GAF Corporation--and their various insurance carriers were coordinated and tried in six separate phases over a five-year period.1
On appeal, the parties submitted briefs on three major "Issue Groups," and our opinion follows that organization.First, in the unpublished portion of the opinion, we discuss the issues of Issue Group I pertaining to a lost insurance policy.In Issue Group II we discuss the issues concerning the bodily injury claims: trigger and scope of coverage; the application of the phrase "neither expected nor intended"; the liability of premerger insurers; the effect of the Wellington Agreement.In Issue Group III, we discuss the issues surrounding the property damage claims: coverage for property damage; trigger and scope of coverage; the duties to defend and indemnify; and, in the unpublished portion of the opinion, the "drop-down" obligation of an INA-Armstrong excess policy.
After this appeal was submitted for decision, we granted a motion of certain parties to sever issues unique to them in order to facilitate a pending settlement.Accordingly, we have deferred decision upon issues pertaining to a lost Fibreboard-Pacific Indemnity insurance policy; the number of occurrences; the effect of the Fibreboard-Continental manuscript policy; and the application of the pollution exclusion clause.
Our previous opinion, filed on November 15, 1993, was vacated by the Supreme Court, and the matter was remanded to us for reconsideration in light of Montrose Chemical Corp. v. Admiral Ins. Co.(1995)10 Cal.4th 645, 42 Cal.Rptr.2d 324, 913 P.2d 878.
At the outset, we set forth the principles guiding our review.Interpretation of an insurance policy is primarily a judicial function.When the trial court's interpretation did not depend upon conflicting extrinsic evidence, the reviewing court makes its own independent determination of the policy's meaning.(Masonite Corp. v. Great American Surplus Lines Ins. Co.(1990)224 Cal.App.3d 912, 916, 274 Cal.Rptr. 206.)
In interpreting an insurance contract, the court's fundamental goal is to give effect to the mutual intention of the parties.Such intent is inferred, if possible, solely from the written provisions of the contract.(AIU Ins. Co. v. Superior Court(1990)51 Cal.3d 807, 821-822, 274 Cal.Rptr. 820, 799 P.2d 1253.)"If contractual language is clear and explicit, it governs."(Bank of the West v. Superior Court(1992)2 Cal.4th 1254, 1264, 10 Cal.Rptr.2d 538, 833 P.2d 545.)Words in an insurance policy are to be interpreted as a layperson would interpret them, in their " 'ordinary and popular sense.' "(AIU, supra, 51 Cal.3d at p. 822, 274 Cal.Rptr. 820, 799 P.2d 1253;Reserve Insurance Co. v. Pisciotta(1982)30 Cal.3d 800, 807, 180 Cal.Rptr. 628, 640 P.2d 764.)A policy should not be read as it might be analyzed by an attorney or an insurance expert.(Delgado v. Heritage Life Ins. Co.(1984)157 Cal.App.3d 262, 271, 203 Cal.Rptr. 672.)This is so even if the policyholder is a sophisticated insured.(AIU, supra, 51 Cal.3d at p. 823, 274 Cal.Rptr. 820, 799 P.2d 1253.)
If particular policy language is ambiguous, it is to be resolved by interpreting the ambiguous provisions in accordance with the insured's objectively reasonable expectations.(Bank of the West v. Superior Court, supra, 2 Cal.4th at pp. 1264-1265, 10 Cal.Rptr.2d 538, 833 P.2d 545.)Only if application of this rule does not resolve the ambiguity will the policy provision be construed in favor of the insured.(Id. at p. 1265, 10 Cal.Rptr.2d 538, 833 P.2d 545.)
Issue Group I: LOST INSURANCE POLICY **
Phase III of the coordinated proceedings below concerned the rights and obligations of insurers to indemnify and defend the manufacturers or distributors of asbestos or asbestos products that are, or have been, defendants in tens of thousands of lawsuits brought by persons who claim to have developed disabling and often fatal asbestos-related diseases as a result of exposure to asbestos products many years ago.It bears emphasizing that the issues do not pertain to the legal rights of those suffering from asbestos-related diseases to recover damages from asbestos manufacturers.
The principal issues before the trial court concerned the trigger and scope of coverage under the comprehensive general liability policies for asbestos-related bodily injury claims: What event triggers an insurer's indemnification and defense obligations?And to what extent must policyholders share in the indemnity and defense costs?
In order to resolve these issues, the trial court heard extensive medical testimony and took documentary evidence concerning the pathogenesis of asbestos-related conditions.The trial court artfully described the insidious nature of asbestos:
We adopt the trial court's summary of the medical evidence: "Several diseases may result from...
Get this document and AI-powered insights with a free trial of vLex and Vincent AI
Get Started for FreeStart Your 3-day Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting

