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Nooter Corporation v. Allianz Underwriters Ins. Co.

Court of Appeals of Missouri, Eastern District, Second Division

October 3, 2017

NOOTER CORPORATION, Respondent/Cross-Appellant,
v.
ALLIANZ UNDERWRITERS INS. CO., APPALACHIAN INS. CO., EVANSTON INS. CO., NATIONAL UNION FIRE INS. CO. OF PITTSBURG, PA., NORTH STAR REINSURANCE CORP., ONEBEACON AMERICA INS. CO. Appellants, and CERTAIN UNDERWRITERS LLOYD'S LONDON & LONDON MARKET INS., MUNICH REINSURANCE AMERICA, INC., Appellants/Cross-Respondents, and CONTINENTAL CASUALTY CO. Respondent.

         Appeal from the Circuit Court of the City of St. Louis Cause No. 1022-CC01145-01 Honorable Steven R. Ohmer

          OPINION

          COLLEEN DOLAN, JUDGE

         The appeal before us involves a dispute between Nooter Corporation ("Nooter") and eight different excess insurance companies: Evanston Insurance Company ("Evanston"), National Union Fire Insurance Company of Pittsburgh, PA ("National Union"), Allianz Underwriters Insurance Company ("Allianz"), Certain Underwriters at Lloyd's, London and Certain London Market Insurance companies ("London"), Appalachian Insurance Company ("Appalachian"), Munich Reinsurance America, Inc. ("Munich"), North Star Reinsurance Company ("North Star"), and OneBeacon America Insurance Company ("OneBeacon").[1]Collectively, we will refer to all eight appellants as "Excess Insurers." Aside from London and National Union, which have submitted a brief together, each appellant has submitted its own brief, resulting in seven appellant and reply briefs. Additionally, Nooter has filed a cross-appellant's brief, as well as a reply brief.

         Nooter has been in the business of designing, installing, and distributing pressure vessels for refineries and chemical plants for over 100 years. Some of Nooter's sites allegedly contained asbestos. Consequently, claimants began filing lawsuits against Nooter for asbestos-related bodily injuries in the late 1990's. In turn, Nooter began seeking help to defend and/or reimburse Nooter for expenses related to these suits pursuant to various insurance policies. This sparked several disagreements between Nooter and Excess Insurers, eventually resulting in litigation. This appeal primarily involves the trial court's rulings on motions for summary judgment and declaratory judgment actions that concern the Excess Insurers' rights and obligations to indemnify and/or defend Nooter in asbestos lawsuits. Additionally, Evanston appeals the adverse judgments against it based on Nooter's claims of breach of contract and vexatious refusal to pay, for which a jury trial was conducted. We affirm in part and reverse in part. Additionally, we grant, in part, Nooter's motion on appeal for reasonable attorney's fees, but we remand the case to the trial court to hold a hearing and determine the reasonableness of the attorney's fees requested and to enter judgment accordingly.

         I. BACKGROUND

         A. Factual Background

         This appeal concerns numerous insurance policies providing coverage for Nooter from 1949 through 1985. Although only "excess" insurance policies are directly at issue on appeal, we must also examine several "primary" general liability insurance policies that were active during the period. The primary policies serve as the first layer of insurance protection for Nooter. Additionally, some of the excess insurance policies are "second-level" excess policies, which can only attach after the applicable primary policies and "first-level" excess policies have been exhausted. Accordingly, the hierarchy amongst the three policies types is (1) primary policies, (2) first-level excess policies, and (3) second-level excess policies.

         After claimants began filing asbestos suits against Nooter, Nooter claims it first sought funds from its primary insurance policies, and then, "[a]s individual primary policies were becoming exhausted by the payment of asbestos claims, " it sought coverage from Excess Insurers. In sum, more than 20, 000 individuals have brought lawsuits against Nooter for bodily injuries resulting from exposure to asbestos. Although the suits involve similar allegations (i.e., personal injury caused by exposure to asbestos at Nooter sites), each claim involves different exposures based on each claimant's work history and/or unique circumstances that allegedly exposed the claimants to asbestos.

         Further complicating matters, most of the suits are "long-tail" claims. Long-tail claims involve allegations of continuous or escalating damages over a range of time, sometimes spanning several years, or even decades; this is often the case for asbestos claims. Unlike most tort actions, where the causal event and resulting injury occur almost instantaneously (e.g., an automobile accident), identifying the timing of the causal event(s) is often difficult or impossible in long-tail claims. For example, it takes years between the affected individual's initial inhalation of asbestos and the manifestation of symptoms.[2] Moreover, the injury is cumulative-many separate exposures contribute to the affliction. Consequently, it can be difficult to identify which policies cover the periods of asbestos exposure that form the basis of a particular lawsuit.[3] Such is the case in the appeal before us.

