Connecticut Supreme Court Affirms Continuous Trigger and Unavailability Exception, Makes First-In-The-Nation Law Regarding Occupational Disease Exclusion

Paul C. Fuener | K&L Gates | October 28, 2019


Earlier this month, the Connecticut Supreme Court (the “Supreme Court”) finally issued its long-anticipated ruling regarding the Connecticut Appellate Court’s (the “Appellate Court”) landmark 2017 decision in R.T. Vanderbilt v. Hartford Accident and Indemnity Co. (the “2017 Appellate Court Decision”). [1] The Supreme Court adopted in its entirety the Appellate Court’s policyholder-favorable decisions regarding the application of the continuous trigger theory to long-tail asbestos-related bodily injury claims, the application of the unavailability-of-insurance rule to allocation of liability for such claims, and the inapplicability of the qualified pollution exclusion to asbestos-related bodily injury claims.

The Supreme Court’s opinion also contained a potentially problematic ruling for policyholders. Ruling on an issue of national first impression, the Supreme Court held that an occupational disease exclusion in certain of the policyholder’s policies applied not only to claims brought by the policyholder’s own employees but also to all underlying claimants alleging that they suffer from an occupational disease, even if they were employed by others.

The Supreme Court’s Vanderbilt Decision

The Connecticut Supreme Court considered four issues on appeal from the 2017 Appellate Court Decision. [2] Three of those issues were raised by the defendant insurers: (1) whether the continuous trigger theory was properly applied to long-tail asbestos claims under Connecticut law, (2) whether the unavailability-of-insurance rule should be applied to allocation of liability under Connecticut law for long-tail liability claims, and (3) whether under Connecticut law the pollution exclusion applied only to traditional environmental pollution or more broadly to asbestos bodily injury claims. [3]

The policyholder raised the final issue on appeal: whether the occupational disease exclusion was limited to claims brought by the policyholder’s own employees or had broader application. [4]

Trigger, Allocation, and the Qualified Pollution Exclusion

In its 2017 Appellate Court Decision, the Appellate Court placed Connecticut among those jurisdictions that apply the continuous trigger theory to long-tail claims. The Appellate Court’s decision reasoned that this theory best reflected the medical particularities of long-tail asbestos claims and was therefore the most fair and efficient way to distribute costs. [5]

The Appellate Court also adopted the “unavailability-of-coverage” rule to augment Connecticut’s pro rata allocation theory for long-tail claims. Under this rule, no amounts are allocated to a policyholder for years when the policyholder was unable to purchase insurance for third-party asbestos-related bodily injury claims because such insurance was unavailable in the market. [6] In adopting the “unavailability-of-coverage” rule, the Appellate Court rejected the insurers’ attempt to include an “equitable exception” to the rule that would have made the rule inapplicable to periods during which a policyholder sold allegedly asbestos-containing products. It also rejected the insurers’ suggestion that the alleged availability of coverage for asbestos liabilities under “claims-made” policies should be factored into the question of whether coverage for asbestos-related bodily injury claims was “available” in the market. [7]

Finally, the Appellate Court held that the so-called “qualified” pollution exclusion (also referred to as the “sudden and accidental” pollution exclusion) only applied to traditional environmental pollution. [8] The Appellate Court reasoned that the meaning of “environmental pollution” was clear at the time the insurers drafted the exclusion and referred to traditional methods of environmental pollution, such as unintentional migration of a pollutant through a water source. [9] The Appellate Court held, therefore, that this exclusion does not apply to asbestos-related bodily injury claims. [10]

On appeal, the Supreme Court agreed with the Appellate Court’s reasoning and conclusions with respect to these three issues and adopted in full the Appellate Court’s discussion of them without further elaboration. [11]

The Occupational Disease Exclusion

In considering the scope of the occupational disease exclusion, the Supreme Court, after summarizing the discussion of the issue below, began by making an independent inquiry into the plain meaning of the term “occupational disease.” [12]

Looking first to the language of the exclusion in the relevant policies, the Supreme Court noted that neither defined the term “occupational disease,” thus requiring the court to turn to the plain meaning of the term when the policies were written. [13]

