R.T. Vanderbilt Co. v. Hartford Accident & Indem. Co.

• Citation: 333 Conn. 343,216 A.3d 629
• Decision Date: 08 October 2019
• Docket Number: SC 20000, (SC 20001), (SC 20003)
• Court: Supreme Court of Connecticut
• Parties: R.T. VANDERBILT COMPANY, INC. v. HARTFORD ACCIDENT AND INDEMNITY COMPANY et al.

333 Conn. 343

216 A.3d 629

R.T. VANDERBILT COMPANY, INC.

v.HARTFORD ACCIDENT AND INDEMNITY COMPANY et al.

SC 20000, (SC 20001), (SC 20003)

Supreme Court of Connecticut.

Argued March 28, 2019

Officially released October 8, 2019

Michael J. Smith, pro hac vice, with whom were Jeffrey R. Babbin, New Haven, and, on the brief, Michael Menapace, Hartford, Bryan W. Petrilla, pro hac vice, Laura P. Zaino, Hartford, Lawrence A. Serlin, pro hac vice, Michael G. Albano, Peter R. Reynolds, Hartford, Amy R. Paulus, pro hac vice, Michael L. Duffy, pro hac vice, William A. Meehan, Alexander J. Mueller, pro hac vice, Stephen T. Roberts, Robert M. Flannery, pro hac vice, Louis B. Blumenfeld, Hartford, Lawrence A. Levy, pro hac vice, Matthew G. Conway, Hartford, Kevin M. Haas, pro hac vice, Marianne May, pro hac vice, Michael F. Lettiero, Lawrence D. Mason, pro hac vice, John A. Lee, pro hac vice, James P. Sexton, Hartford, Daniel Hargraves, pro hac vice, David A. Slossberg, Milford, John E. Rodewald, pro hac vice, and Heather L. McCoy, West Hartford, for the appellants in SC 20001 (defendant TIG Insurance Company et al.).

John W. Cerreta, with whom were Kathleen D. Monnes, and, on the brief, Erick M. Sandler, Hartford, for the appellants in SC 20000 (defendant Travelers Casualty and Surety Company et al.).

Jacob M. Mihm and Marilyn B. Fagelson, New Haven, with whom were Proloy K. Das, Hartford, Rachel Snow Kindseth, New Haven, and, on the brief, Stephen Hoke, for the appellant in SC 20003 and the appellees in SC 20000 and SC 20001 (substitute plaintiff).

Lawrence D. Mason, pro hac vice, with whom, on the brief, were John A. Lee, pro hac vice, Michael F. Lettiero, Laura P. Zaino, Hartford, Lawrence A. Serlin, pro hac vice, William A. Meehan, Alexander J. Mueller, pro hac vice, Stephen T. Roberts, Robert M. Flannery, Heather L. McCoy, West Hartford, Jeffrey R. Babbin, New Haven, Michael Menapace, Hartford, Michael J. Smith, pro hac vice, Bryan W. Petrilla, pro hac vice, Matthew G. Conway, Hartford, Kevin M. Haas , pro hac vi ce, Marianne May, pro hac vice, Louis B. Blumenfeld, Hartford, and Lawrence A. Levy, pro hac vice, for the appellees in SC 20003 (defendant National Casualty Company et al.).

Alexander J. Mueller, pro hac vice, with whom was William A. Meehan, for the appellees (defendant Certain London Market Insurers et al.).

Stephanie V. Corrao and Laura A. Foggan, pro hac vice, filed a brief for the Complex Insurance Claims Litigation Association as amicus curiae in SC 20000 and SC 20001.

Michael T. McCormack, Wethersfield, filed briefs for the National Association of Manufacturers as amicus curiae in SC 20000, SC 20001 and SC 20003.

Robinson, C. J., and Palmer, D'Auria, Mullins, Kahn and Ecker, Js.

ROBINSON, C.J.

These certified appeals, which present us with several significant questions of insurance law, arise from coverage disputes between the plaintiff, R.T. Vanderbilt Company, Inc. (Vanderbilt),¹ and the defendants, who are numerous insurance companies (insurer defendants)² that issued primary and secondary comprehensive general liability insurance policies to Vanderbilt between 1948 and 2008, stemming from thousands of underlying lawsuits alleging injuries from exposure to industrial talc containing asbestos that Vanderbilt mined and sold. Vanderbilt and the insurer defendants appeal, upon our granting of their petitions for certification,³ from the judgment of the Appellate Court affirming in part and reversing in part numerous interlocutory decisions made by the trial court in connection with the first and second phases of a complex trial between the parties. R.T. Vanderbilt Co. v. Hartford Accident & Indemnity Co. , 171 Conn. App. 61, 75–76, 156 A.3d 539 (2017). On appeal, the insurer defendants claim that the Appellate Court improperly (1) upheld the trial court's adoption of a "continuous trigger" theory of coverage for asbestos related disease claims as a matter of law and the trial court's related preclusion of expert testimony on current medical science regarding the actual timing of bodily injury from such disease, (2) upheld the trial court's adoption of an "unavailability of insurance" exception to the "time on the risk" rule of contract law, which provides for pro rata allocation of defense costs and indemnity for asbestos related disease claims, and (3) interpreted pollution exclusion clauses in certain insurance policies as applicable only to claims arising from "traditional" environmental pollution, rather than to those arising from asbestos exposure in indoor working environments. In its appeal, Vanderbilt claims that the Appellate Court improperly construed occupational disease exclusions present in certain policies as not limited to claims brought by Vanderbilt's own employees. Because we conclude that the Appellate Court's comprehensive opinion properly resolved these significant issues, we affirm the judgment of the Appellate Court.

