Segal McCambridge Legal Blog

The decision can be found at http://www.nycourts.gov/reporter/3dseries/2012/2012_00421.htm

From http://newsandinsight.thomsonreuters.com/Legal/

A New York appellate court affirmed a $420.4 million ruling in favor of insurer Travelers Cos, handing it a victory in one of the longest-running and most complex asbestos-related litigations in history.

The dispute has to do with the obligations of certain reinsurers to Travelers, which joined in payments of nearly $1 billion to cover asbestos claims against the company Western MacArthur. Travelers subsequently sought to recover some of its payments from its reinsurance companies.

Among those reinsurers is the U.S. unit of industry leader Munich Re and units of the insurer and reinsurer ACE Ltd. A spokeswoman for Munich Re Americas declined to comment. An ACE spokesman could not immediately be reached for a comment.

In October 2010 a lower New York court ruled that the reinsurers were obliged to help cover Travelers. That ruling was affirmed on appeal on Tuesday.

The Appellate Division, First Department, ruled 4-1 that the reinsurance companies were bound by a concept known as the “follow the fortunes doctrine,” which holds that reinsurers share the burdens taken on by the insurance companies with which they do business.

The appellate court found that the lower court “correctly determined that the follow-the-fortunes doctrine required defendants to accept the reinsurance presentation made by (Travelers unit) USF&G.”

A Travelers spokesman could not immediately comment on the ruling.

The facts behind the case date to 1948, when USF&G first wrote a liability insurance policy for Western Asbestos Co. By the late 1970s, people harmed by asbestos began to sue Western Asbestos’ successor company, Western MacArthur, which in 1993 sued USF&G and two other insurers seeking indemnification.

In 2002, the sides reached a settlement, which resulted in Western MacArthur going into bankruptcy. USF&G then sought indemnification from its reinsurers.

The one dissenter in Tuesday’s ruling was Justice Sheila Abdus-Salaam, who said there was a genuine dispute as to whether some of the settlement USF&G reached with Western MacArthur was subject to the reinsurance treaties.

Besides the length of the litigation, the case is notable because of the high-profile law firms involved. Travelers was represented on the appeal by Simpson Thacher & Bartlett, while Wachtell, Lipton, Rosen & Katz represented Munich Re and Boies, Schiller & Flexner represented ACE.

The case is United States Fidelity & Guaranty Company vs. American Re-Insurance Co, New York Supreme Court, Appellate Division, First Department, No. 604517/02.

For American Re-Insurance Company: Herbert Wachtell of Wachtell, Lipton, Rosen & Katz.

For Excess Casaulty Reinsurance Association and OneBeacon America Insurance Company: Kathleen Sullivan of Quinn Emanuel Urquhart & Sullivan.

For ACE Property & Casualty Company: George Carpinello of Boies, Schiller & Flexner.

For respondents: Mary Kay Vyskocil of Simpson Thacher & Bartlett

In a recent opinion out of the New York County Supreme Court, Justice Sherry Klein Heitler found that a defendant in an asbestos case, Treadwell Corp., provided insufficient explanation for why it waited for almost a year before seeking a of change venue, nor did it present sufficient evidence to merit such a change.

Plaintiff, Linda A. Hussain, filed suit against numerous companies whose conduct allegedly exposed Joseph C. Lang to asbestos, resulting in his death. Mr. Lang’s alleged exposures occurred outside of New York City during his career as a bricklayer at various steel plants in upstate New York.

As a result of the upstate exposures and lack of connection to New York City, Treadwell moved for a change of venue, arguing that New York County was not the proper venue. Justice Heitler found that the doctrine of laches prevented Treadwell from prevailing on its motion. Justice Heitler said that by April 2010, Treadwell knew the decedent suffered no exposure to asbestos in any of New York’s five boroughs but that it offered no “cogent reason” for the delay in filing the motion until March 2011 in seeking a change of venue.

