Bondex International, Inc. v. Hartford Accident & Indemnity Co.
2011 U.S. App. LEXIS 23763
| 5th Cir. | 2011Background
- RPM and subsidiaries Bondex and New Republic seek additional coverage for thousands of asbestos claims arising from The Reardon Company products; policies issued in Ohio (1973-1985) do not name Old Reardon or Reardon Division but cover Reardon-related claims under Products Hazard caps; district court held de facto merger extended caps to Old Reardon; on appeal, court affirms based on policy language and course of dealing; Reardon Division continued Old Reardon’s business post-1966 and used same brands/plants/employees; Old Reardon dissolved in 1966 but its operations continued as a division under RPM; insurers paid aggregate limits and Appellants now seek uncapped coverage and defense costs; district court exhausted Mt. McKinley’s liability and dismissed contingent claims; Ohio law governs contract interpretation and plain language controls
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Old Reardon and Reardon Division are Named Insureds | Old Reardon and Reardon Division fall within Named Insured scope | Only entities named or explicitly covered qualify | Yes, they qualify as Named Insureds; Products Hazard caps apply |
| Whether Contractual Liability theory provides uncapped coverage | Contractual liability should override caps for certain policies | Gibraltar/Cardinal contracts do not overcome express caps; not pleaded properly | Rejected; no uncapped coverage |
Key Cases Cited
- Welco Indus., Inc. v. Applied Cos., 67 Ohio St.3d 344 (1993) (used to apply hallmarks for interpretation of insurance contracts)
- SmithKline Beecham Corp. v. Rohm & Haas Co., 89 F.3d 154 (3d Cir.1996) (broad definitions can alter coverage depending on context)
- Lager v. Miller-Gonzalez, 120 Ohio St.3d 47, 896 N.E.2d 666 (2008) (ambiguity requires reasonable alternative interpretations)
- O’Malley v. U.S. Fid. & Guar. Co., 776 F.2d 494 (5th Cir.1985) (bad faith analysis linked to exhaustion outcomes)
- Cincinnati Indem. Co. v. Martin, 85 Ohio St.3d 604, 710 N.E.2d 677 (1999) (interpretation of insurance terms when ambiguous)
- United States v. A.C. Strip, 868 F.2d 181 (6th Cir.1989) (choice of law governs insurance contract interpretation)