         B. Procedural Background

         Due to the number of parties (8) and points on appeal or cross-appeal (29), we will adduce additional facts as necessary under the relevant portions on appeal.[4] Nooter initiated the lawsuit against Excess Insurers on March 10, 2010, and filed its First Amended Petition (the "Petition") on January 31, 2013, asserting claims for Vexatious Refusal to Pay (pursuant to §§ 375.420 & 375.296), [5] Breach of Contract, and Declaratory Judgment (pursuant to the Missouri Declaratory Judgment Act, § 527.010 et al.).[6], [7], [8]

         Before the trial, Nooter agreed to dismiss its breach-of-contract claims against Appalachian, Allianz, Munich, North Star, and OneBeacon without prejudice. On April 28, 2014, Nooter proceeded to trial against three of the Excess Insurers (Evanston, London, and National Union), where only six counts were left for the jury to resolve-claims against all three defendants for both breach of contract and vexatious refusal to pay. On May 9, the jury returned verdicts in favor of National Union and London on both counts, however, it returned verdicts against Evanston on both counts.

         On April 2, 2015, the trial court issued an order and judgment based on the "Motions for Summary Judgment that declared certain rights to the parties, " the jury verdicts, and "Motions for Declaratory Judgment."[9] Finally, on September 16, 2015, the trial court entered its final order and judgment in accordance with (1) the May 9, 2014 jury verdicts and (2) the April 2, 2015 order and judgment.

         In addition to the Excess Insurers' points on appeal, Nooter has raised three points on cross-appeal. All three points concern the trial court's entry of summary judgment in favor of London regarding its defense cost obligations under its 1949-1961 policies. Accordingly, London is the only cross-respondent on appeal.[10]

         C. Relevant Insurance Companies and Policies

         All of the relevant policies' terms and conditions are necessary to resolve multiple points on appeal. This section is meant to provide a background on the relevant companies and policies.

         i. Primary Insurance Companies

         There are five "primary" insurance companies relevant to this appeal: Continental Insurance Company ("Continental"), Transamerica Insurance Company ("TIG"), Aetna/Travelers Casualty and Surety Company ("Aetna"), Insurance Company of North America ("INA"), and Home Indemnity Company ("Home"). Relevant information about the primary insurers and their policies will be provided as needed.

         ii. Excess Insurance Policies

         Eight different excess insurers are parties to this appeal:

         Evanston

         Evanston issued "four consecutive commercial umbrella liability policies" to Nooter from June 1981 until June 1985. These four policies are broken down further into two subtypes:

UM Policies: The first two annual policies were issued on July 1, 1981 (Policy No. "UM 199286") and July 1, 1982 (Policy No. "UM 100296") (collectively herein, the "Evanston UM Policies").
CN Policies: The last two Evanston policies were issued on July 1, 1983 (Policy No. "CN 503824) and July 1, 1984 (Policy No. "CN 504032") (collectively herein, the "Evanston CN Policies").

         The Evanston CN Policies contain two separate levels of coverage: (1) Coverage A ("occurrence-based" coverage) and (2) Coverage B ("claims-made" coverage). Nooter and Evanston dispute which type of coverage applies to asbestos claims under the Evanston CN Policies. After reviewing the language of the Evanston CN policies and the relevant endorsement, we have determined any relevant asbestos claims would fall under Coverage A. For further discussion, see infra Sec. III(G).

         National Union

         National Union issued a one-year "umbrella liability policy" to Nooter with effective dates from July 1, 1980, to July 1, 1981 (Policy No. "BE 1331118")[11] (the "National Union Policy"). Because London and National Union have jointly filed a brief, any reference to London's arguments in support of its Point I or Point II will also reflect National Union's position unless otherwise stated.

         London

         London and Nooter grouped the relevant policies before us on appeal into two separate groups.

         London Policies from September 13, 1949 to May 17, 1961

         London and Nooter entered into numerous policy agreements during this span. As relevant to this appeal, Nooter purchased annual excess policies from London from September 13, 1949 to May 17, 1961.[12] London's annual excess policies from this period included the same relevant language.

         London Policies from May 17, 1961 to July 1, 1965 and July 1, 1975 to July 1, 1980

         During "various periods from May 17, 1961 to July 1, 1965, and from July 1, 1975 to July 1, 1980, " London provided Nooter with umbrella coverage through numerous policies with identical relevant language.

         Appalachian

         Nooter purchased only one relevant insurance policy from Appalachian, which covered three years (July 1, 1972 through July 1, 1975)-Policy No. 71174 (the "Appalachian Policy").

