John Crane Inc. v. Admiral Ins. Co.
| Decision Date | 22 May 2009 |
| Docket Number | No. 1-08-1845.,No. 1-08-2057.,No. 1-08-1918.,1-08-1845.,1-08-1918.,1-08-2057. |
| Citation | 910 N.E.2d 1168,391 Ill. App.3d 693 |
| Parties | JOHN CRANE INC., Plaintiff-Appellant, v. ADMIRAL INSURANCE COMPANY, Allianz Underwriters Insurance Company, Allstate Insurance Company, AIU Insurance Company, American Motorists Insurance Company, American Re-Insurance Company, Columbia Casualty Company, Continental Casualty Company, Continental Insurance Company, First State Insurance Company, Granite State Insurance Company, Hartford Accident & Indemnity, Insurance Company of North Amercia, Lexington Insurance Company, Lumbermens Mutual Casualty Company, National Surety Corp., National Union Fire Insurance Company of Pittsburgh, PA, ITG Insurance Company, Twin City Fire Insurance Company, Certain Underwriters at Lloyds of London and Certain London Market Insurance Companies, Including Excess Insurance Co., Ltd.; General Reinsurance Corp.; River Thames Insurance Co.; World Auxiliary Insurances Corp., and John Does 1-400, Defendants-Appellees. John Crane Inc., Plaintiff-Appellee, v. Admiral Insurance Company, Allianz Underwriters Insurance Company, Allstate Insurance Company, AIU Insurance Company, American Motorists Insurance Company, American Re-Insurance Company, Columbia Casualty Company, Continental Casualty Company, Continental Insurance Company, First State Insurance Company, Granite State Insurance Company, Hartford Accident & Indemnity, Insurance Company of North Amercia, Lexington Insurance Company, Lumbermens Mutual Casualty Company, National Surety Corproation, National Union Fire Insurance Company of Pittsburgh, PA, ITG Insurance Company, Twin City Fire Insurance Company, Certain Underwriters at Lloyds of London and Certain London Market Insurance Companies, Including Excess Insurance Co., Ltd.; General Reinsurance Corp.; River Thames Insurance Co.; World Auxiliary Insurances Corp., and John Does 1-400, Defendants-Appellants. John Crane Inc., Plaintiff-Appellee, v. Admiral Insurance Company, Allianz Underwriters Insurance Company, Allstate Insurance Company, AIU Insurance Company, American Motorists Insurance Company, American Re-Insurance Company, Columbia Casualty Company, Continental Casualty Company, Continental Insurance Company, First State Insurance Company, Granite State Insurance Company, Hartford Accident & Indemnity, Insurance Company of North Amercia, Lexington Insurance Company, Lumbermens Mutual Casualty Company, National Surety Corproation, National Union Fire Insurance Company Of Pittsburgh, PA, ITG Insurance Company, Twin City Fire Insurance Company, Certain Underwriters at Lloyds of London and Certain London Market Insurance Companies, Including Excess Insurance Co., Ltd.; General Reinsurance Corp.; River Thames Insurance Co.; World Auxiliary Insurances Corp., and John Does 1-400, Defendants-Appellants. |
| Court | United States Appellate Court of Illinois |
Michael H. Moirano, Edward B. Mueller, Michael J. Daley, Nisen & Elliott, Chicago, IL, William F. Greaney, Allan B. Moore, Joanne B. Grossman, Laird Hart, Benjamin C. Block, Covington & Burling, Washington, D.C., for John Crane Inc.
Rebecca L. Ross, Clinton E. Cameron, David F. Cutter, Stephanie L. Haas, Ross, Dixon & Bell, LLP, Chicago, IL, for Columbia Casualty Company, Continental Casualty Company, and The Continental Insurance Company, as successor to certain interests of London Guarantee and Accident Company of New York.
Robert R. Anderson, III, John Hughes, Daniel A. Waitzman, Hughes Socol Piers Resnick & DYM Ltd., Chicago, IL, for Allstate Insurance Company, solely as successor in interest to Northbrook Excess and Surplus Insurance Company, formerly known as Northbrook Insurance Company.
Mary F. Stafford, Colleen Brown, Clausen Miller P.C., Chicago, IL, for AIU Insurance Company, Granite State Insurance Company, Lexington Insurance Company, and National Union Fire Insurance Company of Pittsburgh, PA.
Catherine M. Crisham, Kristi S. Nolley, Bates & Carey, Chicago, IL, for Allianz Insurance Company, American Re-Insurance Company, and National Surety Corporation.
Matthew Farmer, Cohn, Baughman & Martin, Chicago, IL, for Century Indemnity Company, as successor to CCI Insurance Company, as successor to Insurance Company of North America.
