Continental Casualty Co. v. Rohr, Inc., 121520 CTCA, AC 41537

Docket Nº:AC 41537, AC 41538, AC 42613
Opinion Judge:BEAR, J.
Party Name:CONTINENTAL CASUALTY COMPANY ET AL. v. ROHR, INC., ET AL.
Attorney:Marilyn B. Fagelson, with whom were Proloy K. Das, Rachel Snow Kindseth, Benjamin H. Nissim and, on the brief, Steven M. Greenspan, Amanda M. Leffler, pro hac vice, and Paul A. Rose, pro hac vice, for the appellant-cross appellee (named defendant). Matthew B. Anderson, pro hac vice, with whom wer...
Judge Panel:DiPentima, C. J., and Prescott and Bear, Js.
Case Date:December 15, 2020
Court:Appellate Court of Connecticut

CONTINENTAL CASUALTY COMPANY ET AL.

v.

ROHR, INC., ET AL.

Nos. AC 41537, AC 41538, AC 42613

Court of Appeals of Connecticut

December 15, 2020

Argued February 13, 2020

Procedural History

Action for a declaratory judgment to determine, inter alia, the rights of the parties under certain insurance policies issued to the named defendant by the plaintiffs and certain of the defendants concerning underlying claims of environmental contamination brought against the named defendant, and for other relief, brought to the Superior Court in the judicial district of Hartford, where the defendant Federal Insurance Company et al. filed cross claims and the named defendant filed a counterclaim and a cross claim; thereafter, the court, Hon. A. Susan Peck, judge trial referee, bifurcated the trial and ordered that the parties' declaratory judgment claims be tried to the court in the first phase; subsequently, the court granted the motions for partial summary judgment filed by the named plaintiff et al. and the motions for summary judgment filed by the defendant Federal Insurance Company et al., and denied the named defendant's motions for partial summary judgment, and the named defendant appealed and the named plaintiff et al. cross appealed to this court, which consolidated the appeals. Reversed in part; judgment directed;

further proceedings.

Marilyn B. Fagelson, with whom were Proloy K. Das, Rachel Snow Kindseth, Benjamin H. Nissim and, on the brief, Steven M. Greenspan, Amanda M. Leffler, pro hac vice, and Paul A. Rose, pro hac vice, for the appellant-cross appellee (named defendant).

Matthew B. Anderson, pro hac vice, with whom were William A. Meehan and, on the brief, Stephen T. Roberts, for the appellees-cross appellants (named plaintiff et al.).

Brian C. Coffey, prohac vice, with whom were Stuart G. Blackburn, Laura Pascale Zaino and, on the brief, William M. Cohn, pro hac vice, for the appellees (defendant Century Indemnity Company et al.).

DiPentima, C. J., and Prescott and Bear, Js. [*]

OPINION

BEAR, J.

These appeals and cross appeal involve issues relating to whether certain umbrella and excess policies issued by the plaintiff and defendant insurers provide coverage for environmental property damage remediation claims brought against the named defendant, Rohr, Inc. (Rohr).

In Docket No. AC 42613, Rohr appeals from the judgment of the trial court granting the motion for partial summary judgment filed by the plaintiff Continental Casualty Company (Continental), in its own capacity and as successor in interest to certain Harbor Insurance Company insurance policies (Harbor excess policies) and as successor by merger to CNA Casualty of California; the plaintiff Certain Underwriters at Lloyd's, London (Lloyd's); and certain plaintiff London market insurance companies (London insurers), specifically, The Ocean Marine Insurance Company (Ocean Marine) as successor to certain policies severally subscribed to by Commercial Union Assurance Company PLC and/or General Accident Fire & Marine Life Assurance Corporation, and Scottish Lion Insurance Company, Ltd. (Scottish Lion).1 In Docket No. AC 42613, the Continental plaintiffs cross appealed from the judgment.

In Docket No. AC 41537, Rohr appeals from the judgment of the trial court granting the motion for summary judgment filed by the defendant Federal Insurance Company (Federal), and in Docket No. AC 41538, Rohr appeals from the summary judgment rendered in favor of the defendant Century Indemnity Company (Century), formerly known as California Union Insurance Company.

On appeal in Docket No. AC 42613, Rohr claims that the trial court erred in concluding that (1) the underlying primary insurance policies issued to Rohr by Royal Indemnity Company (Royal) for the period between August 1, 1959, and August 1, 1971 (Royal primary policies), provided per occurrence limits of $8 million, (2) the underlying primary insurance policies must be horizontally exhausted before any of the excess policies could attach to provide coverage, and (3) Rohr was required to be paid those policy limits before it could access certain excess insurance policies. On the cross appeal, the Continental plaintiffs challenge the trial court's determination that the Royal primary policies have a total per occurrence limit of $8 million and claim that the total per occurrence limit of the Royal primary policies is $24 million. For the reasons discussed more fully herein, we reverse in part the judgment of the trial court.

