Union Carbide Corp. v. Affiliated Fm Ins. Co.
| Citation | 2010 NY Slip Op 32557 |
| Decision Date | 16 September 2010 |
| Docket Number | Sequence Number: 048,Index No. 600804/04 |
| Parties | UNION CARBIDE CORPORATION, Plaintiff, v. AFFILIATED FM INSURANCE COMPANY, AIU INSURANCE COMPANY, ALLSTATE INSURANCE COMPANY (SUCCESSOR IN INTEREST TO NORTHBROOK EXCESS & SURPLUS INSURANCE COMPANY, F/K/A NORTHBROOK INSURANCE COMPANY), AMERICAN HOME ASSURANCE COMPANY, AMERICAN MOTORISTS INSURANCE COMPANY, AMERICAN RE-INSURANCE CORPORATION, APPALACHIAN INSURANCE COMPANY, ARGONAUT INSURANCE COMPANY, ATLANTA INTERNATIONAL INSURANCE COMPANY (SUCCESSOR IN INTEREST TO DRAKE INSURANCE COMPANY OF NEW YORK), ASSURANCE GROUPES JOSI S.A. - N.V, COMPAGNE BELGE D'ASSURANCES GENERALES, COMPAGNIE EUROPEENNE D'ASSURANCES INDUSTRIELLES S.A., HAENECOUR & CO. S.A., ROYALE BELGE S.A., L'UNION ATLANTIQUE DE REASSURANCES, ZURICH COMPAGNIE D'ASSURANCES S.A.-N. v. , BIRMINGHAM DIRE INSURANCE COMPANY OF PA, CENTENNIAL INSURANCE COMPANY, CENTRAL NATIONAL INSURANCE COMPANY OF OMAHA, COLUMBIA CASUALTY COMPANY, COMMERCIAL UNION INSURANCE COMPANY (AS SUCCESSOR TO EMPLOYERS' COMMERCIAL UNION INSURANCE COMPANY, THE EMPLOYERS' LIABILITY ASSURANCE CORPORATION, LTD. AND EMPLOYERS' SURPLUS LINES INSURANCE COMPANY), CONTINENTAL CASUALTY COMPANY, EMPLOYERS MUTUAL CASUALTY COMPANY, EVEREST REINSURANCE COMPANY (F/K/A PRUDENTIAL REINSURANCE COMPANY), FEDERAL INSURANCE COMPANY, GENERAL REINSURANCE CORPORATION, GRANITE STATE INSURANCE COMPANY, LEXINGTON INSURANCE COMPANY, ALLIANZ INTERNATIONAL INSURANCE COMPANY LTD., ALLIANZ VERSICHERUNGS AKTIENGESELLSHCAFT A.G., AMERICAN HOME ASSURANCE COMPANY, ANCON INSURANCE COMPANY (UK) LTD., BRITTANY INSURANCE COMPANY LTD., CHEMICAL INSURANCE COMPANY, COMPAGNIE D'ASSURANCES MARITIMES AERINNES ET TERRESTRES, EISEN UND STAHL RUCKVERSICHERUNGS, HEDDINGTON INSURANCE (UK) LTD., INSCO LIMITED, ITALIA ASSUCURAZIONI, LA PRESERVATRICE, LEXINGTON INSURANCE COMPANY, MITSUI SUMITOMO INSURANCE COMPANY (EUROPE), LTD., (K/K/A TAISHO MARINE & FIRE INSURANCE COMPANY (UK) LTD.), NEWFOUNDLAND AMERICAN INSURANCE COMPANY, LTD., NEW INDIA ASSURANCE COMPANY, LTD., NISSHIN FIRE & MARINE INSURANCE COMPANY LTD., REASEGURADORA NACIONAL SA, STOREBRAND INSURANCE COMPANY (UK) LTD., TOKIO MARINE & FIRE INSURANCE COMPANY (UK) LTD., ZURICH INTERNATIONAL, LTD, LUMBERMENS MUTUAL CASUALTY COMPANY, MT. MCKINLEY INSURANCE (F/K/A GIBRALTAR CASUALTY CO.), NATIONAL CASUALTY COMPANY, NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, NEW HAMPSHIRE INSURANCE COMPANY, NORTH STAR REINSURANCE CORPORATION, OLD REPUBLIC INSURANCE COMPANY, PEERLESS INSURANCE COMPANY, RIUNIONE ADRIATICE DI SICURTA S.P.A., SEATON INSURANCE COMPANY (F/K/A UNIGARD MUTUAL INSURANCE COMPANY (F/K/A UNIGARD MUTUAL INSURANCE COMPANY), ST. PAUL FIRE AND MARINE INSURANCE COMPANY, SENTRY INSURANCE COMPANY (AS ASSUMPTIVE REINSURER OF GREAT SOUTHWEST FIRE INSURANCE COMPANY), TRAVELERS INDEMNITY COMPANY, WESTPORT INSURANCE CORPORATION (F/K/A MANHATTAN FIRE & MARINE INSURANCE COMPANY, F/K/A PURITAN INSURANCE COMPANY), Defendants. |
| Court | New York Supreme Court |
2010 NY Slip Op 32557
UNION CARBIDE CORPORATION, Plaintiff,
v.
