United States District Court, D. Connecticut
FIRST STATE INSURANCE COMPANY and NEW ENGLAND REINSURANCE CORPORATION, Plaintiffs,
v.
FERGUSON ENTERPRISES, INC., ET AL., Defendants.
RULING AND ORDER ON MOTIONS FOR SUMMARY
JUDGMENT
Victor
A. Bolden United States District Judge
On
November 4, 2016, First State Insurance Company filed a
Complaint seeking a declaratory judgment that various
insurance companies refused to pay their fair share of costs
under insurance policies held by Ferguson Enterprises, Inc.
(“Ferguson”), the successor of Familian
Corporation (“Familian”). Complaint, dated Nov.
4, 2016 (“Compl.”), ECF No. 1; see also
Amended Complaint, dated Jan. 11, 2017 (“Am.
Compl.”), ECF No. 55. On July 24, 2017, First State
Insurance Company filed a Second Amended Complaint, joining
an additional plaintiff, New England Reinsurance Corporation
(together, both entities are hereafter referred to as
“First State, ” following the language of the
Second Amended Complaint). Second Amended Complaint, dated
July 24, 2017 (“Second Am. Compl.”), ECF No. 147.
A
number of the parties have moved for summary judgment:
On
January 8, 2018, First State moved for partial summary
judgment on the number of aggregate limits provided by a
policy issued by Swiss Reinsurance America Corporation as
successor-in-interest to Forum Insurance Company
(“Swiss Re”). First State's Motion for
Summary Judgment on the Number of Aggregate Limits, dated
Jan. 8, 2018 (“First State Mot.”), ECF No. 161.
That same day, Ferguson also moved for partial summary
judgment on the Swiss Re policy's liability limits.
Ferguson's Motion for Partial Summary Judgment on the
Swiss Re Policy's Limits of Liability, dated Jan. 8, 2018
(“Ferguson Mot. on Swiss Re”), ECF No. 162.
On
March 1, 2018, Swiss Re moved for partial summary judgment on
the aggregate limits of its policy. Swiss Re's Motion for
Partial Summary Judgment, dated Mar. 1, 2018 (“Swiss Re
Mot.”), ECF No. 179.
On
April 30, 2018, American Home Assurance Company
(“American Home”) moved for partial summary
judgment and claimed that First State's claims are barred
by the statute of limitations. American Home's Motion for
Partial Summary Judgment (Statute of Limitations), dated Apr.
30, 2018 (“Am. Home Mot. on SOL”), ECF No. 191.
That same day, American Home also moved for partial summary
judgment on the aggregate limits under the policy it issued
to Familian. American Home's Motion for Partial Summary
Judgment (Aggregate Limits), dated Apr. 30, 2018 (“Am.
Home Mot. on Agg. Limits”), ECF No. 192.
On June
4, 2018, Columbia Casualty Company and The Continental
Insurance Company (together, “CNA”) moved for
partial summary judgment, arguing that certain claims against
them are barred by the statute of limitations, and for
partial joinder of American Home's motion for partial
summary judgment on the statute of limitations, to the extent
that it asks the Court to impose a limitations period on
First State's claims with respect to past settlements.
CNA's Motion for Partial Summary Judgment (Statute of
Limitations), dated June 4, 2018 (“CNA Mot.”),
ECF No. 197.
Also,
on June 4, 2018, Ferguson moved for partial summary judgment
on the limits of liability of American Home's policy.
Ferguson's Motion for Partial Summary Judgment on
American Home Policy's Limits of Liability, dated June 4,
2018 (“Ferguson Mot. on Am. Home”), ECF No. 204.
For the
following reasons, First State's motion for partial
summary judgment against Swiss Re, ECF No. 161, is
DENIED. Ferguson's motion for partial
summary judgment against Swiss Re, ECF No. 162, is
DENIED. Swiss Re's motion for summary
judgment on the aggregate limits of its policy, ECF No. 179,
is GRANTED.
American
Home's motion for summary judgment on aggregate limits,
ECF No. 192, is GRANTED. Ferguson's
motion for summary judgment against American Home, ECF No.
204, is DENIED.
American
Home's motion for summary judgment on the statute of
limitations, ECF No. 191, is GRANTED.
