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Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 

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In the

United States Court of Appeals

For the Seventh Circuit ____________

Nos. 06-4397 & 07-1041

PLASTICS ENGINEERING COMPANY,

Plaintiff-Appellee,

Cross-Appellant,

v.

LIBERTY MUTUAL INSURANCE COMPANY,

Defendant-Appellant,

Cross-Appellee.

____________

Appeals from the United States District Court

for the Eastern District of Wisconsin.

No. 04 C 825—Aaron E. Goodstein, Magistrate Judge.

____________

ARGUED SEPTEMBER 6, 2007—DECIDED JANUARY 22, 2008

____________

Before FLAUM, MANION, and KANNE, Circuit Judges.

KANNE, Circuit Judge. Liberty Mutual Insurance Company (“Liberty Mutual”) appeals the first and third

holdings of the district court’s final declaratory judgment in a case that determined the defense and indemnity

obligations of Liberty Mutual with respect to asbestos

lawsuits against Plastics Engineering Company (“Plenco”).

Plenco, in turn, appeals the second holding. The three

challenged holdings present important questions of

Wisconsin law that are presently unresolved by WisCase: 06-4397 Document: 24 Filed: 01/22/2008 Pages: 17
2 Nos. 06-4397 & 07-1041

consin appellate courts and are likely to recur in future

lawsuits: (1) what constitutes an “occurrence” in an

insurance contract when exposure injuries are sustained

by numerous individuals, at varying geographical locations, over many years; (2) whether Wisconsin Statute

§ 631.43(1) applies to successive insurance policies; and

(3) whether Wisconsin courts would adopt an “all sums” or

pro rata allocation approach to determining liability

when an injury spans multiple, successive insurance

policies. Because current Wisconsin law does not provide

sufficient guidance as to how the Wisconsin Supreme

Court would resolve these issues, we stay this appeal and

certify three questions to the Wisconsin Supreme Court,

pursuant to Circuit Rule 52 and Wisconsin Statute

§ 821.01.

I. HISTORY

Plenco, a Wisconsin Corporation with its principal place

of business in Sheboygan, Wisconsin, began manufacturing

molding compounds in 1934. Plenco has been named as

defendant in hundreds of lawsuits for claims arising

from individuals’ exposure to the company’s asbestoscontaining products, which Plenco manufactured from

1950 until 1983. Liberty Mutual, a Massachusetts corporation with its principal place of business in Massachusetts,

provided primary general liability insurance policies to

Plenco beginning in September 1957. Plenco began purchasing umbrella excess liability policies from Liberty

Mutual in May 1970, and save for a two-year period

when Plenco purchased umbrella coverage from another

insurer, continued to purchase umbrella policies from

Liberty Mutual at least until 2003. To date, Liberty

Mutual has paid all of Plenco’s defense costs, settlements,

and judgments stemming from the asbestos lawsuits.

Liberty Mutual advised Plenco in