         Allianz

         Allianz issued only one policy to Nooter (Policy No. AUX5201679). This policy (the "Allianz Policy") began on July 1, 1983, and ran until July 1, 1985.[13] The Allianz Policy is a "second-level" excess insurance policy, attaching to Evanston's two annual CN policies (first-level excess policies), which covered the same policy period. The Allianz Policy also contains "broad as primary" language under its MAINTENANCE OF UNDERLYING UMBRELLA INSURANCE provision, which states the Allianz Policy "is subject to the same terms, definitions, exclusions and conditions [of Evanston Umbrella Policy No. CN 503824] (except as regards [to] the premium, the amount and limits of liability and except as otherwise provided [in the Allianz Policy])."

         Munich

         Munich issued two separate three-year policies to Nooter: (1) Policy No. M 7811 0001, which covered July 1, 1965 through July 1, 1968; and (2) Policy No. M 0085094, which covered July 1, 1968 through July 1, 1971. Only the 1968-1971 policy is at issue on appeal ("the Munich Policy").

         North Star

         Nooter and North Star entered into a three-year policy agreement (Policy No. NSX-9590) beginning on July 1, 1971, and terminating on July 1, 1974 (the "North Star Policy").

         OneBeacon

         OneBeacon issued one excess umbrella policy (No. EW-8500-566), which was effective from July 1, 1971 until December 31, 1973 (the "OneBeacon Policy"). However, the OneBeacon Policy's terms were changed after the first year of coverage; accordingly, the OneBeacon Policy has two periods with different terms and conditions.

         The OneBeacon Policy's Terms and Conditions from July 1, 1971 through June 30, 1972

         The OneBeacon Policy was primarily subject to the same terms and conditions as an Aetna policy (No. 51 XS 570 SCA) (the "Aetna Policy"). The terms and conditions were substantially similar because the OneBeacon Policy included a "broad as primary" endorsement. This endorsement expanded the scope of the OneBeacon policy to incorporate most of the coverage provided by the Aetna policy, which was broader than the OneBeacon Policy would otherwise provide.

         The OneBeacon Policy's Terms and Conditions from July 1, 1972 through December 31, 1973

         The OneBeacon Policy was primarily subject to the same terms and conditions contained in Appalachian Policy No. 71174 (the "Appalachian Policy").

         II. STANDARDS OF REVIEW

         The majority of the issues before us are based on petitions for declaratory judgment and motions for summary judgment. The heart of these rulings concerned issues of insurance policy interpretation. Additionally, Evanston has presented several independent issues concerning the trial and the jury verdicts.

         A. Standard of Review for Interpretation of Insurance Policies

         The proper interpretation of an insurance policy is a question of law that appellate courts review de novo; this includes determinations of whether provisions are "ambiguous." Owners Ins. Co. v. Craig, 514 S.W.3d 614, 616-18 (Mo. banc. 2017); Taylor v. Bar Plan Mut. Ins. Co., 457 S.W.3d 340, 344 (Mo. banc 2015). "[T]he trial court receives no deference where resolution of the controversy is a question of law." State Farm Mut. Auto. Ins. Co. v. Stockley, 168 S.W.3d 598, 600 (Mo. App. E.D. 2005). Further, where there are no factual issues left to resolve, any application of facts to the insurance policies is also a matter of law. Id.

         B. Standard of Review for Declaratory Judgments

Generally, we review court-tried cases under the standards set forth in Murphy v. Carron and will affirm the judgment unless it is against the weight of the evidence, it is not supported by substantial evidence, or it erroneously declares or applies the law. 536 S.W.2d 30 (Mo. banc 1976). In a court-tried declaratory judgment action, however, interpretation of an insurance policy is a question of law, and the trial court receives no deference where resolution of the controversy is a question of law. Only if an ambiguity within the policy necessitates a factual determination will the standards set forth in Murphy govern.

Id. (citing Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976)).

         C. Standard of Review for Summary Judgment

         "A trial court's decision to grant summary judgment is an issue of law, which this Court reviews de novo; we will affirm such a decision if it is proper under any legal theory supported by the record." Fruendly Auto Source, Inc. v. Chrostowski, 514 S.W.3d 646, 650 (Mo. App. E.D. 2017) (citing Burns v. Smith, 303 S.W.3d 505, 509 (Mo. banc 2010)). Summary judgment is only appropriate when the moving party has established (1) there is no genuine dispute of material fact, and (2) it is entitled to judgment as a matter of law. Binkley v. Am. Equity Mortg., Inc., 447 S.W.3d 194, 196 (Mo. banc 2014); Rule 74.04(c). The trial court's grant of summary judgment is reviewed in the light most favorable to the party against whom summary judgment was entered. Id.

