R.T. VANDERBILT COMPANY, INC. v. HARTFORD ACCIDENT AND INDEMNITY COMPANY ET AL.
SC 20000, SC 20001, SC 20003
Supreme Court of Connecticut
Officially released October 8, 2019
Robinson, C. J., and Palmer, D’Auria, Mullins, Kahn and Ecker, Js.
Syllabus
The plaintiff, which previously mined and sold industrial talc that allegedly contained asbestos, sought, inter alia, a declaratory judgment to determine, inter alia, its rights and obligations under certain insurance policies issued by the defendant insurance companies as to the costs of defending and indemnifying the plaintiff in numerous civil actions brought against it for personal injuries sustained allegedly as a result of exposure to asbestos. The defendants consisted of approximately thirty insurance companies, including H Co. and C Co., primary insurers that issued certain insurance policies to the plaintiff between 1948 and 2008, when it mined and sold talc, and L Co., M Co., and P Co., secondary insurers that issued umbrella or excess coverage to the plaintiff during that same period. Prior to trial, the court issued certain scheduling orders separating the trial into four phases, the first two of which were tried to the court and focused on issues pertaining to how defense and indemnification costs were to be allocated between the plaintiff and the defendants, specifically with respect to long latency claims alleging that the claimants’ exposure to asbestos caused a series of injuries that developed gradually over the course of years, thereby implicating multiple insurance policy periods. The court also considered, inter alia, whether certain pollution and occupational disease exclusions in some of the secondary insurance policies precluded coverage. After the first two phases of the trial were complete, the trial court issued memoranda of decision applying the time on the risk rule of contract law, which provides for pro rata allocation of defense and indemnity costs for asbestos related disease claims, in order to determine how to allocate those costs among the parties. In doing so, the trial court adopted the continuous trigger theory of insurance coverage, pursuant to which every insurer that had issued a policy in effect from the date that a claimant was first exposed to asbestos until the date the claimant manifested an asbestos related disease is potentially liable for defense and indemnity costs. To that end, the trial court precluded the admission of expert testimony regarding the adoption of the trigger theory of liability and medical science about the timing of bodily injury from asbestos related disease. The court also adopted the unavailability of insurance exception to the time on the risk rule, pursuant to which defense and indemnity costs are allocated to the insured for periods of time during which insurance is not available. With respect to the pollution exclusions at issue, the trial court concluded that they were ambiguous as to whether they encompassed claims arising from exposure to asbestos, as opposed to claims strictly involving traditional environmental pollution, and, therefore, that those exclusions did not preclude coverage. As to the occupational disease exclusions contained in two policies issued by L Co. and P Co., the trial court concluded that those exclusions were unambiguous and that they barred coverage only for claims brought by the plaintiff’s own employees, not for claims brought by nonemployees who developed occupational diseases while using the plaintiff’s talc in the course of working for other employers. Thereafter, the plaintiff and certain defendants were granted permission to file interlocutory appeals with the Appellate Court pursuant to the rules of practice (§ 61-4 [a]). The Appellate Court concluded that the trial court properly adopted, as a matter of law, a continuous trigger theory of coverage for asbestos related disease claims and, accordingly, upheld the preclusion of expert testimony proffered by M Co. on the timing of bodily injury from asbestos related disease. The Appellate Court also upheld the trial court’s adop-tion of an unavailability of insurance exception to the time on the risk rule and agreed with the trial court that the pollution exclusions were ambiguous and did not bar coverage for the underlying claims outside of the context of traditional environmental pollution. With respect to the occupational disease exclusions, however, the Appellate Court disagreed with the trial court’s determination that those exclusions were ambiguous and concluded that those exclusions unambiguously barred coverage for occupational disease claims brought not only by the plaintiff’s own employees, but also by nonemployees who developed an occupational disease while using the plaintiff’s talc in the course of working for other employers. The Appellate Court reversed in part the judgment of the trial court, and the plaintiff and certain defendants, on the granting of certification, filed separate appeals with this court. Held:
1. The Appellate Court properly upheld the decision of the trial court to adopt a continuous trigger theory of coverage for asbestos related disease claims and an unavailability of insurance exception to the time on the risk rule of contract law, and to preclude M Co.’s proffered expert testimony regarding medical science and the timing of bodily injury from asbestos related disease, and also properly upheld the trial court’s conclusion that the pollution exclusions do not bar coverage for asbestos related disease claims: following a careful examination of the appellate record and consideration of the briefs and arguments presented as to those issues, this court concluded that the Appellate Court sufficiently addressed those issues and, accordingly, adopted the relevant parts of that court’s opinion as the proper statement of the issues and the applicable law concerning those issues.
