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KEENE CORP. v. INSURANCE CO. OF NORTH AMERICA

January 30, 1981

KEENE CORPORATION, Plaintiff,
v.
INSURANCE COMPANY OF NORTH AMERICA et al., Defendants



The opinion of the court was delivered by: GREEN

MEMORANDUM OPINION

Plaintiff, Keene Corporation (Keene), is a New York corporation licensed to do business in D.C. The defendants, Insurance Company of North America, Aetna Casualty and Surety Company, Hartford Accident & Indemnity Co., Liberty Mutual Insurance Company and Pennsylvania Manufacturers Association, (PMA) *fn1" are all insurance companies which wrote policies of insurance for general liability for Keene or its subsidiary-predecessors. Plaintiff seeks a declaratory judgment under the policies of the respective defendants.

 From time to time, Keene or Keene Building Products Corporation (KBPC), a wholly owned subsidiary, acquired all of the right, title and interest in the following manufacturers of insulation containing asbestos: Ehret Magnesia Manufacturing Co. (Ehret), Baldwin-Hill (B-H) and Baldwin-Ehret-Hill (BEH).

 In 1976, Keene closed out all of its thermal insulation products containing asbestos and has neither made nor sold them since that time.

 Recently, more than 5,000 cases have been filed against Keene or its predecessors, alleging personal injury or wrongful death as a result of the use of its products which contained asbestos insulating material. The injuries claimed are asbestosis, mesothelioma and bronchogenic carcinoma.

 Keene has called upon the defendant insurance companies to defend the suits and indemnify Keene under the general liability policies whether the action is against Keene, Ehret, B-H, BEH or KBPC. The defendants have failed to do so at considerable cost to Keene for defense and/or settlement of claims.

 The insurance companies provided coverage as follows: INA insured BEH from December 31, 1961 through August 23, 1968; Hartford insured Keene and predecessors from August 23, 1971 through October 1, 1974; Liberty insured Keene from August 23, 1967 through August 23, 1968, and again from October 1, 1974 through September 30, 1980, and Aetna insured Keene from August 23, 1968 through October 1, 1971. *fn2" All of these policies contained products coverage.

 Plaintiff has filed a motion for partial summary judgment, leaving for later, the question of damages.

 Aetna has alleged that this Court has no jurisdiction to consider the matter. It claims that no case or controversy exists because the 5,000 plus cases have not been impleaded.

 A declaratory judgment is an appropriate means for resolving controversies relating to the extent of coverage under a policy of insurance. Ins. Co. of No. Am. v. Forty-Eight Insulations, 451 F. Supp. 1230 (1978), aff'd 633 F.2d 1212 (6th Cir., 1980); Friestad v. Travelers Ind. Co., 452 Pa. 417, 306 A.2d 295 (1973); Crown Cork & Seal, Inc. v. Aetna Casualty & Surety Co., et al., Pa.Ct. of Common Pleas (Oct. 9, 1980). Moreover, the determination of the respective rights and duties of the various companies is a proper subject for summary judgment.

 This Court makes no determination as to the liability or other pertinent matter on the individuals' suits against Keene and its former affiliates. Nothing contained herein shall prevent the insurance company or companies involved from raising all pertinent defenses. However, it is a case of controversy when a company which has bought coverage cannot get representation in lawsuits filed against it or indemnification because of arguments between the insurance companies themselves and the insured. The result is that the insured is without the representation it has paid for. Accordingly, Aetna's motion for summary judgment, which the Court more properly treats as a motion to dismiss, is denied.

 Liberty, INA and Aetna maintain that manifestation of the bodily injury during the policy period triggers the coverage. Keene and Hartford, on the other hand, maintain that exposure to asbestos is the controlling policy period for a person who develops one of the asbestos caused ailments. The insurance policies provide coverage for bodily injury caused by an occurrence during the policy period. The Court must therefore decide when the bodily injury occurs in asbestos caused ailments.

 This Court has heard testimony from two medical experts on asbestos related diseases, both of whom agree that the diseases asbestosis, mesothelioma and bronchogenic carcinoma have origins in concentrated inhalation of asbestos fibers, and that these diseases are cumulative and progressive. The physical symptoms caused by these three diseases do not manifest themselves to an injured individual until years after the initial inhalation of asbestos. With asbestosis, sometimes 15 or 20 years will pass before an individual develops shortness of breath and a cough. The waiting period is even longer with those who develop bronchogenic carcinoma due to asbestos inhalation. However, it is clear that bodily injury has occurred long before these symptoms develop.

 The Court will first address the etiology of asbestosis as the overwhelming majority of underlying suits allege injuries due to asbestosis. Dr. Kleinerman attempted to equate the occurrence of the injury or disease in asbestosis with the advanced development of fibrosis, which he said generally occurs years after exposure. *fn3" However, he also stated that "any ...


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