a single occurrence, the continuous or repeated exposure to the asbestos in the Kaylo product commercially manufactured and sold by O-I. Aetna thereupon retreated from its earlier position and it now argues that O-I's cross-motion on this issue rests on certain factual assumptions that are either in dispute or without support in the record before the Court. First, Aetna argues that O-I "injected" a new factual issue into this case concerning O-I's "business purpose" in purchasing insurance. Second, Aetna posits that this Court is required to examine elements such as a claimant's time, place and length of exposure, type of product and similar factors in order to properly determine whether claims may be aggregated into a single occurrence pursuant to the unifying definitional provision. Despite Aetna's assertions of disputed factual matters, the Court finds this issue ripe for summary judgment.
Aetna implies that the rights and obligations created by the "occurrence" provisions cannot be determined without consideration of the facts of a particular claimant's exposure to asbestos. The Court has before it, however, the terms of the insurance policies, the fact that asbestos related disease developed after exposure to O-I's product and the fact that O-I can be held liable for the injuries. Cf. Keene, 667 F.2d at 1038 n.3, 1040. The Court is not aware of any facts that would come to light in an underlying claim that would be relevant to the interpretation of the retained limit/per occurrence provisions in the context presented here. Aetna concedes that its requested factual framework does not go to the meaning of the subject provisions but to the facts in the underlying cases. Since Aetna admits that it is not known how little exposure to asbestos is required to cause disease, the Court has difficulty in discerning the relevance of these underlying facts.
More importantly, Aetna's request that this Court stay resolution of this case until it is able to ascertain thousands or possibly tens of thousands of individual claimants' conditions of exposure to asbestos would entail an administrative nightmare. Such a task would necessarily span several calendar years. To posit that such an undertaking is contemplated by the language of the unifying definitional provisions is a clear distortion of the policy language. Accordingly, the Court finds Aetna's underlying "framework" irrelevant to the disposition of the present issue. Since irrelevant evidence is by definition immaterial, a proffer of it does not and cannot create an issue of material fact. Fed.R.Civ.P. 56; McKeithen v. S.S. Frosta, 430 F. Supp. 899, 905 (E.D. La. 1977).
Aetna's request for discovery of O-I's "business purpose" in purchasing indemnity insurance is likewise an irrelevant issue of fact for purposes of summary judgment. The Keene decision has already enumerated an insured's "business purpose" in purchasing insurance: "an exchange of an uncertain loss [the possibility of incurring legal liability] for a certain loss [the premium payment]. . . . At the heart of the transaction is the insured's purchase of certainty -- a valuable commodity." 667 F.2d at 1041.
This Circuit's decision in Keene makes it clear that the principles embodied in the policies provide a sufficient basis for resolving this case. See Keene, 667 F.2d at 1041. In discerning these principles, the Court is to be guided by the expectations that O-I could have reasonably formed, as an objective matter, on the basis of the policies' language. Id. at 1041-42 and n.12. Cf. Champion International Corp. v. Continental Casualty Co., 546 F.2d 502, 505 (2d Cir. 1976) (deductible provisions should be examined in light of the business purpose sought to be achieved and plain meaning of the words chosen by the parties to effect those purposes); Transport Insurance Co. v. Lee Way Motor Freight, Inc., 487 F. Supp. 1325, 1327 (N.D. Tex. 1980) (same). See also Union Carbide Corp. v. Travelers Indemnity Co., 399 F. Supp. 12, 17 (W.D. Pa. 1975) (terms of policy should be construed in light of the hazard insured against).
In determining O-I's reasonable, objective interpretation of the policies, the starting point must be an examination of O-I's expectations regarding Aetna's promise of certainty to O-I. Such a reasonable interpretation is that the policies issued to O-I were intended to relieve O-I of the risk of liability of which O-I could not be aware when it purchased insurance. Cf. Keene, 667 F.2d at 1047. O-I did not expect, nor should it have expected, that its security would be undermined by the arrival of a proliferation of products litigation virtually unprecedented in the history of the American judicial system.
If O-I were obligated to pay a deductible on each claimant's lawsuit, O-I would be deprived of the security for which it paid. Such an interpretation would effectively emasculate the coverage purchased by O-I since no individual claim exceeds the amount of the deductible. On the other hand, the single occurrence interpretation maintains O-I's reasonable expectations.