2. The Appellate Court correctly concluded that the language of the occupational disease exclusions in the secondary insurance policies issued by L Co. and P Co. applied not only to claims brought against the plaintiff by its own employees, but clearly and unambiguously excluded from coverage claims brought by nonemployees of the plaintiff who developed asbestos related diseases while using the plaintiff’s talc in the course of working for other employers: contrary to the plaintiff’s claim that the term ‘‘occupational disease,’’ which was not specifically defined by the policies issued by L Co. and P Co., is a term of art devoid of meaning outside of the employer-employee relationship and workers’ compensation law, that term has a meaning, as gleaned from dictionaries in print at the time the policies were issued, outside of the context of workers’ compensation law that contemplates an illness caused by factors or conditions arising out of one’s employment; moreover, the occupational disease exclusions did not expressly limit their application to the plaintiff’s employees, whereas other exclusions in those policies expressly contained such limiting language, and the Appellate Court’s reading of the exclusion did not render the liability coverage provided by the policies meaningless, because, although the exclusions may significantly limit coverage, the parties had stipulated that there were additional classes of nonemployees whose claims were not barred by the occupational disease exclusions.
Argued March 28—officially released October 8, 2019
Procedural History
Action for, inter alia, a declaratory judgment to determine the rights of the parties in connection with certain insurance policies as to the defense and indemnification of the plaintiff in numerous civil actions brought against it for personal injuries allegedly sustained as a result of asbestos exposure, and for other relief, brought to the Superior Court in the judicial district of Hartford and transferred to the judicial district of Waterbury, Complex Litigation Docket, where Columbia Casualty Company et al. were joined as defendants; thereafter, the court, Shaban, J., denied the motions for summary judgment filed by the defendant Mt. McKinley Insurance Company et al.; subsequently, the plaintiff withdrew the complaint as against the defendant TIG Insurance Company; thereafter, the court bifurcated the trial and ordered that the parties’ declaratory judgment claims be tried to the court in four phases; subsequently, the court granted the motions for summary judgment filed by the defendant Government Employees Insurance Company and to dismiss filed by the defendant National Union Fire Insurance Company of Pittsburgh, PA, and denied the motions for summary judgment filed by the defendant National Casualty Company et al.; thereafter, the first phase was tried to the court; subsequently, Vanderbilt Minerals, LLC, was substituted as the plaintiff; thereafter, the second phase was tried to the court; subsequently, the court issued memoranda of decision; thereafter, the defendant Everest Reinsurance Company appealed and the substitute plaintiff cross appealed to the Appellate Court; subsequently, the court, Shaban, J., granted the motions filed by the substitute plaintiff and the defendant Mt. McKinley Insurance Company for permission to appeal to the Appellate Court; thereafter, the Appellate Court granted the motions for permission to appeal filed by the substitute plaintiff and the defendant Mt. McKinley Insurance Company; subsequently, the substitute plaintiff and the defendant Mt. McKinley Insurance Company filed separate appeals with the Appellate Court; thereafter, the substitute plaintiff and the defendant Everest Reinsurance Company filed amended appeals; subsequently, the defendant St. Paul Fire and Marine Insurance Company et al. filed separate appeals and cross appeals with the Appellate Court, which consolidated the appeals and cross appeals; thereafter, the Appellate Court, Lavine, Beach, and Bear, Js., reversed in part the judgment of the trial court and remanded the case for further proceedings, and the substitute plaintiff and the defendant Mt. McKinley Insurance Company et al., on the granting of certification, filed separate appeals with this court. Affirmed.
John W. Cerreta, with whom were Kathleen D. Monnes and, on the brief, Erick M. Sandler, for the appellants in SC 20000 (defendant Travelers Casualty and Surety Company et al.). Jacob M. Mihm and Marilyn B. Fagelson, with whom were Proloy K. Das, Rachel Snow Kindseth and, on the brief, Stephen Hoke, for the appellant in SC 20003 and the appellees in SC 20000 and SC 20001 (substitute plaintiff).
