Garcia-Mir v. Smith

Sepco Corporation, an Alabama company, manufactured asbestos insulation products between 1970 and 1979. Its general liability insurance coverage during that time and until the filing of this suit consisted of a series of successive policies, each of which was issued by one of several carriers. A defendant in hundreds of recent lawsuits seeking recovery for asbestos-related illnesses, Sepco has called upon these carriers to defend the suits and to pay any resulting liabilities. One of those insurers, Commercial Union Insurance Company, filed this suit, seeking a declaration that it is not obligated to defend or pay any claim based upon an asbestos-related illness that failed to become manifest while a Commercial Union policy was in effect. See Eagle-Picher Industries, Inc. v. Liberty Mutual Insurance Co., 682 F.2d 12, 19-20 (1st Cir.1982), cert. denied, 460 U.S. 1028, 103 S. Ct. 1279, 75 L. Ed. 2d 500, 103 S. Ct. 1280 (1983). Sepco counterclaimed and impleaded the other companies that had provided its primary liability insurance coverage since 1970. These insurers argued before the district court that insurance coverage under a particular policy should be triggered by the exposure of the plaintiff victim to asbestos hazards during the policy period rather than by the manifestation of the subsequent illness during the policy period. Ducre v. Executive Officers of Halter Marine, Inc., 752 F.2d 976, 994 (5th Cir.1985); Porter v. American Optical Corp., 641 F.2d 1128, 1145 (5th Cir.) (approving and adopting Insurance Co. of North America v. Forty-Eight Insulations, Inc., 633 F.2d 1212, 1226 (6th Cir.1980), cert. denied, 454 U.S. 1109, 102 S. Ct. 686, 70 L. Ed. 2d 650 (1981)), cert. denied, 454 U.S. 1109, 102 S. Ct. 1649, 71 L. Ed. 2d 878 (1981). Sepco offered still a third theory: each insurer on the risk at any time between the initial exposure and the manifestation of the disease should be liable to Sepco for indemnification and defense costs. See Keene Corp. v. Insurance Co. of North America, 215 U.S. App. D.C. 156, 667 F.2d 1034, 1047 (D.C.Cir.1981), cert. denied, 455 U.S. 1007, 102 S. Ct. 1644, 71 L. Ed. 2d 875, 102 S. Ct. 1645 (1982). Sepco alternatively supported adoption of the exposure theory.