{"id":900343,"date":"2022-09-08T15:42:26","date_gmt":"2022-09-08T21:42:26","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=900343"},"modified":"2022-09-08T15:42:28","modified_gmt":"2022-09-08T21:42:28","slug":"lead-paint-litigation-coverage-questions","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/lead-paint-litigation-coverage-questions\/","title":{"rendered":"Lead Paint Litigation Raises Coverage Questions for Policyholders"},"content":{"rendered":"\n

Robert Tugander | Rivkin Radler<\/a><\/p>\n\n\n\n

State and local governments have been pursuing \u201cpublic nuisance\u201d claims against companies responsible in some way for societal problems. We\u2019ve seen cases against manufacturers and distributors of guns, lead paint<\/a> and opioids. And this theory is being tested in climate change cases against energy companies.<\/p>\n\n\n\n

As new legal theories and trends emerge, so do insurance cases addressing coverage for those liabilities. A recent California decision tackles one issue: Is a public nuisance claim based on the willful acts of the insured\u2019s predecessor barred from coverage?<\/p>\n\n\n\n

The case\u2014Certain Underwriters at Lloyd\u2019s London v. ConAgra Grocery Products Co<\/em>.\u2014addresses California Insurance Code Section 533. That law says an insurer is not liable for a loss caused by the policyholder\u2019s willful act. The ruling derives from a California statute, but the court\u2019s reasoning can be applied to similar disputes elsewhere involving \u201cexpected or intended\u201d policy language.<\/p>\n\n\n\n

ConAgra was one of several paint manufacturers accused of creating a public health crisis by promoting the use of lead paint for interior use despite knowing that lead was hazardous to humans. After a trial, ConAgra was ordered to pay into a lead paint abatement fund.<\/p>\n\n\n\n

ConAgra itself did not promote lead paint for interior use. But its predecessor, W.P. Fuller & Co., did. And evidence showed the Fuller knew that using lead paint indoors would likely harm children.<\/p>\n\n\n\n

The coverage dispute centered on whether Fuller\u2019s knowledge could be imputed to ConAgra and whether the findings in the underlying case were sufficient to meet the willfulness standard under Section 533.<\/p>\n\n\n\n

ConAgra argued that Section 533\u2019s deterrence policy didn\u2019t apply to it, an innocent insured on the hook for a predecessor\u2019s conduct over which it had no control. It analogized to vicarious liability cases that allowed innocent insureds to be indemnified for the wrongful acts of others. But the court disagreed that the successor\u2019s knowledge mattered. ConAgra became liable for the public nuisance that Fuller caused, and thus stood in Fuller\u2019s shoes for purposes of Section 533.<\/p>\n\n\n\n

With Fuller\u2019s knowledge imputed to it, ConAgra proffered two reasons why Section 533\u2019s willful standard wasn\u2019t met. The court rejected both.<\/p>\n\n\n\n

The first rested on causation. ConAgra contended that Section 533 required a direct causal relationship and a close temporal connection between the willful act and the loss. As Fuller\u2019s conduct happened decades ago, the loss was too attenuated from Fuller\u2019s lead paint promotions. The court disagreed, finding that Section 533 applies whenever the loss is caused by a willful act. Fuller\u2019s willful conduct was adjudged to be a substantial factor in creating a public nuisance; there\u2019s no reason why Section 533 should not apply.<\/p>\n\n\n\n

ConAgra next argued that Section 533 applies only if it was shown that Fuller\u2019s high-level managers knew of the hazards. Again, the court was unpersuaded. It was established that Fuller, the corporate entity, knew that lead paint was highly likely to cause harm when it promoted it for residential use. This was enough to trigger Section 533\u2019s prohibition against insurance coverage.<\/p>\n\n\n\n

The point here is straightforward. Policyholders in the cross hairs of public nuisance litigation should not expect to be bailed out by their insurers. This is so, even where an insured\u2019s liability arises solely from the deliberate acts of its corporate predecessor.<\/p>\n\n\n\n

\n\n\n\n

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Robert Tugander | Rivkin Radler State and local governments have been pursuing \u201cpublic nuisance\u201d claims against companies responsible in some way for societal problems. We\u2019ve seen cases against manufacturers and distributors of guns, lead paint and opioids. And this theory is being tested in climate change cases against energy companies. As new legal theories and… Continue reading Lead Paint Litigation Raises Coverage Questions for Policyholders<\/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":[10721],"tags":[9895,23,50],"class_list":["post-900343","post","type-post","status-publish","format-standard","hentry","category-insurance","tag-advise-consult","tag-insurance-coverage","tag-lead-paint","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nLead Paint Litigation Raises Coverage Questions for Policyholders - 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