Mine Safety Appliances Co. v. N. River Ins. Co.

• Decision Date: 31 March 2014
• Docket Number: No. 2:09cv348.,2:09cv348.
• Citation: 73 F.Supp.3d 544
• Parties: MINE SAFETY APPLIANCES COMPANY, Plaintiff, v. The NORTH RIVER INSURANCE COMPANY and Riverstone Claims Management LLC, Defendants.
• Court: U.S. District Court — Western District of Pennsylvania

73 F.Supp.3d 544

MINE SAFETY APPLIANCES COMPANY, Plaintiff

v.The NORTH RIVER INSURANCE COMPANY and Riverstone Claims Management LLC, Defendants.

No. 2:09cv348.

United States District Court, W.D. Pennsylvania.

Signed March 31, 2014.

George L. Stewart, Brian T. Himmel, Michael H. Sampson, Robert A. Nicholas, Reed Smith LLP, Philadelphia, PA, for Plaintiff.

Dennis O. Brown, Gordon & Rees LLP, Hartford, CT, Alan S. Miller, Bridget M. Gillespie, Henry M. Sneath, Picadio, Sneath, Miller & Norton, Pittsburgh, PA, Kenneth G. Katel, Musick, Peeler & Garrett LLP, Los Angeles, CA, William E. Murray, Gordon & Rees LLP, Glastonbury, CT, for Defendants.

OPINION

DAVID STEWART CERCONE, District Judge.

Plaintiff commenced this action seeking redress for defendant North River Insurance Company's (“defendant”) failure to pay proceeds under an umbrella commercial general liability policy for tendered losses arising out of underlying lawsuits advancing personal injury and wrongful death claims against plaintiff. Presently before the court are motions to file documents under seal and to redact privileged and/or confidential information from briefs and/or statements of material fact to be submitted in conjunction with each party's contemplated motion for summary judgment. For the reasons set forth below, plaintiff's motion will be denied and defendant's motion will be granted in part and denied in part.

Plaintiff's averments place the parties' dispute in the following context. “This is [an insurance coverage action] for breach of contract and statutory bad faith arising out of the failure and refusal of [defendant North River Insurance Company] (as the issuer of an umbrella liability insurance policy to [plaintiff] ) ... to honor the contractual and legal obligations [owed to plaintiff] in connection with asbestos, silica, and coal workers' pneumoconiosis

(“CWP”) bodily injury (including death resulting therefrom) lawsuits in which [plaintiff] has been named as a defendant.” Amended Complaint at ¶ 1. The applicable umbrella liability insurance policy (“the policy”) allegedly obligates defendant to pay for defense costs and to indemnify plaintiff for amounts paid in settlement and satisfaction of judgment in those bodily injury lawsuits. Id. at ¶ 2. The policy follows the form of a Hartford policy. Id. at ¶ 13. Defense costs assertedly are “in addition to the applicable limit of liability of” the policy. Id. at ¶ 19.

“Since at least the 1980s, [plaintiff] has been sued in numerous bodily injury lawsuits in jurisdictions across the country, the majority of which involve respiratory protection and/or protective clothing products allegedly manufactured and sold by [plaintiff] (the “Underlying Claims”).” Id. at ¶ 20. Plaintiff began to tender numerous settled underlying claims to defendant for indemnification in 2007 and continued to do so in 2008. Id. at ¶¶ 24–26. Plaintiff reiterated its demand for payment in February of 2009 and informed defendant that pursuant to J.H. France Refractories Co. v. Allstate Insurance Co., 534 Pa. 29, 626 A.2d 502 (1993), it was selecting defendant “to assume responsibility pursuant to the Policy for the indemnity and defense costs associated with other settled Underlying Claims” which encompassed the settlement of lawsuits involving claims by approximately 400 claimants. Id. at ¶ 28. Plaintiff seeks to establish that defendant is in breach for failure to abide by the policy provisions governing indemnity for covered losses for bodily injury claims in the amount of $20,274,186.00 and defense costs of $1,107,375.00. Id. at ¶¶ 17–19, 29, 39–43. Although claims exhausting the aggregate policy limit have been tendered to defendant, plaintiff continues to incur defense costs on the underlying claims. Id. at ¶ 32.

In addition, plaintiff has designated defendant “to assume responsibility for the defense costs associated with certain open Underlying Claims and certain closed-but-not-settled Underlying Claims, as well as certain general expenses billed by [plaintiff's] national coordinating counsel and local defense counsel” as well as certain “non-settled Underlying Claims brought by another approximately 400 claimants.”Id. at ¶ 30. The defense costs for these claims and the general expenses are in excess of $8,900,000.00. Id. at ¶ 31.

