APPALACHIAN INSURANCE COMPANY v. [And a Third-Party Action]. (2005)

Supreme Court, Appellate Division, First Department, New York.

APPALACHIAN INSURANCE COMPANY, Plaintiff-Respondent, v. GENERAL ELECTRIC COMPANY, Defendant-Appellant, Riunione Adriatica DiSicurta, also known as Adriatic Insurance Company, et al., Defendants-Respondents, Aetna Casualty and Surety Company, etc., et al., Defendants. [And a Third-Party Action].

Decided: June 14, 2005

SAXE, J.P., MARLOW, SULLIVAN, WILLIAMS, GONZALEZ, JJ.

Pillsbury, Winthrop LLP, New York (E. Leo Milonas, David G. Keyko, Frederick A. Brodie, Laura L. Smith of counsel), Cleary, Gottlieb, Steen & Hamilton, New York (Evan A. Davis, Goldie Weixel of counsel), McCarter & English, LLP, New York (Gita F. Rothschild, R. Nicholas Gimbel of counsel), for General Electric Company, appellant. Smith, Stratton, Wise, Heher & Brennan, LLP, New York (Patrick J. Dwyer of counsel), Meckler, Bulger & Tilson, LLP, Chicago, IL (Scott M. Seaman, Jason R. Schulze of counsel), for Appalachian Insurance Company, respondent. Skadden, Arps, Slate, Meagher & Flom LLP, New York (Michael J. Balch of counsel), for North Star Reinsurance Corporation, respondent. Rivkin Radler, LLP, Summit, NJ (Brian R. Ade of counsel), for Federal Insurance Company, respondent. Morrison, Mahoney & Miller, LLP, New York (Dylan C. Braverman of counsel), for Swiss Reinsurance Company, respondent. Law Offices of Richard A. Fogel, P.C., Islip, NY (Richard A. Fogel of counsel), for Dairyland Insurance Company, respondent. Bonner, Kiernan, Trebach & Crociata, Parsippany, NJ (Alexander H. Gillespie of counsel), for Riunione Adriatica DiSicurta and Fireman's Fund Insurance Company, respondents. Ford, Marrin, Esposito, Witmeyer & Gleser, LLP, New York (Elizabeth M. DeCristofaro, Alfred L. D'Isernia of counsel), for Continental Casualty Company, Continental Insurance Company, as successor in interest to certain alleged Harbor Insurance Company policies, Fidelity & Casualty Company of New York and Pacific Insurance Company, respondents.

Order and judgment (one paper), Supreme Court, New York County (Ira Gammerman, J.), entered December 23, 2003, inter alia, declaring that certain of the excess insurers are not obligated to defend or indemnify the insured with respect to any single claim that does not exceed $5 million, unanimously affirmed, with costs.

Under the subject policies, the availability of excess coverage is triggered by an “occurrence,” defined as “an accident, event, happening or continuous or repeated exposure to conditions ․ which results in personal injury, sickness, disease or death.” For the purpose of determining the attachment point of the excess coverage, the motion court correctly held that such clause is not ambiguous; that the operative “occurrence” is the last link in the causal chain leading to liability, i.e., the exposure of each individual claimant to asbestos contained in the turbines manufactured by the insured, rather than earlier events creating the potential for future injury, i.e., the insured's design, manufacture and sale of the turbines without warnings about asbestos; and that, accordingly, individual claims could not be aggregated (see Metropolitan Life Ins. Co. v. Aetna Cas. & Sur. Co., 255 Conn. 295, 765 A.2d 891 [2001] ). We have considered the insured's other arguments and find them unavailing.

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