Lawrence D. Mason, pro hac vice, with whom, on the brief, were John A. Lee, pro hac vice, Michael F. Lettiero, Laura P. Zaino, Lawrence A. Serlin, pro hac vice, William A. Meehan, Alexander J. Mueller, pro hac vice, Stephen T. Roberts, Robert M. Flannery, Heather L. McCoy, Jeffrey R. Babbin, Michael Menapace, Michael J. Smith, pro hac vice, Bryan W. Petrilla, pro hac vice, Matthew G. Conway, Kevin M. Haas, pro hac vice, Marianne May, pro hac vice, Louis B. Blumenfeld and Lawrence A. Levy, pro hac vice, for the appellees in SC 20003 (defendant National Casualty Company et al.).
Alexander J. Mueller, pro hac vice, with whom was William A. Meehan, for the appellees (defendant Certain London Market Insurers et al.).
Stephanie V. Corrao and Laura A. Foggan, pro hac vice, filed a brief for the Complex Insurance Claims Litigation Association as amicus curiae in SC 20000 and SC 20001.
Michael T. McCormack filed briefs for the National Association of
R.T. VANDERBILT COMPANY, INC. v. HARTFORD ACCIDENT AND INDEMNITY COMPANY ET AL.
SC 20000, SC 20001, SC 20003
Supreme Court of Connecticut
Officially released October 8, 2019
Opinion
ROBINSON, C. J. These certified appeals, which present us with several significant questions of insurance law, arise from coverage disputes between the plaintiff, R.T. Vanderbilt Company, Inc. (Vanderbilt),1 and the defendants, who are numerous insurance companies (insurer defendants)2 that issued primary and secondary comprehensive general liability insurance policies to Vanderbilt between 1948 and 2008, stemming from thousands of underlying lawsuits alleging injuries from exposure to industrial talc containing asbestos that Vanderbilt mined and sold. Vanderbilt and the insurer defendants appeal, upon our granting of their petitions for certification,3
The opinion of the Appellate Court aptly sets forth the relevant background facts and procedural history.4 ‘‘Vanderbilt is a Connecticut corporation engaged in the mining and sale of various chemical and mineral products. In 1948, it began to produce industrial talc through its subsidiary, Gouverneur Talc Company. Vanderbilt continued to mine and sell talc until 2008, when it ceased production and sold off the last of its inventory.
‘‘Over the past several decades, thousands of underlying actions have been filed against Vanderbilt in various jurisdictions throughout the United States, many of which remain pending. Those actions alleged that talc and silica mined and sold by Vanderbilt contained asbestos or otherwise caused diseases that are correlated to asbestos exposure, such as mesothelioma, other asbestos related cancer, and asbestosis (collectively, asbestos related disease). In response, Vanderbilt has taken the position that its industrial talc does not contain asbestos. From the time that it started
‘‘Vanderbilt brought the present action against several insurance companies that issued it primary insurance policies between 1948 and 2008 . . . .’’ Id., 76–77; see footnote 2 of this opinion (listing defendants). In particular, Vanderbilt alleged that its primary insurers—Hartford Accident and Indemnity Company, and Continental Casualty Company, Columbia Casualty Company and Continental Insurance Company (collectively, Continental) ‘‘had breached their contractual obligations to pay their proper shares of defense and indemnity costs in the underlying actions. Vanderbilt also sought a declaratory judgment as to the parties’ respective rights and responsibilities under the policies at issue.
‘‘Continental subsequently filed a [third-party] complaint against various insurance companies that had provided secondary coverage—umbrella or excess5—to Vanderbilt during the time that it was in the talc business.’’ (Footnote altered.) R.T. Vanderbilt Co. v. Hartford Accident & Indemnity Co., supra, 171 Conn. App. 77. ‘‘Vanderbilt thereafter brought direct claims against these [third-party] secondary insurers.’’ Id., 78.