AFFILIATED FM INSURANCE COMPANY, AIU INSURANCE COMPANY, ALLSTATE INSURANCE COMPANY
(SUCCESSOR IN INTEREST TO NORTHBROOK EXCESS & SURPLUS INSURANCE COMPANY,
F/K/A NORTHBROOK INSURANCE COMPANY), AMERICAN HOME ASSURANCE COMPANY,
AMERICAN MOTORISTS INSURANCE COMPANY, AMERICAN RE-INSURANCE CORPORATION,
APPALACHIAN INSURANCE COMPANY, ARGONAUT INSURANCE COMPANY,
ATLANTA INTERNATIONAL INSURANCE COMPANY (SUCCESSOR IN INTEREST TO DRAKE INSURANCE COMPANY
OF NEW YORK), ASSURANCE GROUPES JOSI S.A.-N.V, COMPAGNE BELGE D'ASSURANCES
GENERALES, COMPAGNIE EUROPEENNE D'ASSURANCES INDUSTRIELLES S.A.,
HAENECOUR & CO. S.A., ROYALE BELGE S.A., L'UNION ATLANTIQUE DE REASSURANCES,
ZURICH COMPAGNIE D'ASSURANCES S.A.-N.v., BIRMINGHAM DIRE INSURANCE COMPANY
OF PA, CENTENNIAL INSURANCE COMPANY, CENTRAL NATIONAL INSURANCE COMPANY
OF OMAHA, COLUMBIA CASUALTY COMPANY, COMMERCIAL UNION INSURANCE COMPANY
(AS SUCCESSOR TO EMPLOYERS' COMMERCIAL UNION INSURANCE COMPANY, THE EMPLOYERS'
LIABILITY ASSURANCE CORPORATION, LTD. AND EMPLOYERS' SURPLUS LINES INSURANCE COMPANY),
CONTINENTAL CASUALTY COMPANY, EMPLOYERS MUTUAL CASUALTY COMPANY, EVEREST REINSURANCE
COMPANY (F/K/A PRUDENTIAL REINSURANCE COMPANY), FEDERAL INSURANCE COMPANY, GENERAL
REINSURANCE CORPORATION, GRANITE STATE INSURANCE COMPANY, LEXINGTON INSURANCE COMPANY,
ALLIANZ INTERNATIONAL INSURANCE COMPANY LTD., ALLIANZ VERSICHERUNGS AKTIENGESELLSHCAFT
A.G., AMERICAN HOME ASSURANCE COMPANY, ANCON INSURANCE COMPANY (UK) LTD., BRITTANY
INSURANCE COMPANY LTD., CHEMICAL INSURANCE COMPANY, COMPAGNIE D'ASSURANCES MARITIMES
AERINNES ET TERRESTRES, EISEN UND STAHL RUCKVERSICHERUNGS, HEDDINGTON INSURANCE
(UK) LTD., INSCO LIMITED, ITALIA ASSUCURAZIONI, LA PRESERVATRICE, LEXINGTON INSURANCE
COMPANY, MITSUI SUMITOMO INSURANCE COMPANY (EUROPE), LTD., (K/K/A TAISHO
MARINE & FIRE INSURANCE COMPANY (UK) LTD.), NEWFOUNDLAND AMERICAN INSURANCE
COMPANY, LTD., NEW INDIA ASSURANCE COMPANY, LTD., NISSHIN FIRE & MARINE INSURANCE
COMPANY LTD., REASEGURADORA NACIONAL SA, STOREBRAND INSURANCE COMPANY (UK) LTD.,
TOKIO MARINE & FIRE INSURANCE COMPANY (UK) LTD., ZURICH INTERNATIONAL, LTD,
LUMBERMENS MUTUAL CASUALTY COMPANY, MT. MCKINLEY INSURANCE
(F/K/A GIBRALTAR CASUALTY CO.), NATIONAL CASUALTY COMPANY, NATIONAL UNION FIRE
INSURANCE COMPANY OF PITTSBURGH, PA, NEW HAMPSHIRE INSURANCE COMPANY, NORTH STAR
REINSURANCE CORPORATION, OLD REPUBLIC INSURANCE COMPANY, PEERLESS INSURANCE COMPANY,
RIUNIONE ADRIATICE DI SICURTA S.P.A., SEATON INSURANCE COMPANY (F/K/A UNIGARD MUTUAL
INSURANCE COMPANY (F/K/A UNIGARD MUTUAL INSURANCE COMPANY), ST. PAUL FIRE AND MARINE
INSURANCE COMPANY, SENTRY INSURANCE COMPANY (AS ASSUMPTIVE REINSURER OF GREAT SOUTHWEST
FIRE INSURANCE COMPANY), TRAVELERS INDEMNITY COMPANY, WESTPORT INSURANCE CORPORATION
(F/K/A MANHATTAN FIRE & MARINE INSURANCE COMPANY, F/K/A PURITAN INSURANCE COMPANY), Defendants.
