(Article from Insurance Law Alert, October 2020)
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A New York appellate court ruled that a trial court erred in holding that injury-in-fact in an asbestos action occurs from the date of first exposure through death or filing of suit, thereby triggering every policy during that time frame. Carrier Corp. v. Allstate Ins. Co., 2020 WL 5987010 (N.Y. App. Div. 4th Dep’t Oct. 9, 2020).
In this asbestos-related coverage suit, a New York trial court granted the insured’s partial summary judgment motion, ruling that all policies in effect from first exposure through death or commencement of suit were triggered. The appellate court reversed, ruling that an issue of fact exists as to the appropriate trigger under New York’s injury-in-fact standard. More specifically, the appellate court held that the insurer raised a factual dispute as to whether injury-in-fact occurs only when “a threshold level of asbestos fiber or particle burden is reached that overtakes the body’s defense mechanism.” The appellate court rejected the insured’s contention that the insurer was estopped from asserting this argument because it was party to a case in California in which the issue was litigated and decided against it. Dismissing the collateral estoppel argument, the court noted that the issues in the two cases were not identical and that New York and California apply different substantive laws in determining what event triggers asbestos-related coverage, or when asbestos-related injury occurs.
The appellate court also ruled on several other issues, including allocation. Relying on Matter of Viking Pump, Inc., 27 N.Y.3d 244 (2016) (discussed in our May 2016 Alert), the court ruled that the non-cumulation and prior insurance clauses in the policy at issue “plainly contemplated” all sums allocation and vertical exhaustion.