CNA's motion for summary judgment and partial joinder,
ECF No. 197, is GRANTED.
I.
FACTUAL AND PROCEDURAL BACKGROUND
A.
Factual Allegations
1.
The Relevant Insurance Policies
First
State alleges that, through a series of corporate
transactions, Ferguson is the successor in interest to
Familian. Second Am. Compl. ¶¶ 1-2. Familian
allegedly “is a pipe and supply distributor for the
plumbing and contractor industries, ” and from the
1950's until the 1970's “supplied certain
products that allegedly contained asbestos.”
Id. ¶ 40. Since at least 1997, Ferguson has
been named as a defendant in hundreds of lawsuits related to
“bodily injuries allegedly caused by products sold by
Familian that allegedly contained asbestos, in particular
vent and flue pipe.” Id. ¶¶ 42-43.
Ferguson claims entitlement to insurance coverage for the
underlying lawsuits under insurance policies issued by First
State and the Defendant Insurers. Id. ¶ 4.
Ferguson
allegedly “tendered the Underlying Lawsuits to its
primary insurers until approximately 2002, when its primary
insurers asserted that they no longer had any coverage
obligations to Ferguson or its predecessors for the
Underlying Lawsuits under their primary policies because
their primary policies had been exhausted.”
Id. ¶ 44.
On
October 11, 2002, Ferguson allegedly sought coverage from
First State. Id. ¶ 45. First State agreed to
contribute “subject to a full reservation of rights,
including the right to seek reimbursement or contribution
from Ferguson and any other insurer[.]” Id.
First State has allegedly “paid and continues to pay a
share of Ferguson's defense and indemnity costs incurred
in connection with the Underlying Lawsuits under the First
State Policies.” Id. ¶ 46.
First
State alleges that the Defendant Insurers or Doe Insurers
issued umbrella or excess liability insurance policies
“to Familian or its alleged predecessors or successors
that Ferguson alleges provide coverage to Ferguson for the
Underlying Lawsuits.” Id. ¶ 25. First
State alleges that the Defendant Insurers provided umbrella
or excess policies to Familian over the following time
periods:
• American Home, from March 5, 1974 to March 15, 1977,
id. ¶ 26;
• Central National Insurance Company of Omaha
(“Central National”), from March 5, 1979 to April
1, 1980, and from April 1, 1980 to April 1, 1981, id
¶ 27;
• Century Indemnity Company (“Century”),
from April 1, 1984 to December 18, 1984, id. ¶
28;
• Columbia Casualty Company (“Columbia”),
from March 15, 1978 to March 15, 1979, id.¶ 29;
• Federal Insurance Company (“Federal”),
from April 1, 1981 to April 1, 1982, id ¶ 30;
• Fireman's Fund Insurance Company
(“Fireman's Fund”), from April 1, 1982 to
April 1, 1983, and from April 1, 1983 to April 1, 1984,
id. ¶ 31;
• Swiss Re, from December 18, 1984 to April 1, 1986,
id. ¶ 32;
• Granite State Insurance Company, from April 1, 1985 to
April 1, 1986, id. ¶ 33;
• Harbor Insurance Company, from March 15, 1978 to March
15, 1979, id ¶ 34; and
• Insurance Company of the State of Pennsylvania, from
March 15, 1977 to March 15, 1978, id. ¶ 35.
First
State alleged that Doe Insurers also “may have issued
policies to Familian that may provide coverage for the
Underlying Lawsuits, ” and stated that “[w]hen
the true names and capacities of the Doe Insurers have been
ascertained, First State will seek to amend this Amended
Complaint to include such true names and capacities.”
Id. ¶ 36.
First
State alleges that First State Insurance Company issued
“the following umbrella and/or excess policies to
Familian that Ferguson alleges provide coverage to Ferguson
for the Underlying Lawsuits: Policy No. 924478 (Policy Period
March 23, 1977 to March 15, 1978), Policy No. 909537 (Policy
Period March 15, 1978 to March 15, 1979), Policy No. 951240
(Policy Period April 1, 1982 to April 1, 1983), Policy No.