         III. DISCUSSION

         A. Opinion Roadmap

         There is great overlap amongst many of the issues before us, most of which center around questions of insurance policy interpretation. Certain Excess Insurers have asked our Court to determine (1) when a policy or policies underlying Excess Insurers' policies become "exhausted"; (2) the appropriate method(s) for allocating losses among Excess Insurers; (3) the extent of certain Excess Insurers' obligations to defend and/or indemnify Nooter; (4) how payment of defense costs impacts certain Excess Insurers' policies' limits; (5) whether Evanston's CN Policies require coverage on an "occurrence-basis" or a "claims-made basis"; (6) Munich's policy limits; (7) whether Evanston's CN Policies were excess over INA policies for certain claims; and (8) whether the trial court erred in making certain rulings during Evanston's trial. We will address these issues in that order.

         B. General Rules and Principles of Insurance Policy Interpretation

         Issues of insurance policy interpretation are at the center of nearly every point on appeal. Thus, before delving into the specific points on appeal, we will discuss several rules and principles guiding our interpretation of the insurance policies.

         "In interpreting an insurance contract, we must keep in mind that insurance policies are contracts; thus, the rules of contract construction apply." Doe Run Res. Corp. v. Certain Underwriters at Lloyd's London, 400 S.W.3d 463, 474 (Mo. App. E.D. 2013). The cardinal rule of contract interpretation "is that courts seek to determine the parties' intent and give effect to it." Chochorowski v. Home Depot U.S.A., 404 S.W.3d 220, 226 (Mo. banc 2013). When a contract is unambiguous on its face, we ascertain the intent of the parties based on the contract language alone. Id. at 226-27. Thus, we will only resort to canons of construction if the policy language is ambiguous. Id. at 227. However, clear and unambiguous language will be enforced as written. Taylor, 457 S.W.3d at 344. Accordingly, determining whether a policy is "ambiguous" is paramount. Maritz Holdings, Inc. v. Fed. Ins. Co., 298 S.W.3d 92, 99 (Mo. App. E.D. 2009).

         "It is black-letter law that: An ambiguity exists when there is duplicity, indistinctness, or uncertainty in the meaning of the language in the policy. Language is ambiguous if it is reasonably open to different constructions." Burns, 303 S.W.3d at 509. We assess whether an insurance policy is ambiguous by reading the agreement as a whole. Owners Ins. Co., 514 S.W.3d at 617. We do not view provisions in isolation. Id. Unless a word or phrase is clearly intended to be used as a term of art, we assign a plain and ordinary meaning to the policy's words in a manner consistent with the parties' reasonable expectations and objectives. Doe Run, 400 S.W.3d at 474. Additionally, we aim to give a reasonable meaning to every provision and to avoid an interpretation that renders some provisions trivial or superfluous. Id.

         C. Allocation (Allianz Point VI, OneBeacon Point I, London Point I, Evanston Point III, and North Star Point III)

         i. Introduction to the Issue of Allocation

         Effectively, "allocation" determines how losses are divided amongst the insured and its insurers. As is the case with exhaustion, the issue of allocation is more complex in long-tail claims:

Traditional claims are limited in time, place, and space. In the context of long-tail claims (e.g., pollution, mass product, or toxic tort exposures), however, damage or injury may take place over time, and often there is a latency period between the date on which the polluting activity or injurious process begins and the date on which the resulting bodily injury or property damage is discovered. In other words, long-tail claims may span several years or even decades. In some instances, the damage is progressive. In others, it is merely continuous.

         Scott M. Seaman & Jason R. Schulze., Allocation of Losses in Complex Insurance Coverage Claims § 2:2 (2016). Accordingly, "the courts are left with the nettlesome problem of how to allocate damages among the policies, " a problem to which there is no universal approach. Boston Gas Co. v. Century Indem. Co., 910 N.E.2d 290, 301, 454 Mass. 337, 351, (2009) (quoting 15 Couch on Ins. § 220:25 (3d ed. 2005)). However, two leading methods of allocation have emerged to address this issue: the "all sums" approach and the "pro-rata" approach.[14] In re Viking Pump, Inc., 52 N.E.3d 1144, 1150, 27 N.Y.3d 244, 256-57 (2016).

         The "all sums" approach allows the policyholder to select a policy among the range of years triggered by the "occurrence" at issue. Conversely, "[u]nder the pro rata approach, damages are spread proportionately across the entire period during which the property damage takes place." Doe Run, 400 S.W.3d at 474. Under the "all sums" approach, the insurer may be able to recoup some or all of these funds from other insurers. OneBeacon Am. Ins. Co. v. Am. Motorists Ins. Co., 679 F.3d 456, 460 (6th Cir. 2012) (explaining that the "all sums" approach allows the targeted insurer to "seek contribution from the other insurers for any amounts for which they are potentially responsible").[15] Accordingly, "[t]his method places the onus on the targeted insurer, rather than on the policyholder." Id.