Sequence Number: 048
Supreme Court Of The State Of New York
County Of New York
Commercial Division.
Dated: September 9, 2010
Filed: September 16, 2010
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Charles Edward Ramos, J.
Motion sequence numbers 48 and 49 are consolidated herein for disposition.
The dispute at issue in this motion concerns the validity of a refusal of insurance coverage on the basis of a lack of fortuity of insured occurrences.
In motion sequence number 048, plaintiff Union Carbide Corporation (Union), moves for partial summary judgment striking the defense of the above-named defendants (together, Insurers), that there should be no coverage because Union expected or intended the damage for which they seek insurance.
In motion sequence number 049, the Insurers seek summary judgment based upon that same, aforementioned, defense.
According to the parties, Union began mining and milling short-fiber chrysotile asbestos near King City, California, in
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August 1963. It continued the operation until 1985, when it sold the business, including the mine, to a third party. Union sold its raw asbestos under the trade name "Calidria." Union never sold raw Calidria to consumers, but rather, to various manufacturers, who used it in finished products, such as joint compound, for resale to their own customers.
The insurance coverage that Union seeks from the Insurers is for bodily injury to individual claimants alleging injuries from exposure to processed forms of, or bulk use of, the Calidria asbestos that Union sold.
Insurers herein, from 1973 and through 1984, agreed to insure Union Carbide for "all sums" it became obligated to pay as a result of claims for "personal injury" during their respective policy periods. The policies issued by the Insurers (the Policies) are almost identical in their operative language, insuring Union for "ultimate net loss" paid as a result of an "Occurrence" during the period of the Policies. The Policies define the term "Occurrence" as follows:
The term "Occurrence" shall mean (a) an accident, or (b) an event, or continuous or repeated exposure to conditions, which unexpectedly results in personal injury, property damage or advertising liability (either alone or in any combination) during the policy period.
The Policies exclude coverage for intentional acts, stating:
This policy does not apply... to bodily injury, sickness, disease or death resulting therefrom, or property damage, caused intentionally by or at the direction of the insured.
Union, through this litigation, seeks the benefit of the
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insurance coverage under the Policies for bodily injuries due to asbestos exposure. The Insurers argue that coverage is not available to Union because it knew that asbestos caused disease, and that people were making claims as a result of the adverse affects of asbestos exposure.
Moreover, the Insurers maintain that Union is collaterally estopped from denying that knowledge and expectation of such bodily injuries as the result of a punitive damages judgment rendered against Union.
A party moving for summary judgment under CPLR 3212 (b) must show that "there is no defense to the cause of action or that the cause of action or defense has no merit." Thus, a movant should normally make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact. Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 (1985).
Only once this prima facie showing has been made does the burden shift to the non-movant to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action. Zuckerman, 49 NY2d at 562. Further, on a motion for summary judgment, the non-movant is entitled to the benefit of every favorable inference that may be drawn from the pleadings, affidavits, and competing contentions of the parties. Myers v Fir Cab Corp., 64 NY2d 806 (1985).
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Crucially, the test on a motion for summary judgment is whether the pleadings raise a triable issue of fact. Hartford Acc. & Indem. Co. v Wesolowski, 33 NY2d 169 (1973). The function of the court is one of issue finding not issue determination. Sillman, 3 NY2d at 404. The credibility of the parties is not a proper consideration for the court (S.J. Capelin Assocs. v Globe Mfg. Corp., 34 NY2d 338, 341 [1974]), and statements made in opposition to the motion should be accepted as true (Patrolmen's Benevolent Assn. Of City of N.Y. v City of New York, 27 NY2d 410, 415 [1971].
Here, there is no dispute that there was coverage during the alleged period, and that if the Occurrences for which Union seeks coverage were "fortuitous, "1 there would be coverage under the Policies.
Consequently, it is the Insurers' burden to demonstrate the positive intention of Union with regard to the Occurrences for which it seeks coverage, or that an exclusion for lack of fortuity applies. Consolidated Edison Co. of New York, Inc., 98 NY2d at 220.
I. Expected, Intended, or Non-Fortuitous Events
The Insurers' core argument is that there can be no insurance coverage for injuries or liabilities a policyholder expects to occur. As the initial burden of Union to establish
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coverage for the events and policy period has been satisfied, Insurers, as the parties relying on an exclusion (Viuker v Allstate Ins. Co., 70 AD2d 295, 299 [2nd Dept 1979]), bear the burden of...
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