Continental Casualty Co. v. Rohr, Inc., HHDCV166066502S

CourtSuperior Court of Connecticut
Writing for the CourtPECK, J.T.R.
PartiesCONTINENTAL CASUALTY COMPANY in its Own Capacity, and as Successor in Interest to Certain Harbor Insurance Company Policies and as Successor by Merger to CNA Casualty of California, Certain Underwriters at Lloyd’s London, et al. v. ROHR, INCORPORATED, et al.
Docket NumberHHDCV166066502S
Decision Date19 March 2018

CONTINENTAL CASUALTY COMPANY in its Own Capacity, and as Successor in Interest to Certain Harbor Insurance Company Policies and as Successor by Merger to CNA Casualty of California, Certain Underwriters at Lloyd’s London, et al.

No. HHDCV166066502S

Superior Court of Connecticut, Judicial District of Hartford, Hartford

March 19, 2018




The plaintiff excess insurers brought this action for declaratory judgment against the defendants, Rohr, Incorporated (Rohr), certain primary insurers, and other excess insurers in connection with various underlying environmental property damage claims. The underlying claims have been brought against Rohr and seek recovery for the costs of investigation and remediation at seven sites in California and one in Missouri (Chula Vista, Riverside, Agricultural Park, Casmalia Resources Hazardous Waste Facility, BKK Landfill, Basin By-Products, Gibson Environmental, and Hayford Bridge). The complaint in the present action alleges that the underlying claims arise from Rohr’s manufacturing operations at the sites over several decades, which resulted in the continuous release of various hazardous wastes and materials, including PCBs, into the environment. The continuous release of those hazardous materials allegedly caused continuous environmental damage. Rohr has sought defense and indemnity from the plaintiffs for the costs it has incurred, and will continue to incur, in the remediation of the sites.

In count one of the complaint, the plaintiffs seek a declaration that they have no obligation to defend Rohr in connection with the underlying claims; in count two, the plaintiffs seek a declaration that they have no obligation to indemnify Rohr in connection with the underlying claims; in count three, the plaintiffs seek a declaration that, if the court finds that the plaintiffs are obligated to defend and/or indemnify Rohr, the plaintiffs are entitled to contribution from the defendant primary, umbrella, and excess insurers.

Rohr maintains that it is entitled to insurance coverage under its excess comprehensive general liability (CGL) policies with respect to the underlying claims. On July 13, 2016, the parties filed a joint motion to stay the contribution claims alleged in count three of the plaintiffs’ complaint. The motion to stay was granted by the court, Peck, J., on September 26, 2016. At the same time, pursuant to the court’s scheduling order dated September 26, 2016, the litigation was divided into two phases. Phase one is limited to the determination of 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?" All other issues are scheduled to be decided in phase two, if necessary.

On December 16, 2016, the plaintiffs Continental Casualty Company (Continental)[1] and Certain Underwriters at Lloyd’s, London (Lloyd’s)[2] filed a motion for partial summary judgment (# 299). Specifically, Continental and Lloyd’s seek a declaration that, as a matter of law, their excess CGL policies are not implicated to respond to the underlying claims because the primary policies issued to Rohr by the Royal Indemnity Company (Royal policies)[3] carry combined limits of $24 million in coverage, which have not been exhausted.

On January 6, 2017, the defendants Federal Insurance Company (Federal) and Century Indemnity Company (Century) filed motions (# 306 & # 310, respectively) joining in Continental and Lloyd’s motion for summary judgment. Federal’s and Century’s motions are accompanied by memoranda of law and rely on all moving papers submitted by Continental and Lloyd’s. Because their positions on the issues relevant to the present motions are substantially aligned, Continental, Lloyd’s, Federal, and Century, will hereinafter be referred to as " the excess insurers" when discussed collectively.

On January 23, 2017, Rohr filed its own motion for partial summary judgment (# 315) against Continental and Lloyd’s, as well as a separate motion for partial summary judgment against Federal and Century (# 317). Accompanying each of these motions is a memorandum of law both supporting the motion and in opposition to the respective motion for summary judgment asserted against Rohr. Rohr seeks a declaration that obligations under Continental’s and Lloyd’s excess policies arise once Rohr collects $2 million under its primary policies for any one occurrence. Rohr also seeks a declaration that Federal’s and Century’s policies do not include provisions that require Rohr to actually collect any particular sum from any underlying insurer, and, accordingly, that the obligations of Federal and Century may arise once Rohr’s losses reach the attachment points of Federal’s and Century’s policies.