‘‘Prior to the start of trial, the trial court issued a series of scheduling orders, pursuant to which it separated the trial into four phases. In the first two phases, which were tried to the court and have been completed, the court addressed Vanderbilt’s declaratory judgment claims and related counterclaims and cross claims. The primary issue before the court in those phases was how insurance obligations are to be allocated with respect to long latency6 asbestos related claims alleging injuries that occur over the course of years or even decades and, therefore, potentially implicate multiple insurance policy periods. Specifically, in Phase I, the court addressed the question of how defense costs for the underlying actions were to be allocated as between Vanderbilt and its insurers. That required a determination of (1) the periods during which the defendants’ insurance policies were in effect and (2) whether Vanderbilt should be treated as self-insured for any period so as to create an equitable obligation to contribute to the costs of its defense. In Phase II, the court considered the same questions with respect to indemnity costs. In that phase, the court also issued rulings with respect to the meaning of various policy provisions, the exhaus-tion of Vanderbilt’s primary policies, and related issues. In Phase III of the trial, which also will be tried to the
‘‘In addressing the allocation questions in Phases I and II, the trial court proceeded on the assumption that Connecticut follows a pro rata, [time on the risk] approach to allocating insurance obligations in long-tail cases. See footnote [6] of this opinion. Under that allocation scheme, the court assumed that a victim of asbestos related disease suffers continuous injuries commencing at the time of initial exposure to asbestos and extending until disease manifests and, therefore, that defense and indemnity costs must be allocated across all of the insurance policies on the risk (i.e., potentially liable) during that period (allocation block). The court further assumed that (1) the policyholder is responsible for a pro rata share of costs for any period during which it is uninsured or underinsured (proration to the insured), including so-called ‘orphan share’ periods covered by policies that were lost, destroyed, or issued by insurers that subsequently became insolvent; but (2) Connecticut has embraced an unavailability of insurance exception pursuant to which there is no proration to the insured for periods during which insurance is not available. Applying these principles to the present case, the court held evidentiary hearings during Phases I and II to determine, among other things, whether defense and indemnity insurance coverage, respectively, was available for asbestos related claims between 1948 and 2008 and, if so, whether Vanderbilt availed itself of such coverage.’’ Id., 79–80.
On the basis of findings of fact rendered after Phase I,7 the trial court ‘‘determined that the allocation of defense and indemnity costs would be applied prospectively in the following manner, on the basis of a total potential exposure period of [732] months running from 1948 through 2008:8 (1) as to defense costs, Vanderbilt would be liable for 265 of the [732] months; (2) as to indemnity costs, Vanderbilt would be liable for [96] of the [732] months; and (3) Vanderbilt’s responsibility as to both defense and indemnity costs would be adjusted upward for any additional periods when there was a gap in coverage or an insolvent insurer. The court applied these same findings, principles, and allocation rules to underlying actions that alleged harms arising from nonasbestos particulates such as silica. Specifically, the court credited testimony that all of the underlying actions, whether on their face or through subsequent discovery or investigation, involved claims of exposure to asbestos.
‘‘In its Phase II decision, the court also considered the applicability of two types of exclusions contained in certain of Vanderbilt’s excess and umbrella policies. The court first addressed the claim by several secondary insurers that the pollution exclusion clauses contained in their policies barred coverage for the underlying actions. The court concluded that the relevant policy language was ambiguous as applied to the asbestos related claims and, therefore, that the exclusions did not preclude coverage. The court also addressed
‘‘Following the completion of the Phase II trial, Vanderbilt and several defendants filed appeals and cross appeals [with the Appellate Court], challenging approximately twenty of the court’s conclusions and findings.’’9 Id., 83. The Appellate Court subsequently issued an opinion of extraordinary complexity and comprehensiveness addressing a plethora of issues.10 With respect to the issues now before us in this certified appeal, the Appellate Court first concluded that the trial court properly adopted a ‘‘continuous trigger’’ theory of coverage for asbestos related disease claims as a matter of law and, accordingly, properly precluded the admission of expert testimony on current medical science regarding the actual timing of bodily injury from such disease. Id., 118–19. The Appellate Court further upheld the trial court’s adoption of an ‘‘unavailability of insurance’’ exception to the ‘‘time on the risk’’ rule of contract law, which provides for the pro rata allocation of defense costs and indemnity for asbestos related disease claims. Id., 143. The Appellate Court then interpreted the pollution exclusion clauses as applicable only to claims arising from ‘‘traditional environmental pollution,’’ rather than those arising from asbestos exposure in indoor working environments. Id., 252. Finally, the Appellate Court concluded that the trial court had improperly construed the occupational disease exclusions as ‘‘bar[ring] coverage only for occupational disease claims brought by a policyholder’s own employees and that the exclusions do not apply to complainants who developed occupational disease while using the policyholder’s products in the course of working for another employer.’’ Id., 256.
