Month: October 2020

By David A. O’Neill JD

POLICYFIND’S CO-FOUNDER & DIRECTOR OF INVESTIGATION, DAVID O’NEILL, JD, EXPLAINS THE DECISION IN COLONY INSURANCE COMPANY V. BUCKEYE FIRE EQUIPMENT CO.

The U.S. District Court for the Western District of North Carolina ruled on October 19, 2020 that the “hazardous materials” exclusion in a 2008 CGL policy did not apply to relieve the insurer of its duty to defend a manufacturer of fire suppressant foam against allegations of bodily injury from direct product exposure. The court’s decision appears to be the first of several hundred cases consolidated in North Carolina alleging bodily injury and property damage from exposure to products containing perfluoroctane sulfanate (PFOS) and/or perfluorooctanic acid (PFOA).

In Colony Insurance Company v. Buckeye Fire Equipment Co., Colony sought the Court’s declaration that its “hazardous exposure” exclusion applied to bar its duty to defend in a case where a firefighter was significantly exposed to elevated levels of PFOS and PFOA in his demonstration and application of Buckeye’s products. The Colony policy defined “hazardous materials” in part as “pollutants” and defined “pollutants” as “any solid, liquid, gaseous irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.”

Looking to North Carolina law, the District Court cited a 1991 case styled West American Insurance Co. v. Tufco Flooring East, Inc. in which the state court of appeals found a duty to defend despite the presence of a pollution exclusion. The Tufco court characterized the terms used in the pollution exclusion as “environmental terms of art” and reasoned that any “discharge, dispersal, release or escape of pollutants” therefore needed to be into the environment to trigger the pollution exclusion and deny coverage to the insured.

Further, the District Court found that the Tufco rule had been applied in a 4th Circuit Court of Appeals case styled Auto-Owners Insurance Co. v. Potter where the insured was sued for bodily injury based on contact with contaminated water. That court had determined that “under North Carolina law, an insurer may not deny coverage to an insured based on a pollution exclusion, or any variation thereof, if the occurrence and the resulting injury and property damage allegedly suffered….are not the prototypical environmental harms that a pollution exclusion clause is generally intended to protect against.”

Applying the Tufco rule to the Colony Insurance Company case, the District Court determined that the firefighter’s bodily injury complaint did not allege the “prototypical environmental harm” that the pollution exclusion was intended to protect against. Hence, the exclusion was ineffective to bar the insurer’s duty to defend.

LOOKING FORWARD
This decision by the U.S. District Court for the Western District of North Carolina is expected to be indicative of its future decisions in the underlying cases as it applies the law of the various states to issues identified here concerning the use of firefighting products containing PFOS and PFOA. The underlying cases include those from Maryland, Washington and New Hampshire – all states where courts have found personal injury can result from exposure to pollutants. Also, this North Carolina decision did not determine whether the insurer had the duty to indemnify, only that it had the duty to defend. That issue remains to be decided in the various cases.

PolicyFind is an insurance archeology firm and the nation’s leader in locating historical insurance coverage that applies to latent injury claims.

If you represent clients whom are impacted by direct exposure injury claims, contact us for a confidential consultation.

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David A. O’Neill, Director of Investigations

David O’Neill has over 20 years of experience in claims recovery on behalf of corporate policyholders involving environmental property damage and toxic tort and asbestos exposure claims. He is an accomplished insurance archeologist with extensive experience in locating and retrieving insurance coverage evidence on behalf of potentially responsible parties responding to environmental investigation and remediation demands. Mr. O’Neill is also an experienced PRP investigator with knowledge of CERCLA/SARA requirements, having conducted over thirty PRP searches at Superfund hazardous waste sites for PRP defense counsel and previously for USEPA Regions V and VIII. Mr. O’Neill was formerly Insurance Research Manager for Risk International Services, Inc. He graduated from Case Western Reserve Law School in 1986.

 

POLICYFIND’S CO-FOUNDER & DIRECTOR OF INVESTIGATIONS, DAVID O’NEILL, JD, DISCUSSES THE KEY STARTING POINT TO INSURANCE ARCHEOLOGY SUCCESS

PolicyFind’s Co-Founder and Director of Investigations, David O’Neill, JD, has over 20 years of experience in claims recovery on behalf of corporate policyholders involving environmental property damage, toxic tort and asbestos exposure claims. In 2001, he and Steve Henshaw founded PolicyFind after discovering that attorneys needed insurance archeology for a variety of other client projects outside of funding environmental cleanup and legal defense.