Citing an array of dictionaries and cases, the court found definitions such as “[a] disease caused by the condition or hazards of a particular occupation” [14] and “an illness caused by factors arising from one’s occupation.” [15] In light of these broad definitions, the Supreme Court rejected the policyholder’s argument that the term “occupational disease” belonged to the workers compensation domain and should therefore only apply in a workers compensation context to claims brought by the policyholder’s own employees. [16] The Supreme Court acknowledged that “the relationship between occupational disease and workers’ compensation is now a matter of black letter law….” [17] However, it found that:

the definitions on which Vanderbilt relies — including the definition in Black’s Law Dictionary — [do not] suggest[] in any way that the phrase “occupational disease” is a construct devoid of meaning outside the law of workers’ compensation, notwithstanding its obvious significance within that area of the law. Instead, we read those definitions only to highlight the availability of workers’ compensation as a common, legal remedy for claims arising from the underlying condition. [18]

The Supreme Court also found it significant that the relevant exclusions themselves, like the general definitions of “occupational disease” that it had considered, did not contain an express limitation to the policyholder’s own employees. [19] The Supreme Court contrasted the language of the relevant exclusions with that of certain other exclusions contained in the relevant policies that did expressly limit the exclusion’s scope, noting that “when the drafters of the policy desired to limit the application of an exclusion to a certain group of individuals, they did so.” [20]

The Supreme Court then rejected the policyholder’s argument that the relevant exclusions were ambiguous in the absence of limiting language. [21] It also held that the policyholder’s preferred interpretation would require adding nonexistent limiting language in violation of bedrock principles of contract interpretation. [22]

The Supreme Court also disagreed with the policyholder’s argument that a reference to “occupational diseases sustained by any employee of the assured” in the body of one of the relevant policies limited the scope of the occupational disease exclusion in that policy, which was found in an endorsement. [23] The Supreme Court held that this reference did not constitute a generally applicable definition of “occupational disease” and so was irrelevant to interpreting the scope of the exclusion found in an endorsement. [24]

Finally, the Supreme Court addressed the policyholder’s argument that interpreting the occupational disease exclusion without an own-employees limitation would render the relevant policies’ liability coverage meaningless. [25] The Supreme Court found this argument “tempting” but ultimately held that the facts in the record undercut its applicability to the case at bar. [26] In Vanderbilt, the parties had stipulated below that the underlying claims were all brought entirely by claimants who were not the policyholder’s own employees, and those claims could be classified into three categories: claims arising from workplace exposure, claims arising from both workplace and nonworkplace exposure, and entirely nonworkplace exposure claims. [27] The Supreme Court held that its interpretation of the occupational disease exclusion did not render the relevant policies’ liability coverage meaningless in these circumstances, since that interpretation did not affect coverage for claims in the second and third category. [28] Moreover, the Supreme Court noted that even a significant exclusion limiting available coverage does not mean that the insured did not get the coverage for which it bargained or that the “insurance policies are rendered meaningless by virtue of the denial of coverage.” [29]

In light of all these reasons, the Supreme Court concluded that the occupational disease exclusion was clear and unambiguous, and it applies to occupational disease claims brought by both a policyholder’s own employees and other individuals who contract occupational disease in the course of work for other employers. [30]

Notably, in explaining the import of is decision, the Supreme Court did acknowledge that although a “disease might well have been contracted during [the underlying claimant’s] employment, that fact does not, without more, render it occupational in nature.” [31] Although the Supreme Court did not describe in detail what was needed to render a disease “occupational in nature,” it did suggest that the relevant employment had to be in “an industry that had peculiar incidence of diseases occasioned by exposure to [whatever the underlying claimant was allegedly exposed to].” [32]


Policyholders facing third-party long-tail liabilities whose general liability policies may be governed by Connecticut law should take heart that Connecticut has now joined those jurisdictions applying the continuous trigger theory and the unavailability-of-coverage rule. The Supreme Court’s Vanderbilt opinion also brings Connecticut into the majority of jurisdictions that properly interpret the qualified pollution exclusion as having no application outside the realm of traditional environmental pollution.