         Courts often determine the proper approach based on policy language, but some courts weigh other considerations more heavily, such as public policy concerns. See In re Viking Pump, Inc., 52 N.E.3d at 1150. Consistent with Missouri's long-standing principles for contract and insurance policy interpretation, our analysis will focus on the language of the Excess Insurers' policies.[16]

         In sum, six of the Excess Insurers have appealed the trial court's grant of Nooter's motion for summary judgment regarding allocation, holding that an "all sums" allocation method applies to relevant asbestos claims under all of the policies addressed in this section (Sec. III(C)).[17]

         ii. Allocation Analysis

         Although the relevant policies have different variations, the arguments, as Evanston noted, are "substantially similar." Moreover, as several of these appellants have chosen to adopt and incorporate by reference some of the other appellants' allocation arguments, these arguments are intricately intertwined. The arguments advanced under London's Point I have been adopted by OneBeacon, Evanston, North Star, and Allianz. Unless specifically stated otherwise, any reference to London's allocation argument will subsume arguments made by the other four appellants.[18], [19]

         We must view contracts as a whole; we will not consider contract language in isolation. Owners Ins. Co., 514 S.W.3d at 617. That being said, two categories of language play the most prominent roles in addressing the allocation issue. All of the relevant policies have (1) some type of "all sums" language ("all sums, " "the sum, " "the sums, " or "the total sum") and (2) language limiting losses or occurrences to a particular policy period ("during the [policy] period, " "while this policy is in force, " "occurring during the policy period, " "coming within the terms and limits of this [policy], " etc.).[20] As aforementioned, even when interpreting insurance policies with great similarity, courts have reached different results on the issue of allocation. For example, some jurisdictions have concluded an "all sums" method applies "usually [by] relying on language in policies obligating an insurer to pay 'all sums' for which an insured becomes liable." In re Viking Pump, Inc., 52 N.E.3d at 1150. When courts rely on policy language to determine that a pro-rata allocation scheme should apply, they often do so by emphasizing language limiting losses to a particular policy period. Id. (explaining some jurisdictions have "utilized the pro rata method, emphasizing language in the insurance policies that may be interpreted as limiting the 'all sums' owed to those resulting from an occurrence 'during the policy period'").

         In Missouri's most instructive case on this issue (Doe Run, 400 S.W.3d at 474), our Court found the "all sums" language was not limited by the "during the policy" language. In that case, the "pertinent part" of a policy at issue read:

Underwriters hereby agree, subject to the limitations, terms and conditions hereinafter sanctioned, to indemnify the insured for all sums which the Assured shall be obliged to pay by reason of the liability…for damages…caused by or arising out of each occurrence happening during the policy period."

Id. at 475 (emphasis in the original). In that policy, an "occurrence" was defined as "one happening or series of happenings, arising out of, or due to one event taking place during the term of this policy." Id. Our Court determined "[t]his definition does not limit the policies' promise to pay all sums of the policy holder's liability solely to damage during the policy period, " therefore, we found "the express language of the applicable insurance policies requires the adoption of the all sums allocation scheme[.]" Id. (emphasis added).

         London attempts to distinguish Doe Run by advancing several similar arguments. For example, in the instance of the National Union Policy, London maintains that the policy provides "exactly what was deemed missing in [Doe Run]" by limiting occurrences to events "which result in Personal Injury or Property Damage during the policy period…" (emphasis added). However, we find this to be a distinction without a difference. The policy discussed in Doe Run also limits coverage to occurrences "during the policy period." Id. (emphasis added). The policies at issue here operate in a very similar manner to the language analyzed in Doe Run. See id. Moreover, after reading all of the language in the policies, we have found nothing elsewhere to affect the provisions which use permutations of "all sums" and "during the policy limit" language. In the context of the policies before us in this section (Sec. III(C)), we find the two categories of language-permutations of (1) "all sums" language and (2) "during the policy period" language-to operate in a substantially similar manner. Accordingly, we affirm the trial court's grant of summary judgment in favor of Nooter regarding allocation, and we deny Allianz Point VI, OneBeacon Point I, London Point I, Evanston Point III, and North Star Point III.

