The federal district court found that various claims for bodily injury against a supplier of asbestos products arose from multiple occurrences, increasing indemnity amounts available under the policy. Westfield Ins. Co. v. Continental Ins. Co., 2015 U.S. Dist. LEXIS 45437 (N.D. Ohio April 7, 2015).
Mahoning Valley Supply Company (MVS) was sued by numerous claimants who alleged that they had been injured by asbestos-containing products manufactured by third parties, but supplied by MVS. The claimants alleged exposure to asbestos fibers at a variety of job sites, on numerous dates, and under a variety of conditions. Two insurers shared defense and indemnity costs.
In 2013, Continental informed MVS that the three policies issued to MVS were nearly exhausted. Therefore, the parties disputed whether MVS' asbestos claims arose out of a single "occurrence" rather than multiple occurrences. The policies defined "occurrence" as "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."
Suit was filed and cross motions for summary judgment were filed to determine the number of "occurrences" caused by the claims against MVS. MVS argued that the asbestos claims arose from multiple occurrences. Each claimant was exposed to harmful asbestos fibers contained in the products distributed by MVS at various times and under multiple circumstances. Therefore, the $500,000 per occurrence limit in each of the three policies was not approaching exhaustion.
Continental cited cases in support of a single occurrence where an "occurrence" was alternately defined as an "accident" or "event" or "happening." But Continental's policy defined "occurrence" solely as an "accident." Continental's attempt to limit "occurrence" to the distribution of asbestos-containing products contradicted the plain language of the policies and would impermissibly ignore the term "accident" in the definition of "occurrence." Further, Continental's interpretation of the policy would imply terms (like "event" or "happening") in the definition of "occurrence" that were not there.
Continental further argued that the "cause test" should be applied. Under the cause test, the number of occurrences was determined by reference to the cause or causes of the damage or injury, rather than by the number of individual claims. Continental alleged that the sole cause of MVS' asbestos liability was the distribution of asbestos containing products. This was not logical, however, because there were multiple asbestos-containing products, and multiple distributions of the different products to numerous sites and a multitude of customers in varying states over a period of decades.
Therefore, the "per occurrence" limitations of the policies had not been exhausted. Partial summary judgment was granted in favor of MVS.