953803 (Policy Period April 1, 1983 to April 1, 1984), Policy
No. 955231 (Policy Period April 1, 1984 to December 18,
1984), and Policy No. EU 002664 (Policy Period April 1, 1985
to April 1, 1986).” Id. ¶ 37. First State
further alleges that New England Reinsurance Corporation
issued the following umbrella or excess policies to Familian
that Ferguson alleges provides coverage: Policy No. 686792
(Policy Period April 1, 1981 to April 1, 1982). Id.
¶ 38.
Since
at least 2003, First State alleges that, “First State
and certain of the Defendant Insurers have been participating
in the defense and indemnification of Ferguson in connection
with the Underlying Lawsuits, ” but “certain of
the participating Defendant Insurers have refused to pay
their fair share of past costs in connection with the
Underlying Lawsuits, ” or have refused to participate
in defending or indemnifying Ferguson at all. Id.
¶ 5.
First
State alleges that “American Home, [Insurance Company
of the State of Pennsylvania], Central National, and Swiss Re
also have participated in the defense and settlement of the
Underlying Lawsuits under some or all of their respective
policies, but on information and belief have paid less than
their respective allocable shares.” Id. ¶
47. American Home allegedly “participated in the
defense and indemnification of Familian under a cost-share
percentage that it negotiated with the participating insurers
on the basis that it had provided coverage to Familian under
a policy in effect from March 5, 1976 through March 15, 1977,
” but First State alleges that the American Home policy
“was actually in effect from March 5, 1974 through
March 15, 1977.” Id. ¶ 48. First State
alleges that it “paid more than its appropriate share
of defense and indemnity costs and the other participating
insurers paid less than their appropriate shares.”
Id. ¶ 50.
First
State also alleges that it “is currently paying more
than its appropriate share of defense and indemnity costs
because, on information and belief, Columbia issued an excess
insurance policy to Familian but Columbia has refused to
participate in the defense and/or indemnification of Ferguson
in connection with the Underlying Lawsuits, even though the
primary and umbrella policies underlying its policy are
exhausted.” Id. ¶ 51.
B.
Procedural History
On
November 4, 2016, First State Insurance Company filed a
Complaint for Declaratory Judgment against ACE Property &
Casualty Insurance Company, American Home Assurance Company,
Columbia Casualty Company, Continental Insurance Company
(successor-in-interest to Harbor Insurance Company), Federal
Insurance Company, Fireman's Fund Insurance Company,
Granite State Insurance Company, Insurance Company of the
State of Pennsylvania, Swiss Reinsurance America Company
(successor-in-interest to Forum Insurance Company) (together,
“Defendant Insurers”), and Ferguson Enterprises,
Inc. See Compl.
On
January 11, 2017, First State Insurance Company filed an
Amended Complaint for Declaratory Relief against American
Home Assurance Company, Central National Insurance Company of
Omaha, but only as to policies issued by Cravens, Dargan
& Company, Pacific Coast, and its subsidiaries, Century
Indemnity Company, formerly known as CCI Insurance Company,
formerly known as Insurance Company of North America,
Columbia Casualty Company, The Continental Insurance Company
(successor-in-interest to Harbor Insurance Company), Federal
Insurance Company, Fireman's Fund Insurance Company,
Granite State Insurance Company, Insurance Company of the
State of Pennsylvania, Swiss Reinsurance America Company
(successor-in-interest to Forum Insurance Company) (together,
“Defendant Insurers”), and Ferguson Enterprises,
Inc. See Am. Compl.
On July
24, 2017, First State and New England Reinsurance Corporation
(together, “First State”) filed a Second Amended
Complaint on consent against American Home Assurance Company,
Central National Insurance Company of Omaha, but only as to
policies issued by Cravens, Dargan & Company, Pacific
Coast, and its subsidiaries, Century Indemnity Company,
formerly known as CCI Insurance Company, formerly known as
Insurance Company of North America, Columbia Casualty
Company, The Continental Insurance Company
(successor-in-interest to Harbor Insurance Company), Federal
Insurance Company, Firemen's Fund insurance Company,
Granite State Insurance Company, Insurance Company of the
State of Pennsylvania, Swiss Reinsurance America Company
(successor-in-interest to Forum Insurance Company) (together,
“Defendant Insurers”), and Ferguson Enterprises,
Inc. See Second Am. Compl.