         D. Method of Exhaustion (Points on Appeal: London Point II, OneBeacon Point II, Evanston Point I, North Star Point IV)

         i. Introduction to the Exhaustion Issue

         Certain Excess Insurers appeal the trial court's grant of "Summary Judgment Regarding Exhaustion." Defining what constitutes "exhaustion" is necessary for assessing the Excess Insurers' obligations and potential liability; typically, exhaustion is a condition precedent to triggering an excess insurer's duties.[21] In this case, it is undisputed that exhaustion of the Excess Insurers' underlying policies is required. The definition of exhaustion as it pertains to certain policies is the sticking point. First, we look to the policy language to define when underlying insurance policies are "exhausted." See Schmitz v. Great Am. Assur. Co., 337 S.W.3d 700, 706 (Mo. banc 2011) ("It has been long recognized that parties to an insurance contract are free to define when an underlying insurance policy is exhausted so that the excess carrier's obligation to pay is triggered."). The definition of exhaustion is not precisely defined in any of the Excess Insurers' policies. This is a common problem that courts have been grappling with nationwide.[22] See Mayor & City Council of Baltimore v. Utica Mut. Ins. Co., 145 Md.App. 256, 314-15 (Md. 2002).

         Two primary methods of exhaustion have been used by courts: horizontal exhaustion and vertical exhaustion. Id. It is important to understand where these two approaches differ. Vertical exhaustion is a principle of insurance priority that allows the attachment of an excess policy once all of the policies immediately below it (as identified in the policy agreement) have been exhausted. Horizontal exhaustion requires every triggered lower-level policy to become exhausted before implicating an excess policy.

         We will use the Allianz Policy as an example. This is a two-year policy covering July 1, 1983 through July 1, 1985. Allianz is a second-level excess insurer, with Evanston's CN policies (first-level excess policies) directly underlying the Allianz Policy.

         If a claimant alleging injury from asbestos inhalation worked for Nooter from January 1, 1970 through December 31, 1985, Nooter would need to exhaust any and all primary and first-level excess insurance policies triggered during that sixteen-year span before any of Allianz's obligations were triggered under horizontal exhaustion. This means Nooter must exhaust policies covering periods in which the Allianz Policy was not in effect. For example, Nooter would be required to exhaust every Home policy (which covered Nooter from July 1, 1972 through July 1, 1985), the Appalachian Policy (which covered Nooter from July 1, 1972 through July 1, 1975), and most of the other policies discussed in this opinion before Allianz would owe any obligations to Nooter. On the other hand, vertical exhaustion only requires exhaustion of policies limits that directly underlie the Allianz Policy, in this case Evanston's CN policies and any of their underlying primary policies. Thus, exhaustion of the Appalachian Policy and any Home Policy providing coverage before July 1, 1983, is immaterial if vertical exhaustion applies.

         ii. Nooter's Judicial Admission Argument

         First, we will address Nooter's argument that the trial court did not err in applying vertical exhaustion to the policies of Evanston, National Union, and London because these excess insurers "withdrew their 'reservations of rights" and judicially admitted their obligations…that [they] would indemnify Nooter without reservation." If Nooter is correct in its assertion, there is no need to address the language of the relevant policies.

         Nooter asserts that the judicial admissions of Evanston, National Union, and London bind them on the issue of exhaustion. Nooter contends that these three Excess Insurers told the jury Nooter had properly exhausted the primary coverage under their policies. Nooter directs us to portions of the transcript that support the opposite conclusion. The transcript primarily concerned the trial court's "all sums" ruling, but it also provides strong support that the three appellants did not "admit" the relevant policies were exhausted. For example, Evanston's counsel states: "There's no testimony about the '81-'82 policies, the UM policies. I'll just talk about them. No testimony about them. No evidence of exhaustion, " Evanston's counsel made a similar statement about the 1983-1984 CN policy ("no testimony about it, no evidence of exhaustion."). Additionally, Evanston's counsel contested the 1984-1985 policy: "the simple fact is in this case Home kept paying money under that policy. The policy wasn't exhausted..." (emphasis added).

         Nooter also uses a quote from London's opening statement to advance their argument: "Give us the bill, give us the specific amount and the information and we'll pay for it." However, London prefaced the statement by saying this would be done "[w]hen the primary is gone and when the policyholder gives the insurance company the information." London emphasized that exhaustion must first occur ("the money has to be gone"). When the quote is read in context, it is apparent that London did not make the representation Nooter argues it made. The references by the three Excess Insurers to payments that they paid or will pay to Nooter was predicated on the parties' acknowledgement of various trial court rulings. These alleged "admissions" were effectively reiterations of issues previously determined by the trial court. We do not find Nooter's judicial admission argument to be persuasive. Accordingly, we will examine the merits of all of the exhaustion arguments raised by the Excess Insurers.

         iii. Certain Excess Insurers' Points on Appeal Regarding Vertical and Horizontal Exhaustion (London Point II, OneBeacon Point II, Evanston Point I, and North Star Point IV)

         London has raised two main arguments relating to exhaustion. First, London argues that horizontal exhaustion of primary insurance is required before triggering coverage, and the trial court erred in determining vertical exhaustion applied. Second, London argues the trial court erred in finding the record supported summary judgment in favor of Nooter and consequently granting Nooter's motion for summary judgment on the exhaustion issue, because Nooter failed to provide sufficient evidence that the limits of Continental's or TIG's primary policies had been exhausted. London also filed a cross-motion for summary judgment to establish those primary policies had not been exhausted, which the trial court denied.