However, policyholders also should carefully review their policies for any “occupational disease” exclusionary language, particularly if those policies may be governed by Connecticut law. Policyholders that are uncertain as to whether Connecticut law may apply to the interpretation of their policies may wish to seek advice from coverage counsel regarding the applicable choice of law and the potential implications of Vanderbilt to their general liability insurance program. While a general “occupational disease” exclusion of the kind at issue in Vanderbilt may not be widely found in general liability policies, Vanderbilt may embolden insurers nationally whose policies contain similar provisions to attempt to raise new coverage defenses to escape their coverage obligations for toxic tort claims. Policyholders should carefully evaluate any attempts by their insurers to raise previously unasserted “occupational disease” exclusions.

Claims for Negligence? Duty to Defend Triggered

Michael S. Levine | Hunton Andrews Kurth | June 19, 2019

On June 17, 2019, the First Circuit held that an insurer’s duty to defend was triggered because the underlying complaint set forth claims that required a showing of intent as well as claims that sought recovery for conduct that “fits comfortably within the definition of an ‘accident.’” In Zurich American Ins. Co v. Electricity Maine, LLC, Zurich sought declaratory judgment that, under a D&O policy, it had no duty to defend the insured, Electricity Maine, an electrical utility company being sued in the underlying class action. Zurich argued it had no duty to defend because the underlying complaint failed to allege that Electricity Maine engaged in conduct that qualified as an “occurrence” or that caused “bodily injury” under the terms of the policy. The First Circuit disagreed.

The D&O policy stated that Zurich “has a duty to defend Electricity Maine against any lawsuit that seeks damages for ‘bodily injury’ caused by an ‘occurrence.’” The policy defined an “occurrence” as “an accident . . .” and under Maine law an accident is “commonly understood to mean . . . an event that takes place without one’s forethought or expectation . . . .” The Court held that, because the underlying complaint asserted claims for negligence and negligent misrepresentation, in addition to intentional torts, the conduct upon which recovery was sought fell within the definition of an “accident” and therefore qualified as an “occurrence” triggering the duty to defend. Second, the Court held that, although the underlying complaint did not allege that Electricity Maine’s conduct caused “bodily injury,” the complaint did not need to do so to fall within the risk insured and trigger a duty to defend. Instead, because the alleged conduct could result in bodily injury due to emotional distress, the allegations fell within the risk insured and Zurich has a duty to defend.

Alarm Cries Wolf in California Case Involving Privette Doctrine

Garret Murai | California Construction Law Blog | April 17, 2019

It’s one of the most quoted phrases in legal history: “Shouting fire in a [crowded] theater.”

It comes from the U.S. Supreme Court’s landmark 1919 decision in Schenck v. U.S. and has come to stand for the proposition that not all speech, in particular dangerous speech, is protected by the First Amendment.

The next case also involves a false alarm. But not of the First Amendment kind.

In Johnson v. The Raytheon Company, Inc., California Court of Appeal for the Second District, Case No. B281411 (March 8, 2019), a false alarm investigated by maintenance engineering staff led to a Privette Doctrine claim against a property owner when a ladder on which the maintenance staff was standing slipped on wet flooring.

Johnson v. Raytheon

Lawrence Johnson worked as a maintenance engineer for ABM Facilities Services, Inc. ABM was hired by Raytheon Company, Inc. to staff the control room at one of Raytheon’s facilities in Southern California. Among other things, control room staff monitored water cooling towers owned by Raytheon to ensure that the water in the cooling towers were maintained at minimum levels.

Johnson worked the graveyard shift. At 2:50 a.m. on February 20, 2013, Johnson received a low water level alarm. He called his supervisor who, as one might expect someone to do when awakened at 3:00 a.m. in the morning,  told Johnson to do whatever he thought he should do.  In other words, Johnson was alone.

At the time, Raytheon was undergoing a renovation project involving the removal and replacement of its water towers. System XT was the general contractor on the project, and two of its subcontractors, Brownco Construction Company, Inc. and Power Edge Solutions, Inc., were responsible for concrete work and the installation of electronic monitoring, respectively.

Johnson, unable to resolve the alarm, walked outside to the water tower in question where he saw an extension ladder left by Brownco leaning against the cooling tower wall. The cooling tower used to have a platform ladder for access but it had been removed during the renovations. Oh, and also, it had been raining, so the ground was wet.