The Appellate Court rendered judgment reversing the decisions of the trial court ‘‘with respect to [its] determinations that (1) Vanderbilt is responsible for defense costs for the period of March 3, 1993 through April 24, 2007, (2) a default date of first exposure of January 1, 1962, applies to pending and future claims, and (3) the occupational disease exclusions in certain secondary policies apply only to claims brought by Vanderbilt’s own employees; the proper allocation methodology and the prospective application of that methodology are clarified as set forth herein . . . .’’ Id., 309. The Appellate Court then remanded the case to the trial court ‘‘for further proceedings consistent
I
We begin with the claims of the numerous insurer defendants in the certified appeals docketed as Docket Nos. SC 20000 and SC 20001. See footnote 2 of this opinion. Specifically, they contend that the Appellate Court improperly upheld the decision of the trial court (1) adopting a ‘‘continuous trigger’’ theory of coverage for asbestos related disease claims as a matter of law, (2) precluding expert testimony on current medical science regarding the actual timing of bodily injury from asbestos related diseases, and (3) adopting an ‘‘unavailability of insurance’’ exception to the ‘‘time on the risk’’ rule of contract law. The insurer defendants also claim that the Appellate Court improperly interpreted pollution exclusion clauses in certain insurance policies as applicable only to claims arising from ‘‘traditional environmental pollution,’’ rather than to those arising from asbestos exposure in indoor working environments.
After carefully examining the record on appeal and considering the briefs and arguments of the parties, we have concluded that the judgment of the Appellate Court should be affirmed with respect to these issues. The Appellate Court’s thorough and well reasoned opinion more than sufficiently addresses these certified questions, and there is no need for us to repeat the discussion contained therein. We therefore adopt parts III A, III B, and IV A of the Appellate Court’s opinion as the proper statement of the issues and the applicable law concerning those issues. See, e.g., Deutsche Bank AG v. Sebastian Holdings, Inc., 331 Conn. 379, 384, 204 A.3d 664 (2019); State v. Henderson, 330 Conn. 793, 799, 201 A.3d 389 (2019).
II
We next turn to Vanderbilt’s claim, in Docket No. SC 20003, that the Appellate Court incorrectly determined that occupational disease exclusion clauses in two excess policies apply to claims brought by nonemployees of Vanderbilt who allegedly developed an occupational disease while using Vanderbilt talc at any workplace. The Appellate Court’s opinion sets forth the following additional facts and procedural history relevant to this claim. ‘‘At trial, several of Vanderbilt’s secondary insurers [secondary insurers]11 either sought declaratory judgments determining or raised special defenses or claims alleging that occupational disease exclusions in their policies precluded coverage for some of the underlying actions. Two versions of the occupational disease exclusion, contained in policies issued by Cer-tain Underwriters at Lloyd’s, London (Lloyd’s), and Pacific Employers Insurance Company (Pacific), are at issue.12
‘‘The first policy at issue, Lloyd’s policy number 77/18503/1/PNB21250D, was in effect from May 17, 1977 through March 3, 1979. The policy contains an endorsement clause stating in relevant part that ‘this policy shall not apply . . . to personal injury (fatal or nonfatal) by occupational disease.’ Several other defendants issued secondary
‘‘The second policy at issue, Pacific policy number XMO017535 (NCA15), was in effect from March 3, 1985 through March 3, 1986. It contains the following endorsement clause: ‘This policy does not apply to any liability arising out of: Occupational Disease.’ National Casualty [Company (National Casualty)], [a secondary insurer that] has taken the lead in challenging the trial court’s rulings regarding the occupational disease exclusions, issued an excess policy, number XU000233, which follows form to the Pacific policy. Lloyd’s also issued an excess policy that follows form to the Pacific policy. None of the relevant policies defines the term ‘occupational disease.’
‘‘In addition to these occupational disease exclusions, the Lloyd’s and Pacific policies contain employers’ liability exclusions. The Lloyd’s policy provides that ‘this policy shall not apply . . . to the liability of employees.’ The Pacific policy provides that ‘[t]his policy does not apply to personal injury to any employee of the insured arising out of and in the course of his employment by the insured or to any obligation of the insured to indemnify another because of damages arising out of such injury.’ In addition, National Casualty’s excess policy, while following form to the Pacific policy, also includes its own ‘employers liability exclusion,’ which is somewhat broader than the one in the Pacific policy. It provides in relevant part: ‘[T]his policy shall not apply to any liability for bodily injury, sickness, disease, disability or shock, including death at any time resulting therefrom . . . sustained by any employee of the insured and arising out of and in the course of his employment by the insured.’ Last, both the Lloyd’s and Pacific policies contain exclusions for obligations for which the insured may be held liable under workers’ compensation, unemployment compensation, or disability benefits laws.