Defendant assertedly has failed and refused to comply with its obligations under the policy. Id. at ¶ 34. It has not paid anything toward the amounts claimed by plaintiff. Id. at ¶ 34. Instead, it has responded with “a carefully and deliberately orchestrated effort to delay and/or avoid payment of proceeds due under the Policy, with the ultimate goal of leveraging [plaintiff] into accepting far less than that to which it is entitled under the Policy (and under other excess liability policies that [defendant] issued to [plaintiff].” Id. at ¶ 35. This effort has included:

(a) raising spurious questions regarding exhaustion of the Hartford policy; (b) raising spurious questions regarding the integrity of certain of [plaintiff's] local counsel, when that same local counsel had been relied on for years by other of [plaintiff's] insurers; (c) positing that the Policy does not obligate it to pay defense costs in addition to limits, when the Policy could not state [defendant's] obligation to do so more clearly; (d) positing, after the fact, that [plaintiff] was required to obtain jury research to substantiate the reasonableness of amounts that it paid to settle certain claims, while never suggesting before the fact that such research was important to [defendant] or offering to pay for such research; (e) positing that [plaintiff's] claims experience in certain jurisdictions is irrelevant to the amounts that plaintiff has paid to settle Underlying Claims that have been presented for reimbursement under the Policy; (t) demanding that [plaintiff] provide reams of historical claims data that is wholly irrelevant to the Underlying Claims for which [plaintiff] has demanded payment under the Policy, and refusing to make such payments until [plaintiff] does so (and, even where [plaintiff] does so, still avoiding payment by simply issuing a new set of irrelevant and burdensome information requests); (g) refusing [plaintiff's] invitations to discuss directly with [plaintiff's] local and national counsel the basis for settlement recommendations that [plaintiff's] local counsel has made; (h) withholding from [plaintiff] information that [defendant] has learned in connection with other of its insureds who, like [plaintiff], are facing thousands of toxic tort claims in jurisdictions that are widely regarded as “plaintiff friendly,” and otherwise refusing to share its own expertise (on matters such as jury awards and settlement amounts that occur in various jurisdictions throughout the United States) with [plaintiff]; (i) eschewing its fiduciary obligation to work in a collaborative fashion with [plaintiff] to successfully defend and resolve Underlying Claims in favor of an inexplicably hostile and adversarial approach to [plaintiff]; and G) refusing to pay any Underlying Claims until [plaintiff] has provided claims information that goes far beyond what the Policy, the law, and even [plaintiff's] other insurers, require.

Id. at ¶ 36. Defendant's orchestrated effort constitutes both a breach of its duties under the policy and bad faith insurance practices in violation of 42 Pa.C.S. § 8371. Id. at ¶¶ 37–38.¹

Plaintiff further explains in its brief that it seeks to establish that defendant owes coverage for 729 underlying claims. Declaration of William J. Berner (Doc. No. 653–5) at ¶ 5; Plaintiff's Brief in Support of Motion for Leave to File Documents under Seal and to Redact (Doc. No. 653) at 11. Sixty-six of those claims were still pending when plaintiff filed the instant motion. Id. Plaintiff also is defending more than 9,100 additional personal injury cases relating to the same or similar products. Id.

The parties have filed their respective motions to seal in conjunction with their respective contemplated motions for summary judgment. These motions can only be understood to be complex and voluminous:

approximately one year ago the parties filed 10 separate motions on summary judgment seeking an adjudication on an issue-by-issue basis. At that time they also sought to file under seal separate briefs on each issue and numerous related documents, including briefs, concise statements of material fact and appendices in support. All of these filings were struck from the record for failure to comply with the controlling authority governing the submission of materials under seal in support of relief on the merits and as otherwise moot. See Order of March 12, 2013 (Doc. No. 645) (striking Doc. Nos. 595, 596, 600, 604, 606, 607, 611, 612, 616, 617, 618, 623, 624, 628, 631, 633, 635, and 637 and directing the Clerk to remove the documents from public view; denying 599, 603, 605, 610, 615, 622, and 630 for failure to comply with the controlling authority governing the submission of materials under seal in support of affirmative relief on the merits and otherwise denying as moot; and denying 594 as moot). A concomitant order was issued setting the schedule and procedures for re-filing motions for summary judgment and the submissions in conjunction therewith. See Order of March 12, 2013 (Doc. No. 646). The instant motions were filed pursuant to this scheduling order.

Extensive discovery was conducted pursuant to a protective order permitting the parties to designate documents and information as confidential. See Protective Order of January 4, 2011 (Doc. No. 69). This order authorized any party to make such a designation on the basis that the material being produced by the party or a third party contained “confidential, personal, trade secret, and/or commercial information, as those terms are defined under Federal law, not generally available in the public domain.” Id. at ¶ 8. Discovery was coordinated with a companion case...