Matter of Celotex Corp.
| Decision Date | 03 March 1993 |
| Docket Number | Adv. No. 91-40.,Bankruptcy No. 90-10016-8B1,90-10017-8B1 |
| Parties | In the Matter of the CELOTEX CORPORATION, et al., Debtors. The CELOTEX CORPORATION, et al., Plaintiffs, v. AIU INSURANCE COMPANY, et al., Defendants. |
| Court | United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Middle District of Florida |
Jeffrey W. Warren, Bush, Ross, Gardner, Warren & Rudy, P.A., Tampa, FL, for the Celotex Corp.
Charles P. Schropp, Mark P. Buell, Schropp, Buell & Elligett, Jeffrey W. Warren, Bush, Ross, Gardner, Warren & Rudy, P.A., Tampa, FL, Mark H. Kolman, Karen L. Bush, Mark D. Silverschotz, Anderson Kill Olick & Oshinsky, New York City, for plaintiffs.
Sara Kistler, Asst. U.S. Trustee, for Core Service Group.
John W. Kozyak, Kozyak Tropin Throckmorton & Humphreys, P.A., Miami, FL, for Asbestos Property Damage Committee.
Charles M. Tatelbaum, Johnson, Blakely, Pope, Bokor, Ruppel & Burns, P.A., Tampa, FL, for Creditors Committee of Unsecured Creditors.
William Knight Zewadski, Trenam, Simmons, Kemker, Scharf, Barkin, Frye & O'Neill, Tampa, FL, for Unofficial Asbestos Health Claim Committee.
H.C. Goplerud, Honigman Miller Schwartz and Cohn, Tampa, FL, for Asbestos Health Committee.
James W. Greene, William E. Nowakowski, Bromley, Greene & Walsh, Washington, DC, for Columbia Cas. Co., Employers Ins. of Wausau, Federal Ins. Co., Protective Nat. Ins. Co.
John A. Yanchunis, Blasingame, Forisz and Smiljanich, P.A., St. Petersburg, FL, for Continental Cas. Co., Citadel Gen. Assurance Co., Columbia Cas. Co., American Re-Insurance Co., Eric Reinsurance Co., Zurich American Insurance Co.
John E. Peer, Long & Levit, San Francisco, CA, for Continental Cas. Co., Transp. Ins. Co.
Katherine E. Rakowsky, Philip C. Stahl, Irving C. Faber, Margaret B. Jones, Grippo & Eldon, Chicago, IL, for American Ins. Co., Nat. Sur. Co.
Rolf E. Gilbertson, Paul L. Gingras, Zelle & Larson, Minneapolis, MN, for Employers Ins. of Wausau.
Ronald L. Cohen, Seward & Kissel, New York City, Mary A. Lau, Robert J. Asti, Lau, Lane, Pieper & Asti, P.A., Tampa, FL, for Employers Ins. Co. of Wausau.
George A. Vaka, Russell S. Buhite, Fowler White Gillen Boggs Villareal and Banker, P.A., Tampa, FL, for North Star Reinsurance Co.
Roger E. Warin, Daniel C. Sauls, John A. Flyger, Steptoe & Johnson, Washington, DC, for Highlands Ins. Co., Old Republic Ins. Co., St. Paul Surplus Lines Ins. Co.
James P. Schaller, Christine A. Nykiel, Jackson & Campbell, Washington, DC, for American Home Assur. Co., AIU Ins. Co., Granite State Ins. Co., Lexington Ins. Co., Nat. Union Fire Ins. Co. of Pittsburgh, PA Thomas B. Mimms, Jr., MacFarlane Ferguson, Tampa, FL, for American Home Assur. Co., AUI Ins. Co., Highlands Ins. Co., Lexington Ins. Co., Old Republic Ins. Co., Granite State Ins. Co., National Union Fire Ins. Co. of Pittsburgh, PA, Employers Mut. Cas. Co., American Ins. Co., Nat. Sur. Co., St. Paul Surplus Lines Ins. Co.
