{"id":897572,"date":"2020-06-10T11:24:41","date_gmt":"2020-06-10T17:24:41","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=897572"},"modified":"2020-06-10T11:24:43","modified_gmt":"2020-06-10T17:24:43","slug":"progressive-trigger-coverage-asbestos","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/progressive-trigger-coverage-asbestos\/","title":{"rendered":"Choice of Laws Test Mandates Application of California\u2019s Continuous and Progressive Trigger of Coverage to Asbestos Claims"},"content":{"rendered":"\n<p>Christopher Kendrick and Valerie A. Moore | <a rel=\"noreferrer noopener\" href=\"https:\/\/www.hbblaw.com\/choice-of-laws-test-mandates-application-of-californias-continuous-and-progressive-trigger-of-coverage-to-asbestos-claim\/\" target=\"_blank\">Haight Brown &amp; Bonesteel<\/a><\/p>\n\n\n\n<p>In\u00a0<em>Textron v. Travelers Casualty and Surety Co.<\/em>\u00a0(No. B262933, filed 2\/25\/20), a California appeals court held that the Restatement\u2019s choice of laws factors mandated application of California\u2019s continuous and <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/clarification-application-of-continuous-trigger-theory\/\" target=\"_blank\" rel=\"noreferrer noopener\">progressive trigger of coverage<\/a> to <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/garlock-lifting-veil-asbestos-trust-claims\/\" target=\"_blank\" rel=\"noreferrer noopener\">asbestos claims<\/a>, overcoming an argument that a manifestation trigger should apply under Rhode Island law.<\/p>\n\n\n\n<p>Travelers insured Textron from 1966 to 1987.&nbsp;In 2011, Textron was sued by a California resident, Esters, for damages caused by mesothelioma resulting from asbestos exposure in California.&nbsp;The action was defended and settled by Travelers and other insurers under reservations of rights.&nbsp;Textron sued Travelers in California for a declaration that Travelers owed duties to defend and indemnify the&nbsp;<em>Esters<\/em>&nbsp;action.&nbsp;Travelers cross-complained, seeking reimbursement.<\/p>\n\n\n\n<p>The case turned on choice of law for trigger of coverage as between California and Rhode Island.&nbsp;Citing&nbsp;<em>Montrose Chemical Corp. v. Admiral Ins. Co.<\/em>&nbsp;(1995) 10 Cal.4th 645 and&nbsp;<em>Armstrong World Industries, Inc. v. Aetna Casualty &amp; Surety Co.<\/em>&nbsp;(1996) 45 Cal.App.4th 1, the&nbsp;<em>Textron<\/em>&nbsp;court noted that California applies a continuous trigger to continuous or progressively deteriorating injury.&nbsp;By contrast, in Rhode Island a covered occurrence exists \u201cwhen the damage \u2026 manifests itself, \u2026 is discovered or, \u2026 in the exercise of reasonable diligence is discoverable.\u201d&nbsp;(Citing&nbsp;<em>Textron, Inc. v. Aetna Cas. and Sur. Co.<\/em>&nbsp;(R.I. 2002) 754 A.2d 742.)&nbsp;According to Travelers, the&nbsp;<em>Esters<\/em>&nbsp;action was not covered under Rhode Island law because the plaintiff\u2019s mesothelioma was not diagnosed until 2010, after Travelers was off the risk.<\/p>\n\n\n\n<p>Travelers\u2019 position was based on the fact that 24 years earlier, Textron had litigated in Rhode Island with its insurers, including Travelers, over coverage for environmental contamination lawsuits, some of them in California.&nbsp;That court applied Rhode Island law because:&nbsp;(1) Textron\u2019s principal place of business was in Rhode Island; (2) its risk management department was in Rhode Island; (3) the premiums were paid from Rhode Island; and (4) the insurance policies were delivered to Textron\u2019s principal place of business in Rhode Island.&nbsp;Based on that result, Travelers argued that Textron was collaterally and judicially estopped from arguing that California law controlled the trigger of coverage for the&nbsp;<em>Esters<\/em>&nbsp;action.<\/p>\n\n\n\n<p>Textron argued that California law applied to the&nbsp;<em>Esters<\/em>&nbsp;action because under Civil Code section 1646, a contract is to be interpreted in accordance with the law and usage of the place of its performance, which was California.&nbsp;(Citing&nbsp;<em>Frontier Oil Corp. v. RLI Ins. Co.<\/em>&nbsp;(2007) 153 Cal.App.4th 1436.)&nbsp;However, the trial court denied Textron\u2019s motion for summary judgment and granted summary judgment to Travelers, finding that Textron was estopped, because Textron successfully took a position in the Rhode Island action inconsistent with its position of seeking coverage for the&nbsp;<em>Esters<\/em>&nbsp;action.<\/p>\n\n\n\n<p>The appeals court reversed.&nbsp;The&nbsp;<em>Textron<\/em>&nbsp;court noted that collateral estoppel (or \u201cissue preclusion\u201d) prevents relitigation of previously decided issues (rather than causes of action), and only applies after:&nbsp;(1) final adjudication; (2) of an identical issue; (3) actually litigated and necessarily decided in the first suit; and (4) asserted against one who was a party in the first suit or one in privity with that party.&nbsp;(Citing&nbsp;<em>Samara v. Matar<\/em>&nbsp;(2018) 5 Cal.5th 322.)&nbsp;The&nbsp;<em>Textron<\/em>&nbsp;court stated that \u201cFor collateral estoppel to apply here, the key question is whether the identical issue was presented and decided between Textron and Travelers in the Rhode Island action.\u201d<\/p>\n\n\n\n<p>But the identical issue requirement was not met.&nbsp;The&nbsp;<em>Textron<\/em>&nbsp;court stated that, \u201cObviously, that specific issue\u2014which trigger rule should apply to the&nbsp;<em>Esters<\/em>&nbsp;action\u2014was not litigated and decided more than 24 years earlier in the Rhode Island action\u2026. And although the \u2018ultimate issue\u2019 or \u2018disposition\u2019\u2014giving interpretive meaning to the term \u2018occurrence\u2019 in the Travelers policies as applied to personal injury\u2014may be identical, that does not create an identity of issues for collateral estoppel.