The opinion of the Appellate Court aptly sets forth the relevant background facts and procedural history.⁴ "Vanderbilt is a Connecticut corporation engaged in the mining and sale of various chemical and mineral products. In 1948, it began to produce industrial talc through its subsidiary, Gouverneur Talc Company. Vanderbilt continued to mine and sell talc until 2008, when it ceased production and sold off the last of its inventory.

"Over the past several decades, thousands of underlying actions have been filed against Vanderbilt in various jurisdictions throughout the United States, many of which remain pending. Those actions alleged that talc and silica mined and sold by Vanderbilt contained asbestos or otherwise caused diseases that are correlated to asbestos exposure, such as mesothelioma

, other asbestos related cancer, and asbestosis (collectively, asbestos related disease). In response, Vanderbilt has taken the position that its industrial talc does not contain asbestos. From the time that it started mining talc, Vanderbilt purchased or attempted to purchase primary and secondary comprehensive general liability insurance to cover the defense and indemnity costs of asbestos related claims.

"Vanderbilt brought the present action against several insurance companies that issued it primary insurance policies between 1948 and 2008 ...." Id., at 76–77, 156 A.3d 539 ; see footnote 2 of this opinion (listing defendants). In particular, Vanderbilt alleged that its primary insurers—Hartford Accident and Indemnity Company, and Continental Casualty Company, Columbia Casualty Company and Continental Insurance Company (collectively, Continental) "had breached their contractual obligations to pay their proper shares of defense and indemnity costs in the underlying actions. Vanderbilt also sought a declaratory judgment as to the parties' respective rights and responsibilities under the policies at issue.

"Continental subsequently filed a [third-party] complaint against various insurance companies that had provided secondary coverage—umbrella or excess⁵ —to Vanderbilt during the time that it was in the talc business." (Footnote altered.) R.T. Vanderbilt Co. v. Hartford Accident & Indemnity Co. , supra, 171 Conn. App. at 77, 156 A.3d 539. "Vanderbilt thereafter brought direct claims against these [third-party] secondary insurers." Id., at 78, 156 A.3d 539.

"Prior to the start of trial, the trial court issued a series of scheduling orders, pursuant to which it separated the trial into four phases. In the first two phases, which were tried to the court and have been completed, the court addressed Vanderbilt's declaratory judgment claims and related counterclaims and cross claims. The primary issue before the court in those phases was how insurance obligations are to be allocated with respect to long latency⁶ asbestos related claims alleging injuries that occur over the course of years or even decades and, therefore, potentially implicate multiple insurance policy periods. Specifically, in Phase I, the court addressed the question of how defense costs for the underlying actions were to be allocated as between Vanderbilt and its insurers. That required a determination of (1) the periods during which the defendants' insurance policies were in effect and (2) whether Vanderbilt should be treated as self-insured for any period so as to create an equitable obligation to contribute to the costs of its defense. In Phase II, the court considered the same questions with respect to indemnity costs. In that phase, the court also issued rulings with respect to the meaning of various policy provisions, the exhaustion of Vanderbilt's primary policies, and related issues. In Phase III of the trial, which also will be tried to the court, the court plans to adjudicate the defendants' claims for recovery of overpayment of insurance costs. In Phase IV, Vanderbilt's breach of contract claims against its insurers are to be tried to a jury." (Footnote altered.) Id., at 78–79, 156 A.3d 539.

"In addressing the allocation questions in Phases I and II, the trial court proceeded on the assumption that Connecticut follows a pro rata, [time on the risk] approach to allocating insurance obligations in long-tail cases. See footnote [6] of this opinion. Under that allocation scheme, the court assumed that a victim of asbestos related disease suffers continuous injuries commencing at the time of initial exposure to asbestos and extending until disease manifests and, therefore, that defense and indemnity costs must be allocated across all of the insurance policies on the risk (i.e., potentially liable) during that period (allocation block). The court further assumed that (1) the policyholder is responsible for a pro rata share of costs for any period during which it is uninsured or underinsured (proration to the insured), including so-called ‘orphan share’ periods covered by policies that were lost, destroyed, or issued by insurers that subsequently became insolvent; but (2) Connecticut has embraced an unavailability of...