I know what you’re thinking. It’s like the scene in pretty much any horror movie where the creepy music cues and you’re nearly yelling at the screen, “don’t open that door!,” or in this case, “don’t climb that ladder!” Well, we all know what happens next.

Johnson climbed the ladder even though (camera pan in) there was a sign on the ladder in all capital letters stating “CAUTION” and “THIS LADDER SECTION IS NOT DESIGNED FOR SEPARATE USE.” Because it was dark, Johnson didn’t see the warning.

Johnson made his way up the ladder. When he took a look over the 8-foot wall of the cooling tower … wait for it … there was no problem with the water level. However, as he made his way down the ladder, it slid, causing Johnson to come tumbling down on top of the ladder where he sustained serious injuries.

An investigation conducted after the accident revealed that the water level sensor installed by Power Edge had corroded and had to be replaced. That’s luck for you.

Johnson later sued Raytheon and Systems XT, alleging that Raytheon was liable because it retained control of the premises and that Systems XT ,as the general contractor, was liable for: (1) Power Edge’s failure to properly install the water level sensor to prevent it from becoming corroded; and (2) Brownco’s negligence in leaving its ladder out rather than putting it away.  Both Raytheon and Systems XT filed motions for summary judgment, which were granted by the trial court, and Johnson appealed.

The Appeal

On appeal, the 2nd District Court of Appeal noted that the Privette Doctrine, named after the case in which it was first elucidated, Privette v. Superior Court (1993) 5 Cal.4th 689, stands for the general principal that “a hirer of an independent contractor was not liable for the negligence of the independent contractor.”

However, also noted the Court, the Privette Doctrine has given way to several exceptions including the following:

  1. Negligent Exercise of Retained Control: Under the negligent exercise of retained control exception, a hirer is liable for injuries sustained by an employee of an independent contractor if: (1) the hirer retains control over any part of the work; (2) the hirer negligently exercises that control; and (3) the hirer does so in a manner that affirmatively contributes to the employee’s injury.” Hooker v. Department of Transportation (2002) 27 Cal.4th 198.
  2. Hazardous Conditions on Property: Under the hazardous conditions on property exception, a hirer is liable for injuries sustained by an employee of an independent contractor if: ” [(1)] the landowner knew, or should have known, of a latent or concealed preexisting hazardous condition on its property, [(2)] the contractor did not know and could not have reasonably discovered this hazardous condition, and [(3)] the landowner failed to warn the contractor about this condition.” Kinsman v. Unocal Corp. (2005) 37 Cal.4th 659.

Raytheon Was Not Liable Under Hooker

The Court of Appeal, focusing on the third factor of the negligent exercise of retained control exception, whether the hirer “affirmatively contribute[d]” to the employee’s injury, held that Johnson had failed to show that Raytheon affirmatively contributed to his injuries because the evidence presented to the trial court was that Raytheon provided ABM employees with access to numerous other safe ladders that Johnson did not choose to use on the night in question:

After Raytheon pointed out the availability of other ladders in its respondent’s brief, Johnson argued, in reply, that he had believed the ladder he found at the wall had been left by Raytheon, so had assumed it was safe, and that the area was not sufficiently well lit for him to have appreciated the danger posed by the partial extension ladder. While these arguments go some way to explaining why Johnson chose to use the partial extension ladder he discovered at the wall, they do not raise a triable issue of fact as to Raytheon’s affirmative contribution to his injury. Raytheon did not represent that the partial extension ladder was a safe replacement for the platform ladder, nor did Raytheon promise to provide ABM employees with light fixtures at the water cooling tower – and Johnson cannot suggest for the first time in its reply brief on appeal that it did.

Raytheon Was Not Liable Under Kinsman

The Court of Appeal, focusing on the second factor of the hazardous conditions on property exception, that the contractor did not know and could not have “reasonably discovered” the hazardous condition, held that Johnson could have reasonably discovered the hazard posed by the partial extension ladder by simply inspecting the ladder, and, once discovered, could have avoided the injury by using a different and safer ladder:

As we have discussed above in connection with the Hooker exception, it is undisputed that there were A-frame ladders available to Johnson. Thus, if the Brownco partial extension ladder were to be considered an obvious hazard, it cannot give rise to Raytheon’s liability because knowledge of the hazard is not inadequate to prevent injury. Anyone with actual knowledge of the hazardous could have avoided it by obtaining an A-frame ladder instead.