‘‘To facilitate the trial court’s resolution of the issue, the parties stipulated during the second phase of the trial that none of the claimants in the underlying actions [is] or ever [was a] Vanderbilt [employee]. The parties further stipulated that the underlying complaints fall into three categories: those that allege (1) exposure to Vanderbilt products solely through the workplace of another employer, (2) exposure both in and outside the workplace, and (3) exposure solely outside the workplace. Accordingly, if the occupational disease exclusions do apply to nonemployees of Vanderbilt, they likely will bar coverage for some but not all of the underlying complaints during the relevant policy years.14
‘‘In its Phase II decision, the trial court concluded that the occupational disease exclusions apply only to claims brought by Vanderbilt’s own employees. Because the
‘‘Because the court agreed with Vanderbilt that the occupational disease exclusions do not apply to any of the underlying claims, the court did not address Vanderbilt’s alternative arguments that (1) in the event that the policy language is determined to be ambiguous, the exclusions should be construed in favor of the insured pursuant to the doctrine of contra proferentem, and (2) certain of the defendants have waived their right to invoke the exclusions.’’ (Footnote added; footnote altered; footnotes in original.) R.T. Vanderbilt Co. v. Hartford Accident & Indemnity Co., supra, 171 Conn. App. 256–59.
On appeal, the Appellate Court disagreed with the trial court’s construction of the occupational disease exclusions, concluding instead that they ‘‘unambiguously bar coverage for occupational disease claims brought not only by employees of Vanderbilt but also by individuals who contracted an occupational disease in the course of their work for other employers.’’ (Foot-note omitted.) Id., 269–70. In concluding that the language of the exclusions was plain and unambiguous, the Appellate Court rejected Vanderbilt’s ‘‘primary argument,’’ namely, ‘‘that the term occupational disease is so interwoven with the concept of workers’ compensation and other claims by an employee against his employer as to be meaningless outside of that particular context.’’ (Internal quotation marks omitted.) Id., 262–63. The Appellate Court also observed that, when the policies were drafted ‘‘between the late 1970s and mid-1980s, ‘occupational disease’ had a common and ordinary meaning within the legal and insurance fields.’’15 Id., 263–64. The Appellate
On appeal, Vanderbilt claims that the Appellate Court improperly failed to limit the application of the occupational disease exclusions to claims brought against Vanderbilt by its own employees. Vanderbilt relies on case law and legal dictionaries; see, e.g., Ins. Co. of North America v. Forty-Eight Insulations, Inc., 451 F. Supp. 1230 (E.D. Mich. 1978), aff’d, 633 F.2d 1212 (6th Cir. 1980); Nolan v. Johns-Manville Asbestos & Magnesia Materials Co., 74 Ill. App. 3d 778, 392 N.E.2d 1352 (1979), aff’d, 85 Ill. 2d 161, 421 N.E.2d 864 (1981); Commercial Union Ins. Co. v. Porter Hayden Co., 116 Md. App. 605, 698 A.2d 1167, cert. denied, 348 Md. 205, 703 A.2d 147 (1997); Black’s Law Dictionary (5th Ed. 1979); and argues that the term ‘‘ ‘occupational disease’ is a term of art that refers only to disputes between [the] employer and [the] employee or to statutory compensation plans for employees.’’ Vanderbilt also contends that the Appellate Court’s interpretation of the term ‘‘occupational disease’’ is inconsistent with the longstanding rules by which we construe insurance policies and their exclusions, in particular that an insurer bears a heightened burden in proving the applicability of an exclusion and that ambiguous exclusions are construed in favor of the insured. Supported by the amicus curiae National Association of Manufacturers, Vanderbilt contends that the Appellate Court’s construction of the exclusion to the contrary ‘‘dramatically reduce[s] general liability coverage for manufacturers, particularly in the context of claims of disease resulting from alleged exposure to asbestos and other industrial products.’’
