Rossello v. Zurich Am. Ins. Co., No. 24, September Term, 2019

• Court: Court of Special Appeals of Maryland
• Writing for the Court: Getty, J.
• Citation: 468 Md. 92,226 A.3d 444
• Parties: Patrick ROSSELLO v. ZURICH AMERICAN INSURANCE COMPANY
• Docket Number: No. 24, September Term, 2019
• Decision Date: 03 April 2020

468 Md. 92
226 A.3d 444

Patrick ROSSELLO
v.
ZURICH AMERICAN INSURANCE COMPANY

No. 24, September Term, 2019

Court of Appeals of Maryland.

April 3, 2020

Argued by Gardner M. Duvall (Ioana Kastellorizios, Whiteford, Taylor & Preston, LLP, Baltimore, MD; Gary J. Ignatowski, Law Offices of Peter G. Angelos, P.C., Baltimore, MD), on brief, for Appellant.

Argued by Harry Lee (Catherine D. Cockerham, Steptoe & Johnson LLP, Washington, DC; Kamil Ismail, Goodell, DeVries, Leech & Dann, LLP, Baltimore, MD), on brief, for Appellee.

John Amato, IV, Esquire, Goodman Meagher & Enoch, LLP, 111 N. Charles Street, Baltimore, MD 21201, for Amicus Curiae Daquantay Robinson and Brionna Heckstall.

Stuart M.G. Seraina, Esquire, Louis P. Malick, Esquire, Kramon & Graham, P.A., One South Street, Suite 2600, Baltimore, MD 21202, for Amicus Curiae CX Reinsurance Company Limited.

Lee H. Ogburn, Esquire, Steven M. Klepper, Esquire, Kramon & Graham, P.A., One South Street, Suite 2600, Baltimore, MD 21202, for Amicus Curiae Travelers Casualty and Surety Company.

Adam J. Singer, Esquire, Laura A. Foggan, Esquire, Crowell & Moring LLP, 1001 Pennsylvania Ave., N.W., Washington, DC 20004, for Amicus Curiae The Complex Insurance Claims Litigation Association.

Argued before: Barbera, C.J., McDonald, Watts, Hotten, Getty, Booth, Clayton Greene, Jr. (Senior Judge, Specially Assigned) JJ.

Getty, J.

468 Md. 95

Patrick Rossello was diagnosed with mesothelioma in 2013, nearly forty years after exposure to asbestos at his place of work in 1974. Mr. Rossello subsequently won a $2,682,847.26 judgment against the asbestos installer. Later, the Circuit Court for Baltimore City issued a writ of garnishment requiring

468 Md. 96

the insurer of the asbestos installer to satisfy the judgment. After a series of motions resulting in the court granting the insurer's motion to stay the garnishment, both parties filed cross-motions for summary judgment. The question before the circuit court was how to allocate loss, if at all, among various triggered insurance policies or periods of no insurance because the asbestos installer was only insured by the insurer from 1974 to 1977 through four separate Comprehensive General Liability policies. Mr. Rossello argued that the insurer was liable for the entirety of the judgment spanning forty years, but the Circuit Court for Baltimore City found that Mr. Rossello's damages must be allocated on a pro rata, time-on-the-risk basis across all insured and insurable periods triggered by Mr. Rossello's injuries, i.e., 1974 to 1985—with 1985 being the last practicable year that the

226 A.3d 447

asbestos installer could have acquired asbestos liability insurance. Now, we consider whether the circuit court properly applied the pro rata allocation approach, or instead, whether it should have applied a joint-and-several approach that would have required the insurer to cover the entire judgment.

BACKGROUND

A. The Comprehensive General Liability Policies.

Lloyd E. Mitchell, Inc. ("Mitchell") was a mechanical contractor that sold, distributed, and installed products containing asbestos until 1976 when it ceased all operations. From January 1, 1974 through July 31, 1977, Mitchell was insured by the Maryland Casualty Company¹ under a series of standard Comprehensive General Liability ("CGL")² policy agreements

468 Md. 97

(collectively, the "Policies").³ Maryland Casualty Company issued one primary insurance policy and one umbrella/excess policy to Mitchell for each of the following policy periods:

January 1, 1974 to January 1, 1975;

January 1, 1975 to January 1, 1976;

January 1, 1976 to January 1, 1977; and

January 1, 1977 to July 31, 1977.