In other words, Johnson should have read the warning signs on the ladder.

Systems XT Was Not Liable For Negligence

Johnson’s claim against Systems XT was for negligence rather than an exception to the Privette Doctrine. Negligence, explained the Court of Appeals, involves the following: “(1) a legal duty to use due care; (2) a breach of that duty; and (3) the breach as the proximate or legal cause of the resulting injury.”

Johnson alleged that Systems XT breached two duties, namely, that Systems XT failed to ensure that Power Edge installed a water level sensor that would not create false alarms and  that System XT failed to ensure that Brownco safely secure its equipment including the partial extension ladder.

However, explained the Court of Appeals, while Johnson supported his allegation with contractual provisions contained in the various contracts and subcontracts between the parties, including a statement of work stating that the water cooling plant “must be a 24 x 7 ‘Fail-Safe’ operation,” general provisions providing that “contractors are responsible for keeping their work areas orderly and neat . . and free of . . . hazardous,” as well as specific provisions concerning ladders, which provided that “[w]hen not in use, store the ladder in an appropriate storage place,” Johnson had not shown that any of these contractual provisions created a duty owed by Systems XT to Johnson as a third-party beneficiary under these contractual provisions.


Johnson is an interesting case for reasons I think might surprise you. I believe the facts and law could have been interpreted and applied differently, fairly easily, by a different court. Instead of “Johnson should have just read the dang warning signs on the ladder,” I could see another court finding that the ladder shouldn’t have been there in the first place, and because the cooling towers were still “on line” Raytheon should have provided some means to provide safe access to them (after all, they had a platform ladder at one time, ostensibly for this very purpose). I could also see another court finding that  Systems XT did in fact breach a duty to Johnson because the safety provisions in the contracts was not intended to benefit some amorphous entity (i.e., Raytheon),  but among others, the employees of Raytheon who were working alongside an ongoing construction project.

But here’s the thing. It wasn’t another court. It was the 2nd District Court of Appeals. And in the last few years, the 2nd District Court of Appeals has come out with decisions scaling back exceptions to the Privette Doctrine, including last year’s Delgadillo v. Television Center, Inc. (2018) 20 Cal.App.5th 1078 case, and Khosh v. Staples Construction Company, Inc. (2016) 4 Cal.App.5th 712 case decided two years earlier.

Perhaps we have an appellate court split in the making?

Sox Are ‘Slippery When Wet’: Contractor May be Liable for Injury Caused by Work Installed According to Customer Specifications

Amandeep S. Kahlon | Bradley Arant Boult Cummings LLP | March 21, 2019

An Illinois appellate court recently addressed the scope of negligence liability for a slip and fall injury on a newly installed roof at the Chicago White Sox Stadium. In 2013, a maintenance employee slipped on the roof at the stadium and suffered severe muscle tears. The employee filed suit alleging negligence and strict liability against the White Sox, the roofing contractor, and the manufacturer of the roofing product. All three defendants moved for and were granted summary judgment by the trial court, and the employee appealed.

On appeal, the manufacturer argued that it owed no duty of care to the employee and, regardless, had provided sufficient warning to its immediate vendee, the contractor, so as to relieve the manufacturer of any liability. The contractor argued that it owed no duty of care to the plaintiff because it relied on the customer’s specifications and performed the work in accordance with the specifications.

After reviewing the manufacturer warnings, the appellate court agreed that the manufacturer had provided adequate warnings to the contractor regarding use of its roofing product and affirmed summary judgment in favor of the manufacturer. However, the appellate court reversed the trial court’s grant of summary judgment with respect to the White Sox and the contractor. Although the contractor cited past Illinois rulings that relieved contractors from liability to third parties when contractors followed the plans, specifications and instructions provided by an owner, the appellate court here found that the contractor still owed a duty of care to third parties. The court reasoned that, because the White Sox sought the contractor’s “expertise, advice, and direction” to make recommendations regarding roofing materials and necessary safety equipment, the contractor was not just “blindly replicat[ing]” specifications and plans.

