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August 8, 1986


Thomas A. Flannery, United States District Judge.

The opinion of the court was delivered by: FLANNERY


 This matter once again comes before the court on various motions. Plaintiffs have moved for reconsideration and clarification of the court's May 2, 1986 Memorandum and Order and Declaration, 27 E.R.C. (BNA) 1745, regarding both the trigger of coverage issue and the denial of privilege for certain documents. Defendant Mission Insurance Company ("Mission") has moved to stay all proceedings against it pending the outcome of rehabilitation proceedings involving defendant Mission in California. Defendant Midland Insurance Company ("Midland") has moved to dismiss these proceedings against it or to stay them pending the outcome of liquidation proceedings involving defendant Midland in New York.

 The background of these proceedings is adequately related in the court's prior Memorandums of February 4 and May 2, 1986 and will not be repeated here. Each motion is dealt with separately.

 I. Reconsideration of the Trigger of Coverage Issue

 Plaintiffs ask this court to reconsider various aspects of its trigger of coverage ruling, issued May 2, 1986. While plaintiffs do not contest this court's finding that Missouri law controls the trigger of coverage issue, nor that Missouri would apply an injury-in-fact trigger, plaintiffs do seek reconsideration and clarification of three aspects of the ruling: (1) whether the injury in fact must be "diagnosable and compensable" in order to trigger coverage; (2) whether injury in fact may happen at different times for a particular claimant, thereby triggering different policies; and (3) whether technical corrections to the opinion are appropriate. Various defendants filed oppositions to plaintiffs' motion.

 A. Injury in Fact as "Diagnosable and Compensable"

 This court's May 2, 1986 Order and Declaration declared that:

if a finder of fact determines that at some time the effects of exposure to dioxin negligently released by plaintiffs actually resulted in diagnosable and compensable injury in fact to one of the underlying dioxin-related claimants, and if a defendant insurance carrier had a policy in effect at that time, then that defendant's duty to indemnify plaintiffs for the underlying claim is triggered.

 Plaintiffs ask that the court delete reference to "diagnosable and compensable" injury in fact since no such limitation exists in either New York or Missouri law. Upon reconsideration, this court agrees with plaintiffs.

 The "diagnosable and compensable" language was formulated by Judge Sofaer of the Southern District of New York in American Home Prods. Corp. v. Liberty Mut. Ins. Co., 565 F. Supp. 1485, 1489 (S.D.N.Y. 1983). That opinion was affirmed by the Second Circuit, but was modified to delete the "diagnosable and compensable" limitation because there was no basis for it in the policy language. American Home Prods. Corp. v. Liberty Mut. Ins. Co., 748 F.2d 760, 765-66 (2d Cir. 1984); see also Abex Corp. v. Maryland Cas. Co., 252 U.S. App. D.C. 297, 790 F.2d 119 (1986) (recognizing New York law as not imposing a "diagnosable and compensable" limitation). The Missouri case relied on predominantly by this court in interpreting Missouri law regarding the trigger of coverage did use the "diagnosable and compensable" language. Standard Asbestos Mfg. & Insulating Co. v. Royal Indemnity Ins. Co., No. CV80-14909, slip op. at 17 (Cir. Ct. Jackson City, Mo., Apr. 3, 1986). Yet in explaining what kind of injury triggers insurance coverage, that court said that when injury is discovered, "we retrospectively determine" at what point injury was present but not yet realized. Id. at 17-18. This approach suggests adherence to the New York interpretation of injury, which does not limit the occurrence of an injury to one that is diagnosable and compensable during the time of the policy period, but which includes injury that may not have been either diagnosable or compensable during the time a particular policy was in place. A real but undiscovered injury, proved in retrospect to have existed at the relevant time, would establish coverage, irrespective of the time the injury became diagnosable or compensable.

 B. Injury in Fact as Occurring at Different Times

 Plaintiffs seek further clarification that an injury in fact to a claimant may happen at different times, thus triggering more than one policy. In any particular case, it is possible that a trier could find that exposure to dioxin caused injury in fact in year one, and then that further exposure aggravated an existing injury or caused additional injuries in years two or three. What a trier could not find under this court's interpretation of Missouri law, is that due to an exposure in year one, a single injury in fact occurred in year one during exposure, occurred in year five during manifestation, and also occurred in every year in between. A trier must determine at what point a single injury in fact occurred in such circumstances. The insurance policy in place at that time is triggered for that injury. The injury is a distinct event rather than a continuous process extending over a prolonged period of time. This does not preclude the possibility of a single claimant suffering more than one injury depending on the facts of his or her case.

 This concept is not a complex one and this court does not believe that it will be difficult for courts adjudicating ...

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