Since then, David and the rest of the insurance archeology team at PolicyFind have located over $5 billion dollars in usable insurance assets. He has personally worked on over 700 projects including the reconstruction of insurance coverage for the countrywide rollup of the nation’s largest waste disposal company.

In David’s time as an insurance archeologist, he’s heard just about every question you can possibly think to ask about insurance archeology services, and how they can benefit a policyholder. David answers the most common question he says he hears is, “What is the likelihood you can find my lost policies?”

WHAT IS THE LIKELIHOOD YOU CAN FIND LOST POLICIES?
In order to answer this question, I first have to ask, “To what business records of the insureds do you have access?” Our likelihood of success improves when we have some business records to reference as we get started. We are not talking insurance documents here, although that would be great. We are only asking for correspondence or property records—really just anything from those years in which the alleged harm occurred that is the basis of the claim.

Learn our three tips for starting an insurance archeology project.

More often than not, a client or their attorney will overlook these documents. The attorney may not even know to ask for them. But they are incredibly valuable. These documents may not be actual policies, but they can potentially help us track down other evidence of coverage.

Often our clients come to us empty-handed, but after working with them, we discover business records exist. We would much rather you have access to these documents before you approach us. That way we’re not spending our initial efforts searching for business records in the hands of others.

I recommend that attorneys become better acquainted with their client’s corporate history and the records their client generated during the course of that history. We will be glad to assist in this process and the likelihood of our success will be greatly improved.

Contact us for a free confidential consultation.

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Insured’s Awareness of Opioid Epidemic, not a Known Loss

By David A. O’Neill, JD

A Delaware state court has ruled that Rite Aid pharmacies, defendants in thousands of lawsuits alleging tortious distribution of opioids, can receive reimbursement from their insurer for their defense expenditures. On September 22, 2020, the Delaware Superior Court in New Castle, Delaware issued its opinion, granting Rite Aid’s motion for partial summary judgment in the case styled Rite Aid Corp. et al v. ACE American Insurance Company et al. The opinion addressed those suits brought by governmental entities against Rite Aid Corp. alleging that it knowingly distributed and improperly dispensed opioids to their citizens, contributing to drug abuse, addiction, injury and death.

In Rite Aid Corp. et al v. ACE American Insurance Company et al, Rite Aid brought a suit against Chubb Ltd. Rite Aid alleged breach of contract for Chubb’s denial of coverage under a 2015 insurance policy that contained a $3 million self-insured retention. While not deciding the merits of the Rite Aid suit, the Delaware court liberally construed the Chubb policy’s “duty to defend” clause in ruling that the government suits “and all Opioid lawsuits alleging similar claims are potentially covered under the policy.”

The court rejected the insurer’s argument that Rite Aid’s “knowledge of personal injury, and the opioid epidemic” prior to the 2015 insurance policy’s effective date constituted the kind of “known loss” or “loss-in-progress” that would relieve its insurer’s obligations.  The court also ruled that Rite Aid’s “inadequate action“ in the “distribution and dispensing” of opioids constituted “a single occurrence” under the policy, rather than multiple occurrences, so that Rite Aid would need to only ante its $3 million once, rather than for each suit.

PolicyFind will monitor this evolving situation to learn if Rite Aid Corp. et al v. ACE American Insurance Company et al may set a precedent for other carriers providing coverage to those associated with litigation in opioid matters.

If you have any questions, contact PolicyFind.

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David A. O’Neill, Director of Investigations

David O’Neill has over 20 years of experience in claims recovery on behalf of corporate policyholders involving environmental property damage and toxic tort and asbestos exposure claims. He is an accomplished insurance archeologist with extensive experience in locating and retrieving insurance coverage evidence on behalf of potentially responsible parties responding to environmental investigation and remediation demands. Mr. O’Neill is also an experienced PRP investigator with knowledge of CERCLA/SARA requirements, having conducted over thirty PRP searches at Superfund hazardous waste sites for PRP defense counsel and previously for USEPA Regions V and VIII. Mr. O’Neill was formerly Insurance Research Manager for Risk International Services, Inc. He graduated from Case Western Reserve Law School in 1986.

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