Plastics Engineering Co. v. Liberty Mut. Ins. Co.
| Decision Date | 27 October 2006 |
| Docket Number | No. 04-CV-825.,04-CV-825. |
| Citation | 466 F.Supp.2d 1071 |
| Parties | PLASTICS ENGINEERING COMPANY, Plaintiff, v. LIBERTY MUTUAL INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Eastern District of Wisconsin |
Jeffrey O. Davis, Keith A. Bruett, Quarles & Brady LLP, Milwaukee, WI, for Plaintiff.
John C. Sullivan, Post & Schell PC, Philadelphia, PA, Michael J. Cohen, Pamela Jane Tillman, Meissner Tierney Fisher & Nichols SC, Milwaukee, WI, for Defendant.
DECISION AND ORDER
On September 1, 2004, Plastics Engineering Company ("Plenco") filed a complaint against Liberty Mutual Insurance Company ("Liberty") seeking a declaratory judgment as to Liberty's indemnification obligation regarding lawsuits against Plenco for its manufacture of products containing asbestos.
Plenco filed an answer and asserted forty-three affirmative defenses. Plenco also filed a counterclaim, also seeking a declaratory judgment as to its indemnification obligation and seeking recoupment or reimbursement of any claims paid in excess of its obligations. This case was randomly assigned to this court and the parties, have consented to the full jurisdiction of a magistrate judge. On December 15, 2005, based upon stipulated facts, the parties each filed a motion for summary judgment. Although other issues are indirectly raised in this case, this court has limited itself to resolving the issues that were fully briefed in the parties' motions for summary judgment. The pleadings on these motions are closed that matters are ready for resolution.
From 1950 and until about 1983, Plenco manufactured and sold certain compounds that incorporated asbestos. (Stip. Fact 3.) Plenco has been named as a defendant in hundreds of lawsuits involving thousands of claimants in numerous jurisdictions alleging bodily injury or wrongful death related to, or arising from, exposure to asbestos-containing products sold by Plenco. (Stip. Fact 4.) These claimants generally allege that they have been injured over a period of time, beginning with their first exposure to asbestos, but that their asbestos-related injuries did not manifest until long after their exposure to the asbestos. (Stip. Fact 6.) The claimants' exposures are alleged to have occurred at different times and at different locations. (Stip. Fact 6.)
Liberty has provided various insurance policies to Plenco. From February 9, 1968 through January 1, 1986, Liberty insured Plenco under a primary policy with coverage limits of $500,000 per occurrence and $500,000 annual aggregate. (Stip. Fact 19.) From January 1, 1986 through January 1, 1989, Liberty insured Plenco under a primary policy with coverage limits of $1,000,000 per occurrence and $1,000,000 annual aggregate. (Stip. Fact 19.)
Liberty also insured Plenco under umbrella excess liability policies from May 8, 1970 through January 1, 1984. (Stip. Fact 20.) From May 8, 1970 through December 19, 1972, the coverage limits under each policy were $1,000,000 per occurrence and $1,000,000 annual aggregate. (Stip. Fact 20.) From December 19, 1972 through January 1, 1982, the coverage limits under each policy were $5,000,000 per occurrence and $5,000,000 annual aggregate. (Stip. Fact 20.) From January 1, 1982 through January 1, 1984, the coverage limits under each policy were $1,000,000 per occurrence and $1,000,000 annual aggregate. (Stip. Fact 20.) From January 1, 1984 through January 1, 1986, Liberty did not provide Plenco with umbrella excess liability coverage. (Stip. Fact 20.) From January 1, 1986 through January 1, 1988 Liberty again provided Plenco with umbrella excess liability coverage with coverage limits for each policy at $10,000,000 per occurrence and annual aggregate. (Stip. Fact 20.)
The primary policies issued by Liberty Mutual to Plenco for the period January 1, 1961 through January 1, 1967 include the following insuring clause:
Coverage a — bodily injury liability
To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person that caused by accident
* * *
With respect to such insurance as is afforded by this policy, the Company shall:
(a) defend any suit against the insured alleging such injury, sickness, disease or destruction and seeking damages on account thereof, even if such suit is groundless, false or fraudulent; but the Company may make such investigation, negotiation and settlement of any claim or suit as it deems expedient....