         OneBeacon adopts the arguments made by London in its Point II(B) of its appellate brief, also advocating for horizontal exhaustion of all triggered primary policies. North Star also "joins in and adopts the Argument of London…on the issue of exhaustion set forth in Point II of [London's brief]." Further, Evanston notes that its "position regarding horizontal primary exhaustion is substantially aligned with that set forth in [London's Appellant's Brief]" and it "adopts and incorporates by reference" London's statement of facts and arguments on the matter. Additionally, Evanston has advanced several arguments independent of London.

         London has several substantially similar insurance policies, which we separate into two groups: (1) London's policies from September 1, 1955 through May 17, 1961 (the "Older London Policies"); and (2) London's policies from May 17, 1961 through July 1, 1965 and London's policies from July 1, 1975 to July 1, 1980 (the "Newer London Policies").

         a. Horizontal Exhaustion Arguments

         1. "Other Insurance" Provisions

         For several policies, "Other Insurance" provisions lie at the forefront of our exhaustion analysis. Regarding these types of provisions, the Supreme Court of South Carolina made an apt observation that encapsulates our viewpoint:

When judges first set about the task of interpreting insurance policies, we looked confidently to tried and true principles of contract law. After all, lawyers are taught in their earliest classes that the common law rules of contract are the bedrock of all Anglo-American jurisprudence, thus judges clearly had at hand the perfect tools for crafting fair and lucid interpretations of insurance agreements. We failed utterly to anticipate the linguistic excesses to which the insurance industry would resort in order to avoid paying claims when 'other insurance' may be available. This is an area in which hair splitting and nit picking has been elevated to an art form. 'Other insurance' clauses have been variously described as: 'the catacombs of insurance policy English, a dimly lit underworld where many have lost their way, ' a circular riddle, and 'policies which cross one's eyes and boggle one's mind.'

South Carolina Ins. Co. v. Fidelity and Guar. Ins. Underwriters, Inc., 489 S.E.2d 200, 201-02 (S.C. 1997) (internal quotations omitted).

         The relevant "other insurance" provisions are substantially similar to each other. There are five permutations of "other insurances" language relevant to the issue of exhaustion:

         The Newer London Policies (from May 17, 1961 through July 1, 1965 and July 1, 1975 through July 1, 1980):

OTHER INSURANCE
If other valid and collectible insurance with any other insurer is available to the Assured covering a loss also covered by this Policy, other than insurance that is in excess of the Insurance afforded by this Policy, the Insurance afforded by this Policy shall be in excess of and shall not contribute with such other insurance…

         The National Union Policy:

Other Insurance. If other valid and collectible insurance with any other insurer is available to the insured covering a loss also covered hereunder, this insurance shall be excess of, and shall not contribute with such other insurance…

         All Four Evanston Policies:

Other Insurance: The insurance afforded by this policy shall be excess insurance over any other valid and collectible insurance available to the Insured and applicable to any part of ultimate net loss or excess net loss, whether such other insurance is stated to be primary, contributing, excess, contingent or otherwise, unless such other insurance applies specifically as excess insurance over the limits of liability provided by this policy...

         The OneBeacon Policy (from July 1, 1971 through June 30, 1972, following the form of the Aetna Policy)

Other Insurance. The Insurance afforded by this policy shall be excess Insurance over any other valid and collectible Insurance available to the insured and applicable to any part of ultimate net loss, whether such other insurance is stated to be primary, contributing, excess, contingent or otherwise…

         The OneBeacon Policy (from July 1, 1972 through December 31, 1973, following the form of the Appalachian Policy)

         OTHER INSURANCE

If other collectible insurance with any other insurer is available to the insured covering a loss also covered hereunder (except insurance purchased to apply in excess of the sum of the Retained Limit and the limit of liability hereunder), the Insurance hereunder shall be in excess of, and not contribute with such other insurance…

         The relevant excess insurers argue that the "other insurance" clauses plainly require

         Nooter to exhaust all "other valid and collectible insurance" before the excess policy attaches, as the policy is "in excess of" such other insurance. Nooter, however, argues that it is "well- established Missouri law that 'other insurance language' addresses concurrent, not successive, coverage and the rights among insurers; 'other insurance' language does not limit the insurers' obligations to the policyholder." Respondent's Brief p. 44-45 (citing Heartland Payment Sys., L.L.C. v. Utica Mut. Ins. Co., 185 S.W.3d 225, 232 (Mo. App. E.D. 2006)).

