Phila. judge urges upholding of ruling in insurance case arising out of asbestos claim

A Philadelphia judge is urging a state appeals panel to affirm her decision to grant

summary judgment to an insurance company in a case in which beer maker Anheuser-Busch sued the insurer over a decision not to indemnify the company for asbestos injury claims brought forth by a former brewery worker.

On Nov. 1, Philadelphia Common Pleas Court Judge Patricia A. McInerney granted a motion for summary judgment that had been filed by the Insurance Company of North America in the case initiated by Anheuser-Busch.

The beer company had claimed that the insurer had breached its contract with the plaintiff by refusing to indemnify Anheuser-Busch for the defense costs and settlement paid to Missouri resident Pete Seper and his wife, Merle June Seper.

The Sepers filed suit against Anheuser-Busch in the spring of 2008 over allegations that Pete Seper sustained injuries from continuously being exposed to asbestos at the company’s St. Louis brewery from 1948 to 1982.

Pete Seper retired in 1982 and passed away after settling his claim with Anheuser-Busch years later, court papers state.

Anheuser-Busch put the insurer on notice in the summer of 2008 of the underlying Seper action at INA’s New York location, and the following summer the insurer denied coverage to Anheuser-Busch for the Seper claim because the former employee’s lawsuit was not filed within 36 months of the July 1, 1982, expiration of the insurance policy, the Pennsylvania Record previously reported.

The insurer finally agreed to defend Anheuser-Busch under the excess liability policy, and in late October 2009 the beer company settled the injury suit with the Sepers for $1 million, the record shows.

About a week later, however, INA denied coverage under the excess liability policy over claims that the policy was not required to respond until Anheuser-Busch paid $100,000 retention for each of the 30 years that Seper alleged he was exposed to asbestos.

Anheuser-Busch subsequently filed suit against INA in early March 2011 alleging breach of contract and bad faith.

On Nov. 1, Judge McInerney granted summary judgment to INA, writing in her opinion that the facts of the record demonstrated that the insurance policy was sent from the insurer’s New York office to the beer company’s broker in New York.

Other than the insurer being a Pennsylvania company, the judge wrote no further contacts between the parties had occurred in the commonwealth.

“Having determined that the applicable choice of law is New York and upon a clear reading of the policy, INA does not owe Anheuser-Busch a duty to indemnify,” McInerney wrote at the time.

On Jan. 3, McInerney filed an opinion at Common Pleas Court in which she urged the state Superior Court to uphold her decision to grant INA summary judgment in the case.

The judge wrote that the facts of record demonstrate that the choice forum was New York, not Pennsylvania.

“After reviewing all of the contacts and weighing them qualitatively, it was clear that the New York contacts were the center of this transaction,” McInerney wrote. “Other than INA being a Pennsylvania company, there were no further contacts with Pennsylvania. On the other hand, the insurance policy was negotiated, contracted and the premium was paid in New York. In light of the forgoing, the applicable choice of law was New York.”

McInerney also wrote that the insurance policy’s excess liability coverage provided for within the 1981-82 policy was not triggered because the damages were allocated over the three-decade span in which Pete Seper’s alleged injuries occurred.

“As discussed previously, New York’s allocation law pro-rates the total amount of an insured’s losses based upon the length of time for which there was insurance coverage,” the opinion reads. “It was undisputed that Seper’s bodily injury occurred over a span of more than thirty years. It was also undisputed that the settlement amount paid by Anheuser Busch was $1,000,000.00.”

McInerney determined that a duty to indemnify simply did not exist in this case.

The judge further determined that the beer company’s bad faith claim was without merit.

“Since this court has already determined that INA’s excess layer of coverage was never reached, it is impossible based on said finding for Anheuser-Busch to demonstrate that INA lacked a reasonable basis to deny coverage,” McInerney wrote. “Therefore, Anheuser Busch failed to prove bad faith and summary judgment on the bad faith claim was appropriate.”

Lastly, McInerney wrote that Pennsylvania’s Bad Faith Statute was primarily intended to protect residents of the commonwealth, and in this case, because Anheuser-Busch is a Missouri corporation with its headquarters in Missouri, no Pennsylvania residents were alleging harm.