The
Second Amended Complaint asserts six claims for relief: (1)
declaration of coverage of whether and to what extent the
Defendant Insurers “are obligated under their
respective policies to defend Ferguson or to reimburse it for
defense costs incurred in connection with the Underlying
Lawsuits”; (2) declaration of coverage of whether and
to what extent the Defendant Insurers are obligated to
indemnify Ferguson or reimburse it for indemnity costs
incurred in connection with the Underlying Lawsuits; (3)
declaration of the Defendant Insurers' “respective
allocable shares, if any, of the past and/or future defense
costs incurred in the Underlying Lawsuits”; (4)
declaration of the Defendant Insurers' “respective
allocable shares, if any, of the past and/or future indemnity
costs incurred in the Underlying Lawsuits”; (5) if
First State is found to have paid more than its share of the
defense or indemnity costs, declaration that First State is
entitled to reimbursement for the appropriate share of their
defense and indemnity payments; and (6) declaration that
First State is “equitably subrogated to Ferguson's
rights against certain of the defendant insurers and/or the
Doe Insurers to recover the above-described defense and
indemnity amounts owed by certain Defendant Insurers and/or
Doe Insurers.” Second Am. Compl. ¶¶ 52-71.
On
January 8, 2018, First State moved for partial summary
judgment on the number of aggregate limits provided by a
policy issued by Swiss Re, based on umbrella or excess
policies issued to Familian covering the period between
December 18, 1984 and April 1, 1986 (“Swiss Re Umbrella
Policy”). First State Mot. That same day, Ferguson
moved for partial summary judgment on the number of aggregate
limits in Swiss Re's insurance policy. Ferguson Mot. on
Swiss Re. Both First State and Ferguson argue that the Court
should construe the 15.5-month policy as containing two
aggregate limits of $5 million each, resulting in total
liability for Swiss Re of $10 million. See
Memorandum of Law in Support of First State Mot., dated Jan.
8, 2018 (“First State Mem.”), annexed to First
State Mot., ECF No. 161-1; Memorandum of Law in Support of
Ferguson Mot. on Swiss Re., dated Jan. 8, 2018
(“Ferguson Mem. on Swiss Re”), annexed to
Ferguson Mot. on Swiss Re., ECF No. 162-7.
On
March 1, 2018, Swiss Re filed a motion for partial summary
judgment on the aggregate limits in its insurance policy,
arguing that the policy “has a single $5 million
aggregate limit, and there is no dispute that [Swiss Re] has
paid the full $5 million to or on behalf of Familian.”
Memorandum of Law in Support of Swiss Re Mot., dated Jan. 8,
2018 (“Swiss Re Mem.”), annexed to Swiss Re Mot.,
ECF No. 179-1, at 1.
On
April 30, 2018, American Home Assurance Company
(“American Home”) moved for partial summary
judgment, arguing that First State's claims are barred by
the statute of limitations. Memorandum of Law in Support of
Am. Home Mot. on SOL, dated Apr. 30, 2018 (“Am. Home
Mem. on SOL”), annexed to Am. Home Mot. on SOL, ECF No.
191-1. That same day, American Home also moved for partial
summary judgment on separate grounds, arguing that the
aggregate limits under the policy it issued to Familian
remained $30 million despite a brief ten-day extension of
that policy. Memorandum of Law in Support of American Home
Mot. on Agg. Limits, dated Apr. 30, 2018 (“Am. Home
Mem. on Agg. Limits”), annexed to Am. Home Mot. on Agg.
Limits, ECF No. 192-1.
On June
4, 2018, Columbia Casualty Company and The Continental
Insurance Company (together, “CNA”) moved for
partial summary judgment on the application of the statute of
limitations, arguing that a significant portion of First
State's claims against CNA are barred by the statute of
limitations. Memorandum of Law in Support of CNA Mot., dated
June 4, 2018 (“CNA Mem.”), ECF No. 197-1, at 2.
Also on
June 4, 2018, Ferguson moved for partial summary judgment on
the limits of liability of American Home's policy,
arguing that American Home's policy has a total of $40
million in aggregate limits over four annual periods.
Memorandum of Law in Support of Ferguson Mot. on American
...