Insurer can treat thousands of asbestos claims vs manufacturer as single insurable occurrence, appeals court says

By Dee Thompson | Jan 5, 2018

CHICAGO — A state appeals panel has come down on the side of insurers in an ongoing legal dispute with a manufacturer over the question of whether thousands of asbestos exposure-related lawsuits arising from the same company's products should be treated as a single "occurrence" or multiple occurrences for the purposes of determining how much the insurer would be obligated to pay.

In December, a three-justice panel of the Illinois First District Appellate Court in Chicago upheld a Cook County judge's finding, granting Travelers Insurance Company its motion for summary judgment in the litigation brought by United Conveyor, of Waukegan.

The decision was authored by Justice Mary Anne Mason, with justices Aurelia Pucinski and Michael B. Hyman concurring.

United Conveyor manufactures ash-handling conveyor systems for coal plants. The systems remove ash and other by-products from furnaces and put them into holding tanks using pipes. For decades, beginning in the 1930s, gaskets on the pipes were sealed with a substance containing asbestos, producing airtight seals designed to withstand high heat. 

However, beginning in 1983, United was hit with thousands of lawsuits in Illinois and elsewhere from workers alleging they were made sick from inhaling asbestos fibers "while installing, maintaining or repairing (United's) systems,” according to the appellate court decision. 

Travelers covered asbestos-related claims for United from 1952 to 1977. However, the policies differentiated between coverage based "per-occurrence" or higher, aggregate limits for multiple occurrences. Viewing the claims as a single occurrence instead of multiple occurrences saved Traveler’s $9.65 million dollars, according to court records.

In 2012, United sued Travelers, asking that all the asbestos claims be viewed as multiple occurrences, which would trigger the higher aggregate limit of the policies. United also claimed that Travelers breached its contract by viewing the asbestos losses as a single occurrence.

After several years of litigation, Travelers filed a motion for summary judgment in 2015, “...asserting that the underlying asbestos claims arose from a single occurrence because they were based on United’s continuous manufacture and sale of conveyor systems containing asbestos components."

The appellate justices sided with the insurance company. 

“...United’s asbestos losses resulted from a continuous and systematic process, Travelers’ lower per-occurrence limit applies and the trial court did not err in entering summary judgment in Travelers’ favor and denying United’s summary judgment motion," Mason wrote in the decision. 

United is represented in the matter by the firm of Jenner & Block, of Chicago.

Travelers is represented by Dentons US LLP, of Chicago.

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Organizations in this Story

Dentons - Chicago Illinois First District Appellate Court Jenner & Block LLP Travelers Insurance Company United Conveyor Corporation

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