         Policy language is ambiguous when it is reasonably open to different interpretations. Burns, 303 S.W.3d at 509 Concerning the issue of exhaustion, we find both parties offer reasonable interpretations Looking solely at the "other insurance" language in isolation, the relevant excess insurers' explanation is arguably more persuasive However, Missouri and other jurisdictions have interpreted "other insurance" provisions to only apply to "concurrent" policies covering the same policy period See Heartland Payment Sys, LLC, 185 S.W.3d at 232;[23] see also In re Viking Pump, Inc, 52 N.E.3d at 1157 (finding "'other insurance' clauses apply when two or more policies provide coverage during the same period, and they serve to prevent multiple recoveries from such policies, and that such clauses have nothing to do with whether any coverage potentially exists at all among certain high-level policies that were in force during successive years") (emphasis in original); see also Benjamin Moore & Co. v Aetna Cas & Sur Co, 179 N.J. 87, 98, 843 A.2d 1094, 1101 (N.J. 2004) ("'[O]ther insurance' clausesare provisions typically designed to preclude a double recovery when multiple, concurrent policies provide coverage for a loss. We determined that such clauses were not generally applicable in the continuous-trigger context where successive rather than concurrent policies were at issue."); see also Arco Indus. Corp. v. Am. Motorists Ins. Co., 232 Mich.App. 146, 165, 594 N.W.2d 61, 70 (Mich. Ct. App. 1998) (citing Continental Casualty Co. v. Medical Protective Co., 859 S.W.2d 789, 791 (Mo. App. E.D. 1993)), aff'd, 462 Mich. 896, 617 N.W.2d 330 (2000) (explaining "Other Insurance" clauses "relate to the effect of concurrent coverages of a single occurrence. They are individual contractual agreements between the insured and the insurer, designed to prevent the insured from recovering multiple times for an injury that occurs at one point in time"). The fact that jurisdictions dispute the function of "other insurance" provisions in excess policies in similar situations supports a finding of ambiguity. See Harrison v. Tomes, 956 S.W.2d 268, 270 (noting that "divergent conclusions reached by [other] jurisdictions is further evidence of [an] ambiguity" and resolving the ambiguity in favor of the insured).

         Furthermore, although "exhaustion" was not at issue in the case, our Court's analysis of policy language in Doe Run provides further support for Nooter's position.[24] As addressed in the previous section, our application of Doe Run to similar language in the policies currently at issue called for an "all sums" allocation. Although we do not conflate the issues of exhaustion and allocation, [25] courts typically pair either (1) "all sums" allocation with vertical exhaustion or (2) "pro-rata" allocation with horizontal exhaustion, finding the grouped methodologies conceptually consistent. See In re Viking Pump, Inc., 52 N.E.3d at 1156 ("[V]ertical exhaustion is conceptually consistent with an all sums allocation, permitting the Insured to seek coverage through the layers of insurance available for a specific year."); see also Boston Gas Co. v. Century Indem. Co., 454 Mass. 337, 351, 910 n.24 N.E.2d 290, 301 (Mass. 2009) (using "all sums" allocation and "vertical exhaustion" synonymously); Westport Ins. Corp. v. Appleton Papers Inc., Wis.2d 120, 167, 787 N.W.2d 894, 918 (2010) (stating that horizontal exhaustion "is another name for pro rata allocation"); see also Restatement of the Law of Liability Insurance § 44 cmt. j (tentative draft) (2016) ("Under the all-sums approach…insureds exhaust the coverage available in one year using a 'vertical-exhaustion' approach before accessing the coverage available in another year[.]").

         An ambiguity exists when language is reasonably open to different constructions. Owners Ins. Co., 514 S.W.3d at 617. "In determining whether language in the policy is ambiguous, the words will be tested in light of the meaning which would normally be understood by the average layperson." Maher Bros., Inc. v. Quinn Pork, LLC, 512 S.W.3d 851, 856 (Mo. App. E.D. 2017). A person of ordinary intelligence could reasonably conclude that the "other insurance" provisions either call for horizontal exhaustion or are wholly inapplicable to the exhaustion determination. Indeed, when other courts have been confronted with nearly identical language to the policies before us, they have reached opposite conclusions. Further, compared to an average person with "ordinary intelligence, " courts have greater experience in reading and interpreting contracts and legalese, yet they still reach different conclusions, which supports a finding that the language is reasonably open to different constructions and thereby ambiguous. We find the policies containing "other insurance" provisions to be ambiguous on the issue of exhaustion. Consequently, we resolve the ambiguities in favor of the insured, Nooter, and we conclude ...


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