Ins. Co. of No. Am. v. Forty-Eight Insulations
| Decision Date | 04 May 1978 |
| Docket Number | Civ. A. No. 7-71654. |
| Citation | 451 F. Supp. 1230 |
| Parties | INSURANCE COMPANY OF NORTH AMERICA, Plaintiff, v. FORTY-EIGHT INSULATIONS, INC., Affiliated FM Insurance Company, Illinois National Insurance Company, Travelers Indemnity of Rhode Island and Liberty Mutual Insurance Company, Defendants. |
| Court | U.S. District Court — Western District of Michigan |
COPYRIGHT MATERIAL OMITTED
G. Cameron Buchanan, Buchanan, Ogne & Jinks, P. C., Troy, Mich., Michael R. Gallagher, Thomas E. Betz, Gallagher, Sharp, Fulton, Norman & Mollison, Cleveland, Ohio, for plaintiff.
W. Robert Chandler, Cross, Wrock, Miller & Vieson, Detroit, Mich., William C. Murphy, Richard L. Horwitz, Reid, Ochsenschlager, Murphy & Hupp, Aurora, Ill., for defendant Forty-Eight Insulations, Inc.
Ralph W. Barbier, Jr., Barbier, Goulet, Petersmarck & McFarland, St. Clair Shores, Mich., for defendant Affiliated FM Ins. Co.
David M. Tyler, Tyler, Canham, Goulding, Morad & Warner, P. C., Detroit, Mich., for Illinois National Ins. Co.
Richard J. Tonkin, Vandeveer, Garzia, Tonkin, Kerr & Heaphy, P. C., Detroit, Mich., for Travelers Indemnity of Rhode Island.
Jack H. Erps, Birmingham, Mich., for Liberty Mutual Ins. Co.
A declaratory judgment is sought by the Insurance Company of North America (INA) against its former insured, Forty-Eight Insulations, Inc. (Forty-Eight), and four (4) other insurance carriers who at some time insured Forty-Eight. These four companies are Affiliated FM Insurance Company (Affiliated FM), Illinois National Insurance Company (Illinois National), The Travelers Indemnity Company of Rhode Island (Travelers), and Liberty Mutual Insurance Company (Liberty Mutual).
This court has jurisdiction of this case by reason of diversity of citizenship of the parties and venue is proper in this district.
The dispute raises questions as to which insurance carrier has a duty to defend and/or to indemnify Forty-Eight for any resultant judgments against it in numerous pending underlying lawsuits. An ancillary issue is whether or not Forty-Eight must share in the payment of a judgment or in the costs of defense. The plaintiffs in each of those lawsuits, either for themselves or as representatives of decedents, claim to have suffered injury or death from asbestos-caused lung diseases as a result of being exposed to Forty-Eight's products containing asbestos. As of the date of this opinion 251 underlying lawsuits have been filed throughout the United States naming Forty-Eight as a defendant. All these suits also name additional defendants—in some cases as many as twenty (20).
In a typical underlying lawsuit a plaintiff construction worker, employed for many years installing products containing asbestos, sues all of the manufacturers whose asbestos products were used at any of the construction sites at which he was employed. The amount of asbestos dust from each manufacturer's product to which such worker was allegedly exposed or what amount he inhaled during any period of exposure cannot be determined with certainty. The exposures allegedly range in duration from a few years to as long as 48 years.
Under the law of some jurisdictions in which these underlying suits are filed all of the manufacturers may be held jointly and severally liable for an entire damage award. See, Borel v. Fibreboard Paper Products, 493 F.2d 1076 (5th Cir. 1973); Prosser, Law of Torts, § 52 at 315-320 (4th Ed. 1971). In other jurisdictions the defendant manufacturers may have the burden of showing the proper apportionment of damages. Id. In all cases there is the potentiality that any or all of the defendant manufacturers may be held liable for damages.
The dispute between the parties in this case results from their disagreements over the interpretation of the various insurance policies issued to Forty-Eight and concern their respective rights and obligations regarding coverage and the duty to defend. During the past 50 years Forty-Eight has had at least five (5) liability insurance carriers.1 The controversy as to coverage is whether the coverage at the time of exposure to asbestos or the coverage at the time the disease manifests itself is the relevant coverage. Plaintiff INA and three of the defendant insurance carriers argue for the application of a "manifestation theory" while Forty-Eight and Travelers advocate an "exposure theory."2
The parties have stipulated to most of the facts. In 1934 Forty-Eight, as a subsidiary of an Illinois corporation incorporated in 1923, began selling products containing asbestos. From 1923 through 1970 Forty-Eight or its predecessor manufactured and sold various types of insulation blocks and cements containing asbestos for use on boilers, pipes, fittings, elbows, and flat surfaces. In 1970 it discontinued the use of asbestos in all its products. This fact does not necessarily end the possibility of its asbestos product liability, however, in that demolition or removal of structures containing old insulating materials may cause asbestos to become airborne and may cause injury to persons employed in such activity. Given the latent periods of asbestos-caused lung disease, it is also anticipated that additional actions will be brought against Forty-Eight alleging injury from past exposure.
INA insured Forty-Eight in various policies from October 31, 1955 through October 31, 1972; Affiliated FM from October 31, 1972 through January 10, 1975; Illinois National from January 10, 1975 through January 12, 1976; and Travelers from January 12, 1976 through November 8, 1976. Liberty Mutual became an insurer of Forty-Eight on November 8, 1976 on a $100,000.00 deductible policy currently in force. The following chart shows the dates and coverage limits of the individual policies.
More Than
One Person One Person
Policy Name and Number From To One Accident One Accident Aggregate
Ins. Co. of North America
9LB21567 10/31/55 10/31/58 100,000 300,000 300,000
9LB24403 10/31/58 10/31/61 100,000 300,000 300,000
LB24688 10/31/61 6/17/62 100,000 300,000 300,000
LB24688 (End) 6/18/62 10/31/64 500,000 500,000 500,000
LB24913 10/31/64 10/31/67 500,000 500,000 500,000
ALB25120 10/31/67 10/31/72 500,000 500,000 500,000
Affiliated FM Insurance Co
GLA71255 10/31/72 1/22/73 500,000 500,000 500,000
GLA71342 1/22/73 12/31/73 500,000 500,000 500,000
GLA71886 12/31/73 1/10/75 400,000 400,000 400,000
Illinois National Insurance Co
GLA953273 1/10/75 1/12/76 300,000 300,000 300,000
The Travelers Indemnity Co. of Rhode Island
650-862A376-4-TRI-76 1/12/76 11/8/76 500,000 500,000 500,000
Liberty Mutual Insurance Co
LGI-632-004010-126 11/08/76 1/01/78 1,000,000 1,000,000 1,000,000
The relevant policy provisions are those that define what is covered, when the coverage applies, and the definitions of the various terms used. These provisions are summarized as follows:
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