Insurance Law

Continental Wins $2.4 Million Summary Judgment Ruling against Policyholder

The United States District Court for the Eastern District of Michigan recently granted Continental Casualty Company’s motion for summary judgment and entered judgment in the amount of $2,425,774.84 in favor of Continental against Indian Head Industries, Inc., [subscribers can access an enhanced version of this opinion: lexis.com | Lexis Advance], finding that Continental was only liable for its pro rata share of defense costs for thousands of underlying asbestos bodily injury lawsuits. Continental is represented by Troutman Sanders LLP, and the full decision is here.

In 2005, Continental filed a declaratory judgment action, seeking, inter alia, a declaration that Continental was only obligated to pay its pro rata share defense costs and that it had no obligation to pay either defense or indemnity for liabilities that Indian Head assumed under a contract with Thyssen-Bornemisza, Inc.

The Court had previously resolved many of the parties’ coverage disputes. It held that Continental was only required to pay its pro rata share of defense and indemnity costs, that the Continental policies’ contractual-liability exclusions barred coverage for claims that only alleged exposure prior to Indian Head’s assumption of Thyssen’s liability in 1984, and that the injury-in-fact trigger applied to the underlying claims.

The Court’s $2.4 million award reaffirmed these holdings and applied them to 1,121 underlying claims. The Court agreed with Continental’s position as to all claims and held that Continental was entitled to $2,425,774.84 in reimbursement from Indian Head. The Court also held that its ruling prospectively applies to any costs incurred on or after the relevant time period in the summary judgment papers.

Rebecca L. Ross

Seth M. Erickson

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