NJ Supreme Court Won't Hear Asbestos Insurance Row
Law360, Jersey City (July 8, 2015, 8:10 PM ET) -- The New Jersey Supreme Court has declined to review an appeals ruling in favor of an industrial pump manufacturer that successfully sued its excess insurers for coverage of underlying asbestos claims under a $1.85 billion program, defeating the insurers' quest to be released from paying the claims.The high court on Wednesday denied a petition by the insurers to rehear its case against IMO Industries Inc., effectively holding a September New Jersey Appellate Division decision that excess insurers should not be allowed to revisit individual, settled claims where the defense has already been paid by the primary insurers.
The insurers had appealed a 2010 verdict and other rulings holding them liable for providing coverage to IMO for underlying personal injury claims stemming from a mass tort against the company that manufactured asbestos-containing products.
The trial court had relied on the high court's 1994 ruling in Owens-Illinois v. United Insurance Co. in 1994, the three-judge appeals panel said in its opinion. The trial judge had said the case delineated the response required of excess insurers to their insureds' liability for asbestos-related injuries sustained over decades, and that it divided past case law principles from its doctrines,
“It stands to reason that accommodating a challenge to coverage in tens of thousands of individual claims would not only prove daunting, but would compromise the integrity of the framework Owens-Illinois offers for efficient and equitable allocation of losses among policies,” read the opinion by Judges Jerome M. St. John, Joseph Yanotti and Victor Ashrafi.
“As we have stated, policy terms and traditional principles applicable to ordinary coverage litigation must bend insofar as they conflict with application of the Owens-Illinois framework,” the appeals judges said.
Some of the projects manufactured by IMO's predecessor, Delaval Stream Turbine Co., between the 1940s and 1980s had component parts that contained asbestos, according to the opinion. Delaval originated in 1901 and made turbines, pumps and gears for industrial and military uses. Delaval was acquired in 1963 by Transamerica Corp., one of the defendants in this case, and emerged as IMO after a divestiture in 1986, according to the opinion.
About 75,000 asbestos-related claims had been filed against IMO at the time of the trial court ruling, the opinion said. IMO began to notify the excess insurers of the claims in 1989 and offered to make its claim files available to them for inspection, according to the opinion, and the company had settled 15,000 cases and obtained dismissal of about 30,000.
Transamerica attorney Sherilyn Pastor of McCarter & English LLP, noted that her client had prevailed in suits lodged by IMO dating back to 2003, and the Appellate Division's 2014 ruling upheld all judgments in Transamerica's favor.
“This case was always about IMO Industries trying to foist its asbestos liabilities on its former parent, Transamerica Corp.," she said. "We are thrilled that this decade-long saga for Transamerica Corp. is over, and that it has been completely vindicated, having prevailed on all claims against it by its co-insured and former subsidiary, IMO. We look forward to recovering the costs assessed against IMO and the excess insurers."
Representatives for IMO not respond to requests for comment Wednesday.
IMO is represented by Robin L. Cohen and Kenneth H. Frenchman of Kasowitz Benson Torres & Friedman LLP and Steven J. Roman of Dickstein Shapiro LLP.
The defendants are represented by McCarter & English LLP, Riker Danzig Scherer Hyland & Perretti LLP, Budd Larner PC, White and Williams LLP, Tompkins McGuire Wachenfeld & Barry LLP, Lewis Baach PLLC, Rivkin Radler LLP, Meckler Bulger Tilson Marick & Pearson LLP, Coughlin Duffy LLP, L'Abbate Balkan Colavita & Contini LLP, Ford Marrin Esposito Witmeyer & Gleser LLP, Locke Lord LLP and Norris McLaughlin & Marcus PA.
The case is IMO Industries Inc. v. Transamerica Corp. et al., case number A-6240-10T1 , in the Superior Court of New Jersey, Appellate Division.