The relevant policy language is substantively the same for each of the Policies.

The Policies require the Maryland Casualty Company to pay on behalf of Mitchell "all sums which the insured shall become legally obligated to pay as damages because of ... bodily injury ... to which this insurance applies, caused by an occurrence." The "Definitions" section of the Policies provide two related and important definitions:

"bodily injury" means bodily injury, sickness or disease sustained by any person which occurs during the policy period, including death at any time resulting therefrom;

"occurrence" means 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.

The Policies contain two limits on Mitchell's liability: a "per occurrence" limit and an "aggregate" limit. The per occurrence

468 Md. 98

limit is the maximum amount Mitchell will pay for all losses resulting from any one occurrence. The aggregate limit is the maximum total amount Mitchell will pay

226 A.3d 448

for all insurable losses regardless of the number of occurrences or losses. Both the per occurrence and the aggregate limits are $1 million for Mitchell's primary policies and $2 million for the umbrella/excess policies.

After it ceased operations in 1976, Mitchell's last policy expired on July 31, 1977, after which it never again acquired insurance.

B. Mr. Rossello's Injury and Suit.

In 1974, Petitioner Patrick Rossello worked in the Union Trust Bank Building in which Mitchell was performing construction and renovations. Mr. Rossello unknowingly inhaled asbestos originating from the construction products used by Mitchell. Mr. Rossello's injuries developed over the next forty years, manifesting in a mesothelioma diagnosis in 2013. Mr. Rossello brought this strict liability and negligent failure to warn action against Mitchell in the Circuit Court for Baltimore City. The case proceeded to trial in April 2016 and the jury returned a verdict in favor of Mr. Rossello for compensatory damages in the amount of $8,114,166.79. The trial court reduced the judgment for the settlement of joint tortfeasors⁴ and entered a final judgment in the amount of $2,682,847.26 plus interest and costs.⁵

To collect his judgment, Mr. Rossello initiated garnishment proceedings against Respondent Zurich American Insurance Company ("Zurich"), successor by merger to Maryland Casualty Company. The Circuit Court for Baltimore City issued a

468 Md. 99

writ of garnishment directed at Zurich as insurer of Mitchell. After a series of motions resulting in the court granting Zurich's motion to stay the garnishment, both parties filed cross-motions for summary judgment. The question before the circuit court was how much Zurich was responsible for paying on the judgment against Mitchell. Mr. Rossello contended that the entire $2,682,847.26 judgment should be satisfied by the 1974 CGL policy, not subject to the per occurrence or aggregate limits. Zurich rebutted that the relevant period of time to allocate the judgment is forty years, 1974 through 2013, i.e., the year of exposure through the year of manifestation and diagnosis of mesothelioma. In that scenario, Zurich would be responsible for one-fortieth of the judgment (or $67,071.19) for each year of coverage, subject to aggregate limits. Zurich argued in the alternative that the relevant time period is twelve years, from 1974 through 1985—1985 being the last year that asbestos risk insurance was available to Mitchell. In that scenario, $223,570.60 (one-twelfth of $2,682,847.26) would be the maximum amount recoverable from Zurich as to any one policy year from 1974 through 1977, while Mitchell stood self-insured from 1986 to 2013.

In a written opinion and order, the circuit court rejected Mr. Rossello's contention that he is entitled to the entire judgment under the 1974 policy. The circuit court applied Maryland pro rata allocation principles, as adopted in Lloyd E. Mitchell, Inc. v. Maryland Casualty Co. , 324 Md. 44, 595 A.2d 469 (1991) and

226 A.3d 449

Mayor and City Council of Baltimore v. Utica Mutual Insurance Co. , 145 Md. App. 256, 802 A.2d 1070 (2002).⁶ Under those principles, the court found that Mr. Rossello's damages must be allocated on a pro rata, time-on-the-risk basis across all insured and insurable periods triggered by Mr. Rossello's injuries—i.e., 1974 to 1985. The court explained:

468 Md. 100

The instructions of Lloyd and Utica are properly applied in this case. Coverage under the Zurich CGL policy was first triggered by [Mr. Rossello's] exposure and inhalation of asbestos in 1974, as the jury found on the evidence at trial. The medical evidence at trial established in the circumstances of the case, that the occurrence of [Mr. Rossello's] bodily injury continued at least until manifestation of [Mr.

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