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New England Reinsurance Corp. v. Ferguson Enterprises, Inc.

United States District Court, D. Connecticut

September 26, 2016

NEW ENGLAND REINSURANCE CORPORATION, Plaintiff,
v.
FERGUSON ENTERPRISES, INC. (successor-in-interest to P.E. O'Hair & Company Inc.); AMERICAN INSURANCE COMPANY; AVIVA CANADA INC. (successor-in-interest to Commercial Union Assurance of Canada); CENTRAL NATIONAL INSURANCE COMPANY OF OMAHA; EMPLOYERS INSURANCE COMPANY OF WAUSAU; FIREMAN'S FUND INSURANCE COMPANY; GREAT AMERICAN INSURANCE COMPANY; CONTINENTAL INSURANCE COMPANY (successor-in-interest to Harbor Insurance Company); INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA; NATIONAL AMERICAN INSURANCE COMPANY (successor-in-interest to American National Fire Insurance Company); NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA; PACIFIC INDEMNITY COMPANY; and ST. PAUL PROTECTIVE INSURANCE COMPANY (as successor-in-interest to Northbrook Property & Casualty Insurance Company), Defendants.

          RULING ON MOTIONS FOR PARTIAL SUMMARY JUDGMENT

          Warren W. Eginton Senior U.S. District Judge.

         In this declaratory judgment action, plaintiff New England Reinsurance seeks a declaration regarding the rights and obligations of the parties to this action pursuant to certain liability insurance policies issued to P.E. O'Hair & Company and its successor United Westerburne Inc. After an extensive settlement conference in June 2016, the parties have nearly settled this action. However, defendants Ferguson Enterprises, Inc. (as successor-in-interest to P.E. O'Hair & Company, Inc. (“O'Hair” or “Insured”)) and National Union Fire Insurance Company of Pittsburgh, PA, (“National Union”) now seek summary judgment relative to a policy for excess general liability issued to O'Hair by National Union. Specifically, the parties seek a determination of the interpretation of a certain policy provision. For the following reasons, the Court will find in favor of Ferguson's motion for summary judgment.[1]

         Background

         According to the parties' submissions, the following facts are not in dispute.

         O'Hair was a California-based corporation that sold or distributed plumbing supply products that contained asbestos.[2] O'Hair and its successors were named as defendants in numerous asbestos-related lawsuits that were filed largely in California.

         In 1978, O'Hair paid premiums to National Union to purchase excess general liability insurance to protect against catastrophic liabilities in the event that the defense and settlement of such liabilities exhaust the underlying primary and umbrella policies.

         Due to Ferguson's asbestos liabilities, two policies underlying the National Union policy are now asserted to be exhausted by defense and indemnity payments.[3]

         The National Union excess liability policy incorporates the terms and conditions of the underlying policies. Pursuant to the relevant insurance terms, National Union agreed, “subject to the limitations, terms and conditions herein mentioned, to indemnify the Insured for all sums which the Insured shall be obligated to pay by reason of the liability (a) imposed upon the Insured by law ...for damages on account of (i) Personal injuries ... caused by or arising out of each occurrence happening anywhere in the world during the policy period.” The policy provides coverage for up to $5 million for “Ultimate Net Loss, ” defined as the “total sum which the Insured, or his Underlying Insurers as scheduled, or both, become obligated to pay by reason of personal injuries ... and shall also include ... expenses for doctors, lawyers, nurses and investigators and other persons, and for litigation, settlement, adjustment and investigation of claims and suits which are paid as consequence of any occurrence cover hereunder...” Additionally, the policy states that National Union “shall not be liable for expenses as aforesaid when such expenses are included in other valid and collectible insurance.”[4]

         A clause entitled “PRIOR INSURANCE AND NON CUMULATION OF LIABILITY” (“The Clause”) states:

It is agreed that if any loss covered hereunder is also covered in whole or in part under any other excess policy issued to the Insured prior to the inception date hereof the limit of liability hereon ... shall be reduced by any amounts due to the Insured on account of such loss under such prior insurance.

         According to National Union, two excess insurance policies were issued by Federal Insurance Company and the Insurance Company of the State of Pennsylvania (“ICSOP”) prior to the inception date of the National Union policy.

         DISCUSSION

         A motion for summary judgment will be granted where there is no genuine issue as to any material fact and it is clear that the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). "Only when reasonable minds could not differ as to the import of the evidence is summary judgment proper." Bryant v. Maffucci, 923 F.2d 979, 982 (2d Cir.).

         The burden is on the moving party to demonstrate the absence of any material factual issue genuinely in dispute. American International Group, Inc. v. London American International Corp., 664 F.2d 348, 351 (2d Cir. 1981). In determining whether a genuine factual issue exists, the court must resolve all ambiguities and draw all reasonable ...


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