As discussed previously, the policies' definition of occurrence and unifying definitional provisions focus on the cause of injury. Therefore, the Court's inquiry is whether there was one proximate, uninterrupted and continuing cause which resulted in all of the injuries and damage. E.g., Appalachian, supra, 676 F.2d at 61. Analysis should focus on "the underlying circumstances which resulted in the claim for damages." Champion, supra, 546 F.2d at 505-06. Here, the underlying circumstance that gave rise to the claims for damages was O-I's manufacture and sale of a hazardous asbestos containing product. O-I was insuring against its liability for personal injuries arising out of its products. O-I's liability in the underlying suits is premised on the claimants' submission of proof that among the asbestos fibers that he inhaled was an asbestos fiber from O-I's "Kaylo." See, e.g. Borel v. Fibreboard Paper Products, 493 F.2d 1076, 1096 (5th Cir. 1973), cert. denied, 419 U.S. 869, 42 L. Ed. 2d 107, 95 S. Ct. 127 (1974) (holding asbestos manufacturers jointly and severally liable for asbestos related diseases that were caused, in part, by its products). It is undisputed that all suits brought by all claimants share a common feature: each claimant alleges at least one exposure to O-I's asbestos-containing product. See Affidavit of John S. Backer in Support of Aetna's Opposition to Partial Summary Judgment, "per occurrence" issue.
An examination of the policies' large annual and per occurrence limit provisions also supports the conclusion that, when O-I purchased the policies, the parties reasonably expected that O-I would be required to pay only one deductible for claims like those resulting from asbestos-related injury. The insurance package purchased by O-I in 1972, for example, provides for a total limit of $20 million for each occurrence, an aggregate annual limit of $20 million and a per occurrence deductible for products of $250,000. If, as Aetna initially argued, each separate claim constituted one occurrence, then Aetna's limit of liability provisions would be rendered meaningless as it strains the imagination to conceive of a single claim that would generate $20 million of damage. On the other hand, it is reasonably foreseeable that a manufacturer, who is principally engaged in the manufacture and sale of glass containers, would be involved in a causative event producing multiple injuries and resulting in total damages of $20 million or more.
Finally, the single occurrence characterization of all personal injury arising out of exposure to O-I's asbestos-containing Kaylo product is confirmed by courts that have addressed similar disputes concerning per occurrence deductibles. See, e.g., Champion International Corp. v. Continental Casualty Corp., 546 F.2d at 505-06 (2d Cir. 1976) (insured's sale and subsequent distribution of defective panels to 1400 claimants single occurrence under unifying definitional provision); Transport Insurance Co. v. Lee Way Motor Freight, Inc., 487 F. Supp. 1325, 1330-31 (N.D. Tex. 1980) (pattern and practice of discrimination single occurrence); Cargill, Inc. v. Liberty Mutual Insurance, 488 F. Supp. 49 at 53 (D. Minn. 1979) (production of defective medium for growing antibiotics single occurrence despite separate sales of defective product and numerous "batches" affected); Wilkinson & Son, Inc. v. Providence Washington Insurance Co., 124 N.J. Super. 466, 471, 307 A.2d 639, 642 (1973) (contractor damaging several apartments by tracking paint on carpets single occurrence); Southern International Corp. v. Poly-Urethane Industries, Inc., 353 So.2d 646, 648 (Fla. Dist. Ct. App. 1977) (contractors damaging several different condominiums while applying sealant to each roof single occurrence).
In sum, the allocation of rights and obligations established by the insurance policies would be undermined if O-I's coverage is subject to multiple deductibles. The Court finds that in order to preserve O-I's reasonable expectations, the manufacture and sale of Kaylo must be regarded as the single occurrence triggering liability for asbestos-related injury. The Court concludes, therefore, that O-I's coverage under a policy for asbestos-related claims is subject to payment of a single deductible. "Occurrence" is interpreted to mean all personal injury arising out of the asbestos contained in O-I's Kaylo products.
In view of the foregoing, there being no genuine issue as to any material facts and O-I being entitled to judgment as a matter of law on both the Keene and per occurrence issues, the Court finds that summary judgment must be granted on both of O-I's motions. An appropriate order accompanies this opinion.
POLICY NO. 02XS 7525SCA
(9/1/71 - 9/1/72)
[Section 1 - Declaration sets forth policy's Limits of Liability as (1) "Each Occurrence" - $20,000,000; (2) "Aggregate Annual" - $20,000,000; (3) "Retained Limit" - $50,000]