Elizabeth B. Sandza, Cynthia T. Andreason, Leboeuf, Lamb, Leiby & MacRae, Washington, DC, for Gibraltar Ins. Co., Hudson Ins. Co.
David C. McLauchlan, Lord Bissell & Brook, Chicago, IL, Deborah M. Paris, Paris & Hanna, P.A., Tampa, FL, for Lloyds of London.
Jack Willis, Allianz Underwriters Ins. Co., Los Angeles, CA, for Allianz Underwriters Ins. Co.
Lynn Bregman, David Donovan, John Siddeek, Wilmer Cutler & Pickering, Washington, DC, for Ins. Co. of North America, California Union Ins. Co.
Meryl R. Lieberman, Daniel W. Morrison, III, Wilson, Elser, Moskowitz, Edelman & Dicker, White Plains, NY, for General Acc. Fire & Life Assur. Co., William J. Bowman, Hogan & Hartson, Washington, DC, Robert H. Berkes, Barbara Hodous, Bodkin, McCarthy, Sargent & Smith, Los Angeles, CA, W. Gray Dunlap, Jr., Judith W. Simmons, De La Parte & Gilbert, Tampa, FL, for Hartford Indem. Co., Twin City Fire Ins. Co., First State Ins. Co.
Robert J. Bates, Jr., Maryann C. Hayes, Pope & John, Ltd., Chicago, IL, for Eric Reinsurance Co., American Re-Insurance Co., Zurich Ins. Co.
Virginia M. Vermillion, David Schroeder, Gleason, McGuire & Shreffler, Chicago, IL, for Employers Mut. Cas. Co., Allstate Ins. Co.
Wilson M. Brown, III, Lawrence A. Nathanson, Drinker Biddle & Reath, Philadelphia, PA, for American Motorists Ins. Co., Lumbermens Mut. Cas. Co.
Elizabeth G. Repaal, Harris Barrett Mann & Dew, St. Petersburg, FL, for Allstate Ins. Co.
Gregory J. Willis, Walton, Lantaff, Schroeder & Carson, Miami, FL, for Florida Ins. Guar. Co.
James E. Rocap, III, Cathy J. Burdette, Michael J. Barta, Miller, Cassidy, Larroca & Lewin, Washington, DC, Mark M. Schabacker, Arnold, Morris, Frank & Schabacker, P.A., Tampa, FL, for Aetna Cas. & Sur. Co.
Rick Dalan, St. Petersburg, FL, for Royal Indem. Co.
Edward M. Waller, Jr., Fowler White Gillen Boggs Villareal and Banker, P.A., Tampa, FL, for American Motorists Ins. Co.
Louis Schulman, Butler Burnette & Pappas, Tampa, FL, for Continental Ins. Co., Intern. Ins. Co., U.S. Fire Ins. Co., The American Centennial Ins. Co.
Robert J. Kelly, McElroy Deutsch & Mulvaney, Morristown, NJ, for Intern. Ins. Co., U.S. Fire Ins. Co.
Susan B. Morrison, Morrison, Morrison & Gregory, P.A., Tampa, FL, Thomas J. Quinn, William J. Cleary, Mendes & Mount, New York City, for Barrett and London Market Companies.
William E. McGrath, Jr., Golden, Rothschild, Spagnola & Difazio, Somerville, NJ, Michael M. Ingram, John A.C. Guyton, III, Alley & Ingram, Tampa, FL, for Transport Ins. Co.
Michael F. Aylward, Morrison, Mahoney & Miller, Boston, MA, Benjamin H. Hill, III, Dennis P. Waggoner, Hill, Ward & Henderson, Tampa, FL, for Transamerican Premier Ins. Co.
Warren D. Hamann, James F. Asher, Kimbrell & Hamann, Miami, FL, Michael Gallagher, German, Gallagher & Murtagh, Philadelphia, PA, for Stonewall Ins. Co.