The following undisputed factual and procedural history is relevant to our resolution of the claims on appeal. Over the course of several decades, dating back to the 1940s, environmental contamination occurred at various sites located principally in California2 as a result of manufacturing operations at those sites by Rohr, which is a wholly owned subsidiary of United Technologies Corporation with its principal place of business located in Farmington. Consequently, claims were brought against Rohr seeking recovery for the costs of remediation of those sites, and Rohr, in turn, sought coverage from its insurers for defense and indemnity costs it has incurred, and will continue to incur, related to the remediation. Prior to this litigation, Rohr settled certain of its coverage claims with the defendant Arrowood Indemnity Company (Arrowood), as successor in interest to Royal. Two of the Royal primary policies are directly at issue in the present case: policy RLP 144014, which was in effect between August 1, 1959, and August 1, 1965; and policy RTS 902235, which was in effect between August 1, 1965, and August 1, 1971.3The plaintiffs4 issued policies to Rohr that are excess to the 1959-1971 Royal primary policies. A central dispute between the parties to these appeals concerns the claim by the excess insurers that the amount paid to Rohr under its settlement with Arrowood was less than the total amount of the coverage under the Royal primary policies and, thus, did not fully exhaust the coverage provided under those policies.

In 2016, the plaintiffs commenced the present action against the defendants5 seeking a declaratory judgment as to the rights and obligations of the parties under certain insurance policies issued to Rohr by the plaintiff insurers and certain of the defendant insurers concerning the underlying environmental property damage claims.6 Specifically, the plaintiffs sought a judgment declaring: in count one of their complaint, that they have no duty to defend Rohr in connection with the underlying claims; in count two, that they have no obligation to indemnify Rohr concerning the underlying claims; and in count three, that, in the event the court finds that they are obligated to defend or indemnify Rohr, they are entitled to contribution from the defendant primary, umbrella and excess insurers.7

On September 26, 2016, the court granted a joint motion of the parties to stay the contribution claims alleged in count three. In a scheduling order issued the same day, the litigation was divided into two phases, with the first phase being limited to the following question: ‘‘At what point will the obligations of the excess insurers, if any, arise in light of the limits of the underlying primary policy or policies?'' The remaining issues were scheduled to be decided in phase two, if necessary.

On December 16, 2016, the Continental plaintiffs filed a motion for partial summary judgment. In their motion, they claimed that there was no genuine issue of material fact and that they were entitled to summary judgment in their favor because (1) all of the Royal primary policies first had to be exhausted before the excess policies could be implicated, (2) the Royal primary policies provide combined limits of $24 million in coverage per occurrence, and (3) the Royal primary policies have not been exhausted because Royal has not paid, or been held liable to pay, their full indemnity limits either by judgment or settlement.8 On January 6, 2017, Federal and Century filed motions joining in the motion for summary judgment filed by the Continental plaintiffs.

On January 23, 2017, Rohr filed a motion for partial summary judgment as to the Continental plaintiffs. In its memorandum in support of its motion and in response to the motion for partial summary judgment filed by those plaintiffs, Rohr maintained that, with respect to the underlying claims, it is entitled to coverage under its excess comprehensive liability policies. Specifically, Rohr claimed, inter alia, that it was ‘‘required to satisfy only a single per occurrence limit of $2 million in order to reach the excess insurers' coverage, '' that ‘‘vertical exhaustion is mandated by the language of the excess policies, '' and that its ‘‘settlement [under the Royal primary policies] does not preclude it from recovering against the excess insurers.'' Rohr further claimed that the excess insurers could not ‘‘avoid their obligations to Rohr by complaining that Rohr did not collect enough money in settlement from its primary insurer, Royal. Recent controlling California law, as well as the language of the excess policies and [the] Royal primary policies, compel the conclusion that Rohr need collect only $2 million from Royal before it can recover from the excess insurers.'' Also on January 23, 2017, Rohr filed a motion for partial summary judgment as to Federal and Century, incorporating by reference its combined memorandum in opposition to the motions for summary judgment filed by Federal and Century and in support of its motion for partial summary judgment as to those defendants, and all of the exhibits thereto. Rohr claimed, inter alia, that the joinder motions for summary judgment filed by Federal and Century failed for...

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