2020 Ohio 5325
Ohio Ct. App.2020Background
- William Powell Co. (Powell) faced thousands of asbestos bodily-injury claims arising from products made before 1987 and sought coverage under multiple primary and excess CGL policies issued from 1969–1977.
- OneBeacon issued three excess policies (covering 1969–1976) and several primary policies; Federal issued one excess policy (1976–1977). National Union issued a later primary policy (1977–1979) containing a $250,000 per-occurrence self-insured retention (SIR).
- Dispute centered on whether OneBeacon’s and Federal’s excess policies were triggered by exhaustion of only the directly underlying primary policies (vertical exhaustion) or by exhaustion of all collectible underlying primary insurance across periods (horizontal exhaustion).
- After a multi-week bench trial the trial court ruled that horizontal exhaustion applied, found some excess policies not triggered (reduced insurer liability), allowed insurers to seek contribution/reimbursement from Powell for payments made, and confirmed Powell’s right to allocate claims under the Goodyear “all sums” approach.
- On appeal this court (1) held the excess policies support vertical exhaustion, (2) concluded the National Union policy was not an underlying collectible policy for the OneBeacon/Federal excess years, (3) found OneBeacon breached some excess-policy obligations for years where its directly underlying primary limits were exhausted, and (4) reversed the trial court’s allowance of insurer contribution from the insured but permitted restitution to Federal for payments made under reservation of rights.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper exhaustion method for excess policies (vertical v. horizontal) | Excess attaches once the directly scheduled underlying policy for the same period is exhausted (vertical). | Excess requires exhaustion of all collectible underlying insurance (horizontal), including adjacent-year policies. | Court: Policies unambiguous; “underlying” means insurance covering the same occurrences/policy period. Vertical exhaustion applies. |
| Is National Union’s 1977–1979 primary policy "underlying and collectible" given its $250,000 SIR? | National Union is not collectible underlying insurance for OneBeacon/Federal excess years (different period); SIR argument bolsters non-collectibility. | National Union is underlying/collectible despite SIR; SIR doesn’t change underlying status. | Court: National Union policy (1977–1979) is not underlying/collectible for OneBeacon/Federal excess years and therefore does not bar attachment of those excess policies. Court declined to resolve broader SIR effect issue. |
| Did OneBeacon breach its excess contracts by failing to pay defense/indemnity? | OneBeacon breached where its directly scheduled underlying primary limits beneath a given excess policy were exhausted; excess then attached. | OneBeacon contends its excesses were not attached because collectible primary limits (including some OneBeacon primary policies) remained and/or National Union applied. | Court: In part. OneBeacon did not breach for years where directly underlying OneBeacon primary limits remained; it breached for years where scheduled underlying limits beneath the excess were exhausted. Remanded to quantify damages. |
| Can OneBeacon/Federal obtain contribution or restitution from Powell for payments already made? | Insurers argued equitable contribution/reimbursement is available where they paid amounts not their fair share. | Powell argued insurers cannot recover contribution from their insured and payments made under proper attachment are not recoverable. | Court: Trial court abused discretion in awarding contribution against insured. Federal, having paid under Powell’s demand with a reservation of rights and where its policy was not attached, is entitled to restitution ($477,385.80). OneBeacon paid only on attached excesses and is not entitled to restitution. |
| Did Powell waive its Goodyear allocation rights or forfeit them by laches? | Powell consistently asserted Goodyear allocation rights and did not waive; compilation difficulties ≠ waiver. | OneBeacon argued Powell waived or unreasonably delayed allocation claims, permitting pro rata allocation. | Court: Powell did not waive or unreasonably delay. Trial court correctly upheld Powell’s right to direct allocation under Goodyear. |
Key Cases Cited
- Goodyear Tire & Rubber Co. v. Aetna Cas. & Sur. Co., 95 Ohio St.3d 512 (2002) (adopts the “all sums” allocation allowing insured to seek full recovery from a single triggered policy for continuous injuries)
- William Powell Co. v. OneBeacon Ins. Co., 75 N.E.3d 909 (1st Dist. 2016) (prior appellate decision addressing multiple-occurrence trigger and ripeness)
- Babcock & Wilcox Co. v. Arkwright-Boston Mfg. Mut. Ins. Co., 53 F.3d 762 (6th Cir. 1995) (endorses exposure-based trigger for asbestos claims)
- Montrose Chem. Corp. v. Superior Court of Los Angeles Cty., 9 Cal.5th 215 (2020) (distinguishes primary and excess insurer obligations and attachment points)
- Padilla Constr. Co. v. Trans. Ins. Co., 150 Cal.App.4th 984 (2007) (holding SIR does not necessarily prevent a policy from being 'underlying')
- Dart Industries, Inc. v. Commercial Union Ins. Co., 28 Cal.4th 1059 (2002) (other-insurance clauses allocate among insurers and do not change obligations to the insured)
- Consol. Edison Co. of New York v. Allstate Ins. Co., 98 N.Y.2d 208 (2002) (other-insurance clauses prevent multiple recoveries for the same period)
- Chiquita Brands Internatl., Inc. v. Natl. Union Fire Ins. Co. of Pittsburgh, 57 N.E.3d 97 (1st Dist. 2015) (restitution may lie where insurer pays under reservation of rights and performance is not due)
- Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216 (2003) (principles of insurance-contract interpretation)
- Cincinnati Ins. Co. v. ACE INA Holdings, Inc., 175 Ohio App.3d 266 (1st Dist. 2007) (asbestos trigger analysis)