ORDER GRANTING THE INSURANCE COMPANY'S MOTION FOR PARTIAL SUMMARY JUDGMENT THAT DEBTOR BEARS THE BURDEN TO PROVE ITS ENTITLEMENT TO COVERAGE ON A DUTY TO INDEMNIFY STANDARD BASED ON THE ACTUAL FACTS OF THE UNDERLYING BUILDING CLAIMS
THIS CAUSE came on for hearing upon the Insurance Company's1 Motion for Partial Summary Judgment that Debtor Bears the Burden to Prove Its Entitlement to Coverage on a Duty to Indemnify Standard Based on the Actual Facts of the Underlying Building Claims. The Court, having heard the argument of counsel and having reviewed the record, finds as follows:
The instant Motion seeks a declaration, with respect to the asbestos-related property damage claims, that Debtor bears the burden of proving it is entitled to be indemnified by the Insurance Company. To carry this burden, the Insurance Company contends, Debtor must prove—on a case-by-case basis or more generally—that the actual facts (as opposed to the complaint allegations) of the underlying asbestos-related property damage claims fall within the insurance coverage provided.
Debtor does not dispute it bears the burden of proving it is entitled to be indemnified by the Insurance Company. Applicable law2 is clear on this point: an insured seeking to recover on an insurance policy has the burden of proving a loss and demonstrating coverage under the policy. See, e.g., Hudson Ins. Co. v. Double D Mgmt. Co., 768 F.Supp. 1542 (M.D.Fla.1991); Mutual Life Ins. Co. v. Ewing, 151 Fla. 661, 10 So.2d 316 (1942); Hays v. Country Mut. Ins. Co., 28 Ill.2d 601, 192 N.E.2d 855 (1963); Inland Rivers Serv. Corp. v. Hartford Fire Ins. Co., 66 Ohio St.2d 32, 20 O.O.3d 20, 418 N.E.2d 1381 (1981).
One of Debtor's disputes with the Insurance Company with respect to this particular Motion is whether Debtor must prove the actual facts of each and every one of the underlying asbestos-related property damage claims.3 Debtor agrees with the Insurance Company that mere complaint allegations cannot be relied upon to establish entitlement to indemnification. Debtor, however, perceives the Insurance Company is requesting a repetitive, tedious, case-by-case factual inquiry with respect to each underlying asbestos-related property damage claim.
The Insurance Company, though, is not seeking such a determination here. The Insurance Company has sought a determination that Debtor prove—on a case-by-case basis or more generally—that the actual facts of the underlying claims fall within the insurance coverage provided. The Insurance Company has suggested this Court select some manageable number of underlying claims for presentation of actual facts, postulating that if the Court is able to distill standard fact patterns applicable to a number of the asbestos-related property damage claims, resolution of the coverage provided for asbestos-related property damage claims can proceed along that basis. Similar techniques have been implemented elsewhere in an effort to balance procedural fairness with judicial efficiency in the management of mass tort litigation. See, e.g., Watson v. Shell Oil Co., 979 F.2d 1014 (5th Cir.1992); UNR Indus. v. Continental Cas. Co., 942 F.2d 1101 (7th Cir.1991), cert. denied, ___ U.S. ___, 112 S.Ct. 1586, 118 L.Ed.2d 305 (1992); Jenkins v. Raymark Indus., 782 F.2d 468 (5th Cir.1986).
The Insurance Company's suggested procedure appears to be exactly what Debtor is seeking as well. Debtor shall select up to eight of the underlying asbestos-related property damage claims which it determines may be representative of a number of underlying claims. At a minimum, Debtor will have to establish with respect to each representative claim: (1) property damage did occur, (2) the property damage that occurred was within the range of risks covered by the insurance policies, and (3) the date the property damage occurred so as to ascertain whether insurance coverage was triggered. If Debtor cannot establish factual scenarios of general application, Debtor shall have to prove on a case-by-case basis that any asbestos-related property damage which did occur was within the range of risks covered by the insurance policies and occurred during the period...
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