New York City Jury Awards More Than $50 Million in 2 Asbestos Cases, Including $32 Million in Naval Case

A jury hearing arguments in two separate asbestos cases has awarded more than $50 million to the two plaintiffs, including a total of $32 million to a former U.S. Naval worker, Ronald Dummit, who claimed that he was exposed to asbestos-containing products associated with Crane Co. and Elliot Turbomachinery aboard seven U.S. Navy ships over an almost 20 year career. Dummit was awarded $16 million for past pain and suffering and $16 million for future pain and suffering. Crane Co. was allocated 99 percent liability while Elliot Turbomachinery was assigned the remaining 1 percent liability.

The companion case, Konstantin, resulted in a verdict of almost $20 million for mesothelioma of the tunica vaginalis (the serous mebrane which covers the testicles) allegedly resulting from exposure to drywall and joint compounds used at construction sites where the lone remaining defendant, Tishman Liquidating Corp., f/k/a Tishman Realty and Construct Co Inc., was the general contractor at both construction sites. The plaintiff claimed that Tishman had violated Section 200 of the New York Labor Law, which required the Tishman to maintain a safe workplace for construction site workers.

Judge Joan A. Madden presided over the trials of the two cases, which took place before a single jury.

The press release from the Plaintiff’s firm, Jordan and Fox can be found here

From Business Insurance.com

OneBeacon does not owe CNA reimbursement for asbestos defense: N.Y. court

As of June 6, 2011, the opinion can be found here

NEW YORK—Timely notice must be given to obligate an insurer to pay defense costs, a New York Supreme Court’s appellate division has ruled.

The case, Continental Casualty Co. et al. vs. Employers Insurance Co. of Wausau and Robert A. Keasbey Co., stems from a long-running asbestos liability dispute. At issue is how to allocate defense costs among insurers involved in the litigation against now-defunct contractor Keasbey.

In a previous ruling, a judge agreed with Continental’s parent company—CNA Financial Corp.—that the four insurers involved, including CNA, had an equal duty to defend Keasbey, and that CNA was entitled to be reimbursed by OneBeacon America Insurance Co. for one-quarter of the cost of defending Keasbey.

According to Thursday’s decision, Keasbey never bought a policy directly from OneBeacon, but was covered by two wrap-up policies issued by OneBeacon that provided liability coverage to contractors working on a specified project at a nuclear power plant. Neither policy had an asbestos exclusion.

The court said defense coverage provided to Keasbey under CNA’s primary policies was exhausted by 1992, but that CNA did not find evidence of the OneBeacon wrap-up policies until 2003 and sought to make OneBeacon reimburse CNA for its costs in defending Keasbey in asbestos actions since March 1, 2003.

Review overturns previous ruling

Upon review, a New York Supreme Court appellate division reversed much of the previous ruling. The court said CNA is not entitled to be reimbursed by OneBeacon for the costs of defending Keasbey in asbestos actions from March 1, 2003, to Sept. 30, 2007, or for any portion of the costs defending the same actions after Sept. 30, 2007, because it had "failed to establish that it gave OneBeacon timely notice of any of the actions."

The court also held that to the extent CNA paid for Keasbey’s defense in any asbestos actions commenced after Sept. 30, 2007, CNA was barred from seeking reimbursement from OneBeacon unless it established that it had provided OneBeacon with "timely notice of that particular action under the terms of the OneBeacon policies."

The court, however, also held that CNA "has no further obligation to defend or indemnify" Keasbey in asbestos actions involving primary comprehensive general liability policies it had issued to Keasbey from Feb. 15, 1970, to Feb. 15, 1987.

Following up on an earlier post from Forbes.com, here is the Business Insurance.com article on a New York state court ruling that Corning Inc.’s insurers have the right to see communications between Corning and representative of claimants in asbestos lawsuits.

The New York State Supreme Court, Appellate Division, First Department decision in Mt. McKinley Insurance Company, etc., et al., Plaintiffs, v. Corning Incorporated, Defendant-Appellant, AIU Insurance Company, et al., Defendants, Century Indemnity Company, etc., et al., Defendants-Respondents.can be found here in .html format

The New York State Supreme Court, Appellate Division, First Department decision in .pdf format is here

NEW YORK—A New York state court held this week that Corning Inc.’s insurers have the right to see communications between Corning and representative of claimants in an asbestos liability case.