The parties, including the defendant Transport Insurance Company, have filed various supplemental and reply briefs in support of or in opposition to the motions for summary judgment. The parties appeared before the court on April 18, 2017, to argue their respective positions. At that time, the parties agreed that California law is applicable to the substantive issues presented in this action.

While the court was preparing its decision, Continental and Lloyd’s filed a motion for permission to file supplemental authority with an accompanying memorandum of law on September 8, 2017.[4] The purpose of the motion was to draw the court’s attention to the relevance of the recently decided Montrose Chemical Corp. of California v. Superior Court, 14 Cal.App. 5th 1306, 222 Cal.Rptr.3d 748 (2017), petition for review granted, 406 P.3d 327, 225 Cal.Rptr.3d 796 (2017),[5] which states principles directly applicable to this action. The other parties to the motions for summary judgment subsequently filed their own memoranda addressing the new opinion.


" [S]ummary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law ... In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party." (Internal quotation marks omitted.) Stuart v. Freiberg, 316 Conn. 809, 820-21, 116 A.3d 1195 (2015).

" [T]he genuine issue aspect of summary judgment requires the parties to bring forward before trial evidentiary facts, or substantial evidence outside the pleadings, from which the material facts alleged in the pleadings can warrantably be inferred ... A material fact has been defined adequately and simply as a fact which will make a difference in the result of the case." (Citation omitted; internal quotation marks omitted.) Buell Industries, Inc. v. Greater New York Mutual Ins. Co., 259 Conn. 527, 556, 791 A.2d 489 (2002). " In ruling on a motion for summary judgment, the court’s function is not to decide issues of material fact ... but rather to determine whether any such issues exist." (Internal quotation marks omitted.) RMS Residential Properties, LLC v. Miller, 303 Conn. 224, 233, 32 A.3d 307 (2011).

For purposes of the present motions for summary judgment, there is no real dispute regarding the relevant facts. Specifically, none of the parties to these motions dispute the language of the relevant insurance policies or the fact that the underlying claims arise from alleged damages resulting over the course of decades from the gradual or continuous release of toxic chemicals into the environment. Nor do the parties disagree regarding the fact that Rohr reached a settlement with its primary insurer and the dollar amount of that settlement.[6]

The issues before the court, therefore, are purely questions of law, namely, the interpretation of the terms of the various insurance policies issued to Rohr by the excess insurers, and the legal effect, if any, of the settlement on the excess insurers’ liability to Rohr in light of that interpretation. Central to the resolution of these issues is the court’s interpretation of language in Rohr’s primary and excess CGL policies. A key point of disagreement is the interpretation of provisions in Rohr’s primary CGL policies defining the limits of liability under those policies. The excess insurers maintain that the $2 million " per occurrence" and " aggregate" limits in the primary policies, under the circumstances of this case, effectively provide $2 million of coverage per year that the policies were in effect, for a total effective limit of $24 million that must be exhausted before the excess policies may be accessed. Rohr, on the other hand, takes the position that the primary policy limits are exhausted once $2 million have been paid out for any one occurrence, and that the excess policies become accessible at that point.

Resolving this stark difference in interpretation requires the correct application and understanding of various technical concepts and terms that appear throughout California’s case law governing this case. Accordingly, before specifically resolving the conflict between the parties, an introduction and discussion of these concepts and terms is necessary.


A. Primary v. Excess Insurance

The present case involves the relationship between two different types of CGL policies: primary and excess. A CGL policy is a third-party liability policy- that is, a policy that " provides coverage for liability of the insured to a ‘third party’ ... In the typical third-party liability policy, the carrier assumes a contractual duty to pay judgments the insured becomes legally obligated to pay as damages because of bodily injury or property damage caused by the insured." Montrose Chemical Corp. of California v. Admiral Ins. Co., 10 Cal.4th 645, 663, 913 P.2d 878,...

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