The court was particularly persuaded by evidence that the White Sox and contractor negotiated the contract over several iterations and meetings. Unlike a traditional design-bid-build work scenario, the contractor had input on the specifications, plans and materials to be used in the construction of the roof, not unlike a design-build project.

The court’s decision places the contractor in a precarious position, where it may be held accountable for an injury to a third party, despite following its customer’s plans and specifications. Contractors, especially those involved in negotiated private work and, in particular, those performing construction manager roles with input into design and constructability decisions, should be mindful of the Illinois court’s decision and the implications the decision may have on future claims. A careful contractor can do several things to mitigate the risk of liability to third-party plaintiffs such as the White Sox employee in this case:

  1. pass on any manufacturer warnings explicitly to the owner;
  2. expressly disclaim liability for defective specifications or plans and seek indemnity from the owner for the same; and
  3. evaluate, during negotiations, the potential unintended consequences of recommending different materials, equipment or systems, especially if the recommended alternatives are to satisfy a demanding customer’s price concerns.

Minnesota Court Allows Punitive Damages Claim Against Contractor

Nicholas A. Loyal | Stinson Leonard Street | February 21, 2019

Punitive damages in construction cases are rare, but the Minnesota Court of Appeals recently allowed a driver to seek punitive damages after he was injured by debris falling from a construction company’s truck. The court’s decision provides a framework for punitive damage claims to proceed against contractors and serves as a cautionary tale for those who are involved in the construction industry.

In Carney Lien v. Casper Construction Inc., et al., a driver was hurt when a rock fell off of a dump truck hauling gravel from a pit to a construction site, broke through his windshield, and caused major injuries. After settling with the trucking company and the gravel pit, the driver went to trial against Veit & Company, which was responsible for supplying the gravel being hauled.

At trial, Veit argued that the injury was the result of a “freak accident,” while the driver argued that Veit was filling dump trucks dangerously full—so much so that rocks were falling off the top and sides of its trucks as they drove away. The injured driver produced testimony from eyewitnesses to the accident, as well as truck drivers on the project who testified that the trucks were being consistently overloaded. The jury found for the driver, and awarded $4,754,973.67 in compensatory damages.

Generally, in order to obtain punitive damages under Minnesota law, the party seeking damages must provide evidence that clearly and convincingly shows a “deliberate disregard for the rights or safety of others.” Minn. Stat. § 549.191 et seq. That standard is met if the evidence shows that the offending party “has knowledge of facts or intentionally disregards facts that create a high probability of injury to the rights or safety of others” and either deliberately proceeds to act with indifference or conscious disregard of that probability for injury. Id. at subd. 1(b). If awarded, punitive damages can greatly exceed the actual damages sought by a plaintiff in a lawsuit, as they are designed to punish an offending party to such a degree that the wrongdoing is not repeated.

In Carney Lien, the injured driver sought punitive damages after the verdict based on affidavits from five truck drivers working on the project asserting that Veit not only overloaded its dump trucks, but that it continued to do so despite complaints about the safety of this practice. While the district court denied the motion and struck the claim for punitive damages, the court of appeals reversed, finding that the district court abused its discretion by improperly weighing the evidence presented. As a result, the court of appeals remanded the case to the district court for further consideration of whether punitive damages were proper.

While it remains to be seen what the ultimate resolution of the punitive damages issue will be at the district court level, the court of appeals opened the door for claims seeking punitive damages by providing a framework for the type of damages needed to support such a claim. Specifically, if an injured party can present evidence establishing that a contractor is knowingly acting in a manner that could be detrimental to public safety, the contractor could face punitive damages for any injuries resulting from that action.

Obviously, construction companies should not knowingly act in a dangerous manner or disregard potential harm to public safety. However, in this case, the truck driver himself had a responsibility to secure his load and not allow his truck to be overfilled. To hold the excavator responsible for enormous damages resulting from such an accident creates the potential for extending punitive damages beyond their traditional limits.