(Stip. Fact 22.)
The primary policies issued by Liberty Mutual to Plenco for the period January 1, 1967 through January 1, 1989 include the following or similar language:
The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of Coverage A. bodily injury or Coverage B. property damage to which this policy applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent, and may make such investigation and settlement of any claim or suit as it deems expedient, but the company shall not be obligated to pay any claim or judgment or to defend any suit after the applicable limit of the company's liability has been exhausted by payment of judgments or settlements.
(Stip.Fact.23.)
Although "bodily injury" is not defined in the policies for the period January 1, 1961 through January 1, 1967, (Stip.Fact.24), the polices for the period January 1, 1967 through January 1, 1973 define "bodily injury" as "bodily injury, sickness, or disease sustained by any person," (Stip.Fact.25.) The primary policies issued by Liberty Mutual to Plenco for the period January 1, 1973 through January 1, 1989 define "bodily injury" as: "bodily injury, sickness or disease sustained by any person which occurs during the policy period, including death at any time resulting therefrom." (Stip. Fact 27.)
The primary policies issued by Liberty Mutual to Plenco for the period January 1, 1967 through January 1, 1973 define "occurrence" as: "an accident, including injurious exposure to conditions, which results, during the policy period, in bodily injury or property damage neither expected nor intended from the standpoint of the insured." (Stip. Fact 28.) The primary policies issued by Liberty Mutual to Plenco for the period January 1, 1973 through January 1, 1989 define "occurrence" using the following or similar language: "an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured." (Stip. Fact 29.)
The primary policies issued by Liberty Mutual to Plenco for the period January 1, 1967 through January 1, 1973 contain a Limits of Liability provision stating:
Regardless of the number of (1) insureds. under this policy, (2) persons or organizations who sustain bodily injury or property damage or (3) claims made or suits brought on account of bodily injury or property damage, the company's liability is limited as follows:
Coverage A — The limit of bodily injury liability stated in the declarations as applicable to "each person" is the limit of the company's liability for all damages because of bodily injury sustained by one person as the result of any one occurrence; but subject to the above provision respecting "each person", the total liability of the company for all damages because of bodily injury sustained by two or more persons as the result of any one occurrence shall not exceed the limit of bodily injury liability stated in the declarations as applicable to "each occurrence".
. . .
Coverages A and B — For purposes of determining the limit of the company's liability, all bodily injury and property damage arising out of continuous or repeated exposure to substantially the same general conditions shall be considered as arising out of one occurrence.
(Stip. Fact 30.)
The primary policies issued by Liberty Mutual to Plenco for the period January 1, 1973 through January 1, 1977 contain a Limits of Liability provision stating:
Regardless of the number of (1) insureds under this policy, (2) persons or organizations who sustain bodily injury or property damage, or (3) claims made or suits brought on account of bodily injury or property damage, the company's liability is limited as follows:
Coverage A — The total liability of the company for all damages, including damages for care and loss of services, because of bodily injury sustained by one or more persons as the result of any one occurrence shall not exceed the limit of bodily injury liability stated in the declarations as applicable to "each occurrence."
. . .
Coverages A and B — For purposes of determining the limit of the company's liability, all bodily injury and property damage arising out of continuous or repeated exposure to substantially the same general conditions shall be considered as arising out of one occurrence.
(Stip.Fact.31.)
The primary policies issued by Liberty Mutual to Plenco for the period January 1, 1977 through January 1, 1984 contain a Combined Single Aggregate Limit of Liability Endorsement using the following or similar language:
COMBINED SINGLE AGGREGATE LIMIT OF LIABILITY
Regardless of the number of (1) insureds. under this policy, (2) persons or organizations who sustain bodily injury or property damage or (3) claims made or suits brought on account of bodily injury or property damage, the company's liability is limited as follows:
Coverage A and B — The total liability of the company for all damages because of all bodily injury and property damage to which this policy...
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