\u201d&nbsp;In particular, the&nbsp;<em>Textron<\/em>&nbsp;court identified five reasons why the earlier Rhode Island lawsuit was not dispositive:&nbsp;(1) the Rhode Island court could not have identified the specific conflict of law\u2014trigger of coverage for continuing or progressively deteriorating damage or injury\u2014because the Rhode Island ruling occurred in 1991, which was before 1995 when the California Supreme Court adopted the continuous trigger test in&nbsp;<em>Montrose<\/em>; (2) the 1991 case identified no California interests to be balanced against Rhode Island\u2019s interests; (3) the 1991 case involved environmental contamination and property damage, but no specific claims for personal injury; (4) the Rhode Island court conducted no analysis of California\u2019s interests in applying its law to personal injury occurrences in California; and (5) there are other choice of law principles, none of which were raised or considered in the Rhode Island action.<\/p>\n\n\n\n<p>The&nbsp;<em>Textron<\/em>&nbsp;court cited the Restatement, Second, of Conflict of Laws, section 188(2), for the controlling factors:&nbsp;(a) the place of contracting; (b) the place of negotiation of the contract; (c) the place of performance; (d) the location of the subject matter of the contract;, and (e) the domicile, residence, nationality, place of incorporation and place of business of the parties.&nbsp;The&nbsp;<em>Textron<\/em>&nbsp;court stated:&nbsp;\u201cThese contacts are to be evaluated according to their relative importance with respect to the particular issue.\u201d&nbsp;Further, \u201dWhere \u2026 a casualty insurance contract is in dispute, particular importance is placed on the location of the subject matter of the contract, i.e., the location of the insured risk.\u201d&nbsp;(Citing&nbsp;<em>Cunningham v. Equitable Life Assur.<\/em>&nbsp;(2d Cir. 1981) 652 F.2d 306.)&nbsp;The&nbsp;<em>Textron<\/em>&nbsp;court acknowledged that \u201cwhen construed by courts in different states applying each state\u2019s law, the same policy language may receive different construction and application in different jurisdictions.\u201d&nbsp;(Citing&nbsp;<em>Downey Venture v. LMI Ins. Co.<\/em>&nbsp;(1998) 66 Cal.App.4th 478.)<\/p>\n\n\n\n<p>The&nbsp;<em>Textron<\/em>&nbsp;court cited&nbsp;<em>Stonewall Surplus Lines Ins. Co. v. Johnson Controls, Inc.<\/em>&nbsp;(1993) 14 Cal.App.4th 637, for its application of the Restatement factors to conclude that for insurance not only is the principal location of the insured risk given particular emphasis, but that the State of California has an interest in protecting its residents against tortfeasors and protecting their right to indemnity for a claim:&nbsp;\u201cIt may be inferred that, as with the parties in&nbsp;<em>Stonewall<\/em>, the insured (Textron) and insurer (Travelers) \u2018reasonably expect[ed] not only that the [insured\u2019s] liability to a third party might be governed by the law of a state with significant interests at stake, but that [the insured\u2019s] right to indemnity for such a claim might also be governed by that state\u2019s law.\u2019\u201d&nbsp;The&nbsp;<em>Textron<\/em>&nbsp;court also stated that \u201cAs should be obvious based on our holding that collateral estoppel does not apply, judicial estoppel also does not apply.\u201d<\/p>\n\n\n\n<p>Having found that California\u2019s continuous and progressive trigger applied over Rhode Island\u2019s manifestation rule, the&nbsp;<em>Textron<\/em>&nbsp;court ultimately sent the matter back to the trial court, finding triable issues of fact existed regarding whether the plaintiff\u2019s claim, based on secondary exposure from her mother\u2019s employment by Textron, established an occurrence within the Travelers policy periods.<\/p>\n\n\n\n<p>This document is intended to provide you with information about insurance law related developments. The contents of this document are not intended to provide specific legal advice. If you have questions about the contents of this alert, please contact the authors. This communication may be considered advertising in some jurisdictions.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Christopher Kendrick and Valerie A. Moore | Haight Brown &amp; Bonesteel In\u00a0Textron v. Travelers Casualty and Surety Co.\u00a0(No. B262933, filed 2\/25\/20), a California appeals court held that the Restatement\u2019s choice of laws factors mandated application of California\u2019s continuous and progressive trigger of coverage to asbestos claims, overcoming an argument that a manifestation trigger should apply&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/progressive-trigger-coverage-asbestos\/\">Continue reading <span class=\"screen-reader-text\">Choice of Laws Test Mandates Application of California\u2019s Continuous and Progressive Trigger of Coverage to Asbestos Claims<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9914],"tags":[9895,11188,11187],"class_list":["post-897572","post","type-post","status-publish","format-standard","hentry","category-insurance-coverage","tag-advise-consult","tag-asbestos-claims","tag-progressive-trigger-of-coverage","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Choice of Laws Test Mandates Application of California\u2019s Continuous and Progressive Trigger of Coverage to Asbestos Claims - Advise &amp; 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