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Zurich American Insurance Co. v. Insurance Company of North America

United States District Court, E.D. Missouri, Eastern Division

May 21, 2019




         In 2014, plaintiff Zurich American Insurance Company (ZAIC) settled and paid an asbestos claim on behalf of its insured Anheuser-Busch, LLC (A-B). During the period of alleged asbestos exposure at issue in the claim, A-B was consecutively insured by ZAIC and Insurance Company of North America (INA). ZAIC brought this suit for equitable contribution, subrogation, and unjust enrichment against INA. After INA asserted a defense of failure to include all necessary parties, ZAIC added A-B as a defendant. A-B was dismissed from this lawsuit on May 8, 2018.[1] Before me now are cross-motions for summary judgment brought by ZAIC and INA on the issue of whether INA owes ZAIC any money for the underlying settlement. Because I conclude that the pollution exclusion in INA's policy bars coverage of the underlying claims as a matter of law, I will grant summary judgment in favor of INA on all claims asserted against it. My analysis follows.

         Standards Governing Summary Judgment

         In determining whether to grant summary judgment, the court views the facts - and any inferences from those facts - in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The movant bears the burden of establishing that (1) it is entitled to judgment as a matter of law and (2) there are no genuine issues of material fact. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Once the movant has met this burden, however, the nonmoving party may not rest on the allegations in its pleadings but must, by affidavit and other evidence, set forth specific facts showing that a genuine issue of material fact exists. Fed.R.Civ.P. 56(c)(1), (e). Where a factual record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial. Matsushita, 475 U.S. at 587.

         “[T]he filing of cross motions for summary judgment does not necessarily indicate that there is no dispute as to a material fact, or have the effect of submitting the cause to a plenary determination on the merits.” Wermager v. Cormorant Twp. Bd., 716 F.2d 1211, 1214 (8th Cir. 1983). Instead, each summary judgment motion must be evaluated separately on its own merits to determine whether a genuine issue of material fact exists and whether the movant is entitled to judgment as a matter of law. Husinga v. Federal-Mogul Ignition Co., 519 F.Supp.2d 929, 942 (S.D. Iowa 2007).

         Applying the foregoing standards, I find the following undisputed, material facts relevant to the remaining issues in the case.

         Undisputed Facts

         In 2008, the estate of the wife of a former A-B employee filed a wrongful death suit against A-B.[2] The suit alleged that the decedent wife contracted mesothelioma as a result of her husband's exposure to asbestos during his employment as a mechanic with A-B. The lawsuit did not involve any asbestos product manufactured by A-B at the brewery. Instead, decedent's husband allegedly carried asbestos and asbestos dust from the A-B brewery where he worked and then the decedent “inhaled and ingested” these asbestos dust particles and fibers when she came into contact with his person and while laundering his work clothes. The complaint alleged that A-B was aware of the need for proper hygiene procedures to insure that asbestos was not carried home on the employees' person and work clothes and was further aware of the dangers of asbestos to all those foreseeably exposed to asbestos, including family and household members of A-B employees. The period of alleged exposure occurred between July 30, 1971 (the date of their marriage), and July 31, 1996 (the date of the employee husband's retirement from A-B).

         Discovery conducted in the Cotter case established that the decedent's husband came into frequent contact with asbestos while performing maintenance on the brewery's instrumentation and in tunnels beneath the brewery. Asbestos was floating around in the air and on the floor in piles of dust. A-B mechanics, including the decedent's husband, were not provided uniforms or laundry service and instead worked in their regular clothes, which they wore to and from work. They would get asbestos all over their clothing and could see the asbestos dust in the air. Consequently, they took dirt, asbestos dust, and grease with them when they left the job.

         A-B tendered defense of the Cotter suit to insurer ZAIC, who agreed to provide A-B with a defense subject to a reservation of rights to seek contribution for the periods insured after 1980.[3] The parties settled during a 2014 mediation for $1.5 million - an amount all parties stipulate was reasonable.

         A-B purchased Policy No. GA 85-79-000 from ZAIC for the period of July 1, 1967 to July 1, 1972 for personal injury liability and excess liability coverage, among other coverages. Subsequently, A-B purchased Policy No. GA 87-13-500 for the period of July 1, 1972 to July 1, 1980 from ZAIC with similar personal injury and excess liability coverage. As stipulated by the parties, endorsements to these policies have excess coverage limits between fifteen and twenty-five million dollars. ECF No. 79 ¶ 7. These policies contain the following provisions:

(1) Coverage for “all sums”:
Zurich will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of … personal injury … to which this insurance applies. ECF No. 79-2 at 4; ECF No. 79-3 at 4 (emphasis added).
(2) Limiting language:
This insurance applies only to bodily injury or property damage which occurs during the policy period.
ECF No. 79-2 at 12; ECF No. 79-3 at 4.

         They also contain provisions on “Other Insurance” which state:

When both this insurance and other insurance apply to the loss on the same basis, whether primary, excess or contingent, Zurich shall not be liable under this policy for a greater proportion of the loss than stated in the applicable contribution provision below:
(A) Contribution by Equal Shares. If all of such other valid and collectible insurance provides for contribution by equal shares, Zurich shall not be liable for a greater proportion of such loss than would be payable if each insurer contributes an equal share until the share of each insurer equals the lowest applicable limit of liability under any one policy or the full amount of the loss is paid.
ECF No. 79-2 at 20.

         Beginning July 1, 1980 and continuing for the next seventeen consecutive years, A-B was insured by INA under Policy No. ISG 1065 for bodily injury liability. Similar to the ZAIC policies, the INA policy includes:

(1) Coverage for “all sums”:
The Company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of personal injury, property damage or advertising offense to which this ...

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