The opinion of the court was delivered by: PRATT
FINDINGS OF FACT AND CONCLUSIONS OF LAW
JOHN H. PRATT, UNITED STATES DISTRICT JUDGE.
The above entitled cases were tried from February 8, 1989 through February 14, 1989. Eleven witnesses presented live testimony. In addition, certain deposition testimony was read into the record and a great volume of exhibits were offered by the parties, including a substantial amount of additional deposition testimony. The recorded transcript of the proceeding alone totals 1187 pages.
The trial of these two consolidated cases was bifurcated, the Court having ordered on September 15, 1987 that the scope of defendants' exclusions and the affirmative defenses of mistake and estoppel (the defense of misrepresentation was subsequently withdrawn before trial) be tried first. Bifurcation was predicated on two rulings of the Court which held that the defendants' asbestos-related exclusions are ambiguous and that defendants accordingly would be permitted to present extrinsic evidence "for the purpose of showing that the parties' objective intentions were to exclude from coverage all asbestos-related diseases and not only the disease medically known as asbestosis." See Carey Canada Inc. v. California Union Ins. Co., 83-1105, Mem. Opinion at 2 n. 1 (D.D.C. May 7, 1985); Carey Canada Inc. v. California Union Ins. Co., 708 F. Supp. 1 (D.D.C. 1989). We also pointed out that "the burden on defendants would not be light." Mem. Opinion at 9-10.
The issues presented at trial and awaiting decision are: (1) whether the exclusions set forth in the policies apply to all asbestos-related disease claims or only claims involving the distinct, single disease medically known as asbestosis; (2) whether the exclusions of the Home and National Union insurance policies should be reformed to express the intent of the parties to exclude all asbestos-related disease claims; and (3) whether plaintiffs should be estopped from claiming that defendants' policies do not exclude all asbestos-related disease claims.
1. Plaintiffs are mining and manufacturing companies that have been named as defendants in numerous lawsuits alleging injury due to exposure to asbestos, a product which they once mined and processed. Carey Canada is a wholly-owned subsidiary of Celotex, which in turn is the wholly-owned subsidiary of its Florida-based parent company, Jim Walter Corporation (Jim Walter).
2. The three remaining defendants, The Home Insurance Company ("Home"), National Union Fire Insurance Company of Pittsburgh, Pennsylvania ("National Union") (2 policies), and Columbia Casualty Company ("Columbia"), are excess liability insurers which sold policies to Jim Walter that provide coverage to plaintiffs.
Plaintiffs seek a declaration that the asbestos-related exclusion in each of defendants' policies excludes only the distinct disease known as asbestosis and not any form of cancer. Each of these four policies has a maximum exposure of $ 5 million.
3. Four policies sold by defendants remain at issue. Home's policy, no. HEC9631289, covers the period from 10/1/77 - 10/1/78 and has been held by this Court to follow form to the exclusion in the underlying Northbrook policy which states:
This policy shall not apply to claims made against the insured arising out of Asbestosis or any similar condition caused by Asbestos.
Two National Union policies remain at issue. The first, no. 118977, covers the period from 10/1/77 - 10/1/78 and states:
It is understood and agreed that any bodily injury or property damage claim or claims arising out of all asbestosis operations is excluded from the policy. (Emphasis in original.)
The second, no. 1226411, covers the period from 10/1/79 - 10/1/80, and has been held by the Court to follow form to the exclusion in the underlying United States Fire Insurance Company ("U.S. Fire") policy,
This policy shall not apply to any liability imposed upon the insured arising out of ASBESTOSIS. (Emphasis in original.)
One Columbia Casualty policy also is at issue. That policy, no. RDX 416-93-97, covers the period from 10/1/78 - 10/1/79 and states that it:
Shall not apply to liability imposed upon the insured arising out of asbestosis.
This policy adopts the exact wording of the underlying U.S. Fire policy's exclusion.
4. The employees of Jim Walter most involved in obtaining excess liability insurance for Jim Walter were Charles Harvey and Vernon Herrmann. From 1972 to 1983, Harvey was the Director of the Jim Walter Corporate Insurance Department and from 1972 until 1984, Herrmann was the Assistant Manager. Both of these individuals presented testimony.
5. Rollins Burdick Hunter (RBH) served as Jim Walter's retail broker in securing this coverage. Jim Walter relied on RBH exclusively to represent its interests and was Jim Walter's agent throughout the entire period. RBH employees most involved were Ron Ursich, Larry Sorensen and Randy Tchon. These persons were beyond the reach of this Court's subpoena power and ...