Timothy J. Fagan and John D. LaBarbera, Smith Amundsen, L.L.C., Chicago, IL, for TIG Insurance Company.
Plaintiff, John Crane Inc. (Crane), appeals from the grant of a preliminary injunction enjoining it from engaging in any other litigation in any forum related to insurance coverage for asbestos claims against John Crane. Certain defendants also appeal the trial court's denial of their motion to extend the injunction through all appeals in this proceeding. For the following reasons, we affirm the judgment of the circuit court.
Plaintiff, a Delaware corporation having its principal place of business in Illinois, is engaged in the manufacture and sale of engineered sealing products. Since 1979, Crane has been named as a defendant in over 250,000 underlying claims that allege liability for personal injuries sustained by claimants as a result of their exposure to Crane's asbestos-containing products. Crane and its primary insurers, Lumbermens Mutual Casualty Company and American Motorists Insurance Company (Kemper), have paid hundreds of millions of dollars in defense and indemnity of such suits.
Crane commenced this declaratory judgment action in May 2004, against Kemper and its umbrella and excess carriers to determine coverage obligations under their respective policies. In Count I of its amended complaint, Crane sought a declaration that primary coverage has been exhausted. In counts II and III, Crane sought declaratory relief regarding the obligations of its umbrella and excess insurers. Defendants Columbia Casualty Company, Continental Casualty Company, and The Continental Insurance Company (the CNA defendants), filed counterclaims to determine the trigger dates in the underlying claims for which Crane has been held liable. Allianz Underwriters Insurance Company (Allianz) also filed a counterclaim seeking a determination of whether all primary policies have been exhausted. AIU Insurance Company, Granite State Insurance Company, Lexington Insurance Company, and National Union Fire Insurance Company of Pittsburgh, PA (AIG defendants), filed counterclaims seeking a declaration that they have no duty to defend or indemnify John Crane. Munich Reinsurance America, Inc., f/k/a American Re-Insurance Company (Munich), National Surety Corporation (National Surety), Allstate Insurance Company, TIG Insurance Company (TIG), Century Indemnity Company (Century), and International Insurance Company also remain as defendants.
The litigation was bifurcated, with the first phase focused on the issue of the trigger for coverage of the policies, and the second phase concerning allocation and remaining issues. During the pendency of this proceeding, the circuit court considered the coverage issues in various rulings. Pursuant to Zurich Insurance Co. v. Raymark Industries, Inc., 118 Ill.2d 23, 47, 112 Ill.Dec. 684, 514 N.E.2d 150, 161 (1987), the court concluded that coverage for asbestos-related claims is governed by a "triple trigger" (i.e., when the claimants were exposed to asbestos, suffered from asbestos-related sickness, or suffered from disease caused by asbestos). Ultimately, the court entered a memorandum opinion and order on multiple motions and partial motions for summary judgment regarding issues of exhaustion, the number of occurrences, trigger, and scope of coverage.
In 2004, Crane entered into an agreement concerning coverage with Kemper, and also agreed to fully release Kemper's liability under its primary policies in exchange for payment of $10 million. In 2006, Crane also entered into a second settlement agreement with Kemper for $20 million, releasing Kemper from all remaining obligations under both its primary and excess policies.
In its ruling of April 12, 2006, the circuit court determined that all of the underlying claims constituted a single occurrence arising from the manufacture, sale, and distribution of Crane's asbestos products. The court also determined that the proper allocation among the umbrella insurers was pro rata, and that the Raymark triple-trigger would not necessarily trigger all excess policies. The court ruled that a hearing with medical testimony was also necessary to determine whether new medical findings since Raymark necessitated a different trigger ruling. The court further found that claims in which liability was imposed on Crane were ripe for adjudication of the declaratory judgement issues, and that underlying cases that remained pending were not ripe for determination of costs of defense and indemnification. However, the court ruled it could not determine whether there was exhaustion based upon the settlement agreements without the input of additional briefing and an evidentiary hearing.
Mediation was scheduled with trial to commence on the remaining issue of exhaustion of primary coverage. By February 2008, the parties reached a tentative stipulation governing the exhaustion of certain primary policies and the limits on those remaining. However, this tentative agreement was not finalized as Crane rejected a tolling provision whereby the parties would bring any future coverage disputes before the presiding judge. Crane also indicated it intended to bring additional lawsuits against its insurers in other areas of the country.
Adhering to that announcement, Crane then filed five actions in California, Ohio, Texas, Virginia, and West Virginia. In the California and Virginia cases against the CNA defendants, Crane sought money damages for breach of contract and bad faith for refusal to pay their pro rata shares of final judgments in three underlying asbestos actions, based on the prior declaratory coverage rulings in the case sub...
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