Start Your 3-day Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting

Start Your 3-day Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting

Start Your 3-day Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting

Start Your 3-day Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting

Start Your 7-day Trial
-
Energy Ins. Mut. Ltd. v. Ace Am. Ins. Co.
...court makes its own independent determination of the policy's meaning." ( Armstrong World Industries, Inc. v. Aetna Casualty & Surety Co. (1996) 45 Cal.App.4th 1, 35-36, 52 Cal.Rptr.2d 690 ( Armstrong ).) " ' "While insurance contracts have special features, they are still contracts to whic......
-
Prudential Lines Inc., In re
...phase, not in the liability phase. See, e.g., Keene Corp., 667 F.2d at 1050; Armstrong World Indus., Inc. v. Aetna Cas. & Sur. Co., 45 Cal.App.4th 1, 52 Cal.Rptr.2d 690, 707-08 (Cal.App.1996); J.H. France Refractories Co. v. Allstate Ins. Co., 534 Pa. 29, 626 A.2d 502, 509 (1993). It may be......
-
Sharon Steel Corp. v. Aetna Cas. and Sur. Co.
...each insurer was on the risk, but also takes into account the respective policy limits. See Armstrong World Indus., Inc. v. Aetna Cas. & Sur. Co., 45 Cal.App.4th 1, 52 Cal.Rptr.2d 690, 707-10 (1996) (affirming prior appeals court decision to allocate costs among all triggered insurance poli......
-
Aas v. Superior Court
...Earthquake: Turning Loss To Gain," December 1, 1994, at pg. 22, italics added.)7 Citing Armstrong World Industries, Inc. v. Aetna Casualty & Surety Co. (1996) 45 Cal.App.4th 1, 90-94, 52 Cal.Rptr.2d 690, Lyon invites this court, in the event we grant these writ petitions on the issue of the......
-
Dealing With The Non-Cumulation Clause: It May Not Mean What Some Insurers Say It Does!
...the allocation of liability when more than one policy covers an injury."); Armstrong World Indus. Inc. v. Aetna Cas. & Sur. Co., 45 Cal. App. 4th 1, 52 (1996) ("[A] policyholder may obtain full indemnification and defense from one insurer, leaving the targeted insurer to seek contributi......
-
Certain Underwriters At Lloyd's London v. ConAgra Grocery Products Company
...by the actual basis of liability imposed on the insured." (Armstrong World Industries, Inc. v. Aetna Casualty & Surety Co. (1996) 45 Cal.App.4th 1, 108 [52 Cal. Rptr. 2d 690] The parties' dispute arose of out an underlying action for representative public nuisance filed by multiple counties......
-
Newly-Published Regional Steel Case Raises More Questions Than It Answers
...In practice, the Regional Steel case raises as many questions as it answers. Erica Villanueva Armstrong World Industries, Inc. v. Aetna Casualty & Surety Co., 45 Cal.App.4th 1 (1st Dist. 1996), Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc., 78 Cal.App.4th 847 (2000). At i......
-
United Talent Agency v. Vigilant Insurance Company
...in AIU Insurance Co. v. Superior Court, 51 Cal. 3d 807 (1990) and Armstrong World Industries, Inc. v. Aetna Casualty & Surety Co., 45 Cal. App. 4th 1 (1996), both of which involved commercial general liability ("CGL") policies. The court distinguished those cases as [C]ases involving CGL co......
-
Insurance Recovery for Environmental Liabilities
...218 CHAPTER 4 the insured’s intent to cause harm before exclusion will apply); Armstrong World Indus. Inc . v. Aetna Cas. & Sur. Co., 52 Cal. Rptr. 2d 690, 719–21 (Ct. App. 1996) (same); Travelers Indem. Co. v. PCR Inc., 889 So. 2d 779, 797–98 (Fla. 2004) (same). 30. Some carriers have trie......
-
Table of Cases
...Cleaners Inc. v. Erie Ins. Group, 364 F. Supp. 2d 797 (S.D. Ind. 2005) 223 Armstrong World Indus. Inc. v. Aetna Cas. & Sur. Co., 52 Cal. Rptr. 2d 690 (Ct. App. 1996) 218 Artesian Water Co. v. Gov’t of New Castle County, 851 F.2d 643 (3d Cir. 1988) 454 Asarco Inc., United States v., 430 F.3d......
-
CHAPTER 5 Comprehensive or Commercial General Liability (CGL) Insurance: Coverage A for "Bodily Injury" or "Property Damage" Liabilities
...Surety Co., 182 Cal. App.4th 1023, 105 Cal. Rptr.3d 896 (2010); Armstrong World Industries, Inc. v. Aetna Casualty & Surety Co., 45 Cal. App.4th 1, 52 Cal. Rptr.2d 690 (1996). Colorado: National Insurance Co. v. Great Southwest Fire Insurance Co., 833 P.2d 741 (Colo. 1992); Empire Casualty ......
-
Determining Coverage and Obtaining Policy Limits
...injury claims in asbestos cases, the California Court of Appeal, in Armstrong World Industries, Inc. v. Aetna Casualty & Surety Co. , 45 Cal. App. 4th 1 (1996), held that “all of a policyholder’s policies in effect from first exposure to asbestos or asbestos-containing products until the da......