In response, National Casualty, leading the secondary insurers, argues that the occupational disease exclusions are plain and unambiguous. Citing, among other cases, Ricigliano v. Ideal Forging Corp., 280 Conn. 723, 912 A.2d 462 (2006), National Casualty contends that the phrase ‘‘occupational disease’’ has a plain meaning beyond the narrow workers’ compensation context insofar as ‘‘an ‘occupational disease’ is a disease arising from engaging in one’s occupation—if an employee develops a condition arising out of his or her employment, that employee has an ‘occupational disease,’ no matter where that employee works.’’ (Emphasis added.) Responding to Vanderbilt’s historical and contextual analysis of the term, National Casualty relies on TKK USA, Inc. v. Safety National Casualty Corp., 727 F.3d 782 (7th Cir. 2013), Rodriguez v. E.D. Construction, Inc., 126 Conn. App. 717, 12 A.3d 603, cert. denied, 301 Conn. 904, 17 A.3d 1046 (2011), Wyness v. Armstrong World Industries, Inc., 171 Ill. App. 3d 676, 525 N.E.2d 907 (1988), Tooey v. AK Steel Corp., 623 Pa. 60, 81 A.3d 851 (2013), and United National Ins. Co. v. J.H. France Refractories Co., 36 Pa. D. & C.4th 400, 409–10 (C.P. 1996), to contend that the meaning of the phrase ‘‘occupational disease’’ has not changed over time ‘‘from the pre-workers’ compensation era to the present’’; instead, only the remedies available for such illness
We begin with well established principles governing the interpretation of insurance policies. ‘‘[C]onstruction of a contract of insurance presents a question of law for the [trial] court which this court reviews de novo. . . . The determinative question is the intent of the parties, that is, what coverage the [insured] expected to receive and what the [insurer] was to provide, as disclosed by the provisions of the policy. . . . In evalu-
ating the expectations of the parties, we are mindful of the principle that provisions in insurance contracts must be construed as laymen would understand [them] and not according to the interpretation of sophisticated underwriters and that the policyholder’s expectations should be protected as long as they are objectively reasonable from the layman’s point of view. . . . [W]hen the words of an insurance contract are, without violence, susceptible of two [equally responsible] interpretations, that which will sustain the claim and cover the loss must, in preference, be adopted. . . . [T]his rule of construction favorable to the insured extends to exclusion clauses. . . . When construing exclusion clauses, the language should be construed in favor of the insured unless it has a high degree of certainty that the policy language clearly and unambiguously excludes the claim. . . . While the insured bears the burden of proving coverage, the insurer bears the burden of proving that an exclusion to coverage applies.’’ (Citations omitted; internal quotation marks omitted.) Nationwide Mutual Ins. Co. v. Pasiak, 327 Conn. 225, 238–39, 173 A.3d 888 (2017); see, e.g., Travelers Casualty & Surety Co. of America v. Netherlands Ins. Co., 312 Conn. 714, 740, 95 A.3d 1031 (2014) (‘‘[U]nambiguous terms are to be given their plain and ordinary meaning. . . . As with contracts generally, a provision in an insurance policy is ambiguous when it is reasonably susceptible to more than one reading.’’ [Internal quotation marks omitted.]). But see Travelers Casualty & Surety Co. of America v. Netherlands Ins. Co., supra, 740–41 (noting that contra proferentem rule does not apply in disputes between insurers). ‘‘[A]lthough policy exclusions are strictly construed in favor of the insured . . . the mere fact that the parties advance different interpretations of the language in question does not necessitate a conclusion that the language is ambiguous.’’ (Internal quotation marks omitted.) Liberty Mutual Ins. Co. v. Lone Star Industries, Inc., 290 Conn. 767, 796, 967 A.2d 1 (2009).
We begin with the language of the occupational disease exclusions at issue.
e.g., Lexington Ins. Co. v. Lexington Healthcare Group, Inc., 311 Conn. 29, 42 n.8, 84 A.3d 1167 (2014); R.T. Vanderbilt Co. v. Continental Casualty Co., 273 Conn. 448, 463, 870 A.2d 1048 (2005); Buell Industries, Inc. v. Greater New York Mutual Ins. Co., 259 Conn. 527, 539, 791 A.2d 489 (2002). The Random House Dictionary of the English Language Unabridged (1966) p. 996, defines ‘‘occupational disease’’ as synonymous with ‘‘industrial disease,’’ namely, ‘‘a disease caused by the conditions or hazards of a particular occupation.’’ Similarly, Webster’s Third New International Dictionary (1961) pp. 1560–61, defines ‘‘[o]ccupational disease’’ as ‘‘an illness caused by factors arising from one’s occupation <dermatitis is often an occupational disease> . . . .’’16 (Emphasis in original.)
Contemporaneous legal dictionaries contain similar general definitions of the term ‘‘occupational disease,’’17 along with specifically indicating the existence of a relationship between occupational diseases, as previously defined, and workers’ compensation statutory schemes. Notably, the fifth edition of Black’s Law Dictionary, published in 1979 and relied on heavily by Vanderbilt, defines ‘‘[o]ccupational disease’’ as ‘‘[a] disease (as black lung disease incurred by miners) resulting from exposure during employment to conditions or substances detrimental to health. Compensation for such is provided by state [workers’] compensation acts and such federal acts as the Black Lung Benefits Act. Impairment of health not caused by accident but by exposure to conditions arising out of or in the course of one’s employment.’’ (Emphasis added.) Black’s Law Dictionary (5th Ed. 1979) p. 973.
