Posted In: Insurance Recovery
on April 23, 2020
The answer? It depends.
Insurers and policyholders have disputed the scope of coverage owed by insurers where multiple policies are triggered by continuous, progressive injuries as typically presented by asbestos and environmental claims for decades, resulting in a divergent body of case law across the nation adopting various methods of allocation under such circumstances. Ohio, of course, is an “all sums” state, which applies the rule that insurers are jointly and severally liable for “all sums” under historical commercial general liability policies. Goodyear Tire & Rubber Co. v. Aetna Cas. & Sur. Co., 95 Ohio St.3d 512 (2002). One of the reasons, although not the only reason, that courts apply “all sums” is that the coverage grant itself expressly states that the insurer will pay “all sums.”
Most modern liability policies, however, say that insurers will pay “those sums,” not “all sums.” Thus, insurers have frequently taken the position that the “all sums” rule does not apply to policies that agree to pay “those sums.” To date, few courts have passed on whether this terminology change requires a departure from a joint and several, “all sums” rule. But the Ohio Supreme Court recently answered this question in a case certified to it by the Northern District of Ohio. Lubrizol Advanced Materials, Inc. v. National Union Fire Ins. Co. of Pittsburgh, PA, et. al., Ohio Supreme Court Case No. 2018-1815. Brouse McDowell filed an amicus brief in support of Lubrizol’s position on behalf of a number of policyholders and a trade group.
In Lubrizol, National Union argued that Ohio’s “all sums” rule did not apply to its policies, among other reasons, because it agreed to pay “those sums” which, by definition, National Union asserted, is something less than “all sums.” In its April 23, 2020 Opinion, however, the Ohio Supreme Court refused to engage in a “hypertechnical grammar analysis to determine whether the phrase ‘those sums’ is always more limited than ‘all sums’ and would always lead to a different allocation” and the Court declined to “set a bright-line rule based merely on a party’s use of the word ‘those’ instead of ‘all’.” Rather, each policy must be considered along with the facts of the underlying case, keeping in mind the rules of policy construction requiring ambiguity to be construed in favor of coverage. In this case, Goodyear should still apply if Lubrizol is able to establish that the underlying claim constitutes a continuous, progressive injury rather than discrete, identifiable injuries as contended by National Union.
Thus, policyholders in Ohio can rest assured that the fact that their policy uses the term “those sums” instead of “all sums” does not preclude application of Ohio’s joint and several rule where the underlying claim represents a continuous, progressive injury. And given the lack of state supreme court authority on this issue across the nation, this victory is likely to be relied on by policyholders in other states to put this lingering issue to rest.
If you have any questions regarding this recent decision, or are in need of legal assistance in dealing with your own insurance policies, please contact the insurance recovery attorneys at Brouse McDowell.
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