Key Developments In Coverage Litigation 2009: General Liability

Wisconsin Rules That Each Claimant's Exposure To A Toxic Tort Is A Separate Occurrence; Adopts "All Sums" And Rejects Pro Rata Allocation

Plastics Engineering Co. v. Liberty Mutual Ins. Co., No. 2008AP333-CQ, 2009 WI 13 (Wis. Jan. 29, 2009)

In "Plastics Engineering Co.", the Wisconsin Supreme Court held that, under the "cause" test, each underlying claimant's repeated exposure to asbestos-containing products constitutes a separate "occurrence" where such exposures were separate in time, space and circumstance. The court also ruled that a Wisconsin statute prohibiting competing "other insurance" clauses from reducing the total indemnification available under the policies applied only to concurrent insurance policies, not to successive policies, and therefore the statute did not prevent enforcement of non-cumulation of limits provisions. Finally, in addressing the insurer's contentions regarding allocation among policies issued from the 1960s through 1989, the court expressly rejected a pro rata allocation and held the insurer must fully defend and pay all sums up to policy limits.

Exposure To Mercury Is Not Environmental Pollution

Baughman v. United States Liability Ins. Co., 08-2901, 2009 U.S. Dist. Lexis 106400 (D.N.J. Nov. 12, 2009)

In Baughman, the District Court of New Jersey considered the question of whether mercury qualified as traditional or non-traditional environmental pollution. The case involved closure of a day care due to mercury contamination, allegedly caused because a thermometer manufacturing company operated in the building twenty years earlier. The court found that such contamination did not constitute "traditional environmental pollution" because such pollution "does not include exposure to toxic materials released indoors...", thereby adopting an indoor-outdoor distinction.

Debate Continues Over Coverage For Fax-Blasting Claims

Auto-Owners Ins. Co. v. Websolv Computing, Inc., No. 07-3286, 2009 WL 2750263 (7th Cir. (Ill.) Sept. 1, 2009); Alea London Ltd. v. American Home Services Inc., No. 1:09-CV-158 (N.D. Ga. Dec. 1, 2009); New Century Mortg. Corp. v. Great Northern Ins. Co., 2009 U.S. Dist. LEXIS 100033 (D. Del. Oct. 26, 2009)

Three federal courts considered CGL coverage for liability for unsolicited facsimile transmissions in violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227. In Auto- Owners Ins. Co. v. Websolv Computing, Inc., the Seventh Circuit, applying Iowa law, held that there was no coverage...