The Black’s Law Dictionary entry then goes on to explain that a ‘‘disease is compensable under [workers’] compensation statute as being an ‘occupational’ disease where: (1) the disease is contracted in the course of employment; (2) the disease is
read those definitions only to highlight the availability of workers’ compensation as a common, legal remedy for claims arising from the underlying condition. Thus, we disagree with Vanderbilt’s argument in its reply brief that ‘‘ ‘[o]ccupational [d]isease’ [is] a term of art that is tied to the employee-employer relationship,’’ thus meaning that ‘‘no specific reference to employees needed to be added to the exclusion.’’
Given the lack of any verbiage in commonly used dictionary definitions expressly limiting the definition of occupational disease to the workers’ compensation context,20 it is significant that the text of the
Indeed, to read the exclusions as urged by Vanderbilt would require us to add otherwise nonexistent language specifically limiting their application to Vanderbilt’s employees, which is contrary to how we interpret contracts, including insurance policies. See Moore v. Continental Casualty Co., 252 Conn. 405, 414, 746 A.2d 1252 (2000) (‘‘We cannot rewrite the insurance policy by adding semicolons any more than we can by adding words. If the policy had referred to ‘green vehicles,’ and defined that term as ‘green cars, trucks or motorcycles,’ it is unlikely that there would be a reasonable dispute about whether blue trucks and red motorcycles were intended to be included in the definition.’’); see also Travelers Ins. Co. v. Namerow, 257 Conn. 812, 827, 778 A.2d 168 (2001) (‘‘The language of the policy clearly does not contain the word ‘motive’ or any other analogous term. Under the language of the policy, the plaintiff did not need to prove motive as an element of its claim that the
Notes
any workmen’s compensation, unemployment compensation or disability benefits law, or under any similar law . . . .’’ A separate rider to the Pacific policy states that ‘‘[t]his policy does not apply to personal injury to any employee of the insured arising out of and in the course of his employment by the insured or to any obligation of the insured to indemnify another because of damages arising out of such injury.’’
The Lloyd’s policy provides that it ‘‘shall not apply . . . to any obligation for which the [a]ssured and any company as its insurer may be held liable under any [w]orkmen’s [c]ompensation, unemployment compensation or disability benefits law provided, however, that this exclusion does not apply to liability of others assumed by the [n]amed [a]ssured under contract or agreement . . . .’’
We similarly disagree with Vanderbilt’s reliance on Ins. Co. of North America v. Forty-Eight Insulations, Inc., supra, 451 F. Supp. 1230. In that insurance coverage case, the court declined to apply a manifestation trigger for the underlying product liability claim, deeming the common-law contracts principles distinguishable from the statutory ‘‘last employer’’ rule that governs coverage for workers’ compensation claims. Id., 1240–41. Again, this case does nothing to elucidate the meaning of the occupational disease exclusion, with the court’s failure to refer to the underlying claims as ‘‘occupational diseases’’ both unexplained, and in our view, purely incidental. Similarly, the court does not state in any way that occupational disease is a phrase with a distinct meaning in the context of workers’ compensation, as opposed to the common law.
The cases cited by National Casualty similarly do not interpret an occupational disease exclusion, and stand only for the proposition that a claim arising from an occupational disease may exist independently of a workers’ compensation claim. See TKK USA, Inc. v. Safety National Casualty Corp., supra, 727 F.3d 788–90 (common-law claim against employer for negligence is covered under employer’s liability coverage, even if underlying claim is statutorily barred by state occupational disease compensation statute, because of gaps in statute, and ‘‘covered loss’’ would include defense of even groundless claim); Rodriguez v. E.D. Construction, Inc., supra, 126 Conn. App. 728 (independent contractor was excluded from participation in workers’ compensation system); Wyness v. Armstrong World Industries, Inc., supra, 171 Ill. App. 3d 677 (surviving spouse of insulator who died from asbestos related lung cancer brought wrongful death action against manufacturers of insulation); Tooey v. AK Steel Corp., supra, 623 Pa. 82 (exclusivity provision of workers’ compensation act did not bar common-law action by employee against employer when occupational disease claim manifested beyond act’s limitation period); United National Ins. Co. v. J.H. France Refractories Co., supra, 36 Pa. D. & C.4th 409–10 (manufacturer fraudulently procured commercial general liability insurance despite knowledge of pending third-party product liability claims against it arising from asbestosis injuries).