Corning was seeking insurance coverage for a contribution it planned to make in connection with Pittsburgh Corning Corp.’s bankruptcy trust’s planned asbestos personal injury trust. Corning and PPG Industries Inc. each own 50% of Pittsburgh Corning, which filed for bankruptcy protection in 2000.

A New York County Supreme Court judge already had ruled that the insurers had the right to see the documents, which Corning appealed. Corning argued that the communications were privileged, because it shared a common interest with the asbestos claimants because they were working together to confirm a bankruptcy plan of reorganization. But Century Indemnity Co., one of Corning’s insurers, argued that Corning and the claimants remained in adversarial positions because they were involved in renegotiating the terms of the bankruptcy plan and that the communications were necessary evidence in the coverage action.

The New York Supreme Court Appellate Division, First Department, rejected the appeal, holding unanimously this week that Corning and the committee representing asbestos claimants had never said that they had a "reasonable expectation" of confidentiality concerning the communications. The court held that Corning failed to establish that the communications were in furtherance of a common legal interest

From LegalNewsline.com

PHILADELPHIA (Legal Newsline) – Local law firms seem to make up the majority of Philadelphia’s asbestos docket at the Complex Litigation Center, but some regional and national firms also have a presence in the city.

A list of all trials scheduled for 2011 shows only 10 different law firms will be trying cases in Philadelphia, where a process called “reverse bifurcation” is used. A jury decides damages in the first phase of the trial, and then determines if the defendant is liable in the second part.

Among the big-name law firms who have trials scheduled next year are the Law Offices of Peter Angelos, Baron & Budd and Weitz & Luxenberg.

Forty-three trials are set to take place. In Philadelphia, plaintiffs are grouped for trial by their law firm and their alleged illnesses.

“It’s usually pretty much the same attorneys,” said Stanley Thompson, executive director of the CLC. “It’s the same players.”

As of Oct. 3, there were 631 active asbestos cases at the CLC, which was designed to solve a backlog of more than 7,000 cases. Thompson says the amount of lawsuits filed by these attorneys stays steady at 200-250 every year.

The full LegalNewsline.com article can be found here

The Southeast Texas Record article can be found here

Courtesy of Law.com.

Southern District of New York Judge Alvin K. Hellerstein on Wednesday approved the settlement in the 9/11 respiratory illness litigation at the end of a nearly seven-hour-long hearing.

The judge and lawyers for the parties in the litigation pushed hard to persuade World Trade Center rescue and cleanup workers exposed to allegedly toxic dust at the site to accept a settlement that could run as high as $716 million.

Although billed as a “fairness hearing,” the session was clearly an effort to convince at least 95 percent of 10,000 claimants to opt into the settlement. The deal requires 95 percent acceptance in order to go into effect.

Kenneth R. Feinberg, who was appointed by Hellerstein to hear appeals from compensation decisions, spoke by conference call from Washington, D.C., and addressed the principal uncertainty confronting plaintiffs — legislation being negotiated on Capitol Hill to provide more money to 9/11 first responders and cleanup workers.

“If you opt out in the hope that there will be a better legislative alternative down the road, I believe personally, you will be making a mistake,” said Feinberg. “The legislative process grinds slowly and after waiting over five years for the legislation to be enacted, it is still not enacted.”

Hellerstein had rejected an initial settlement on March 19 as providing inadequate compensation to those injured at Ground Zero.

On Wednesday, he defended the latest deal during the seven-hour session that included emotional testimony from some plaintiffs as well as presentations by lawyers.

The settlement calls for the slotting of plaintiffs along four tiers based on the severity of their injuries, with tier four including the most serious health problems, such as lung cancer.

Warner explained that 50 percent of the 10,000 plaintiffs are expected to qualify for tier four and will received 94 percent of the cash in the settlement that will range between $625 million and $716 million, depending on the number of people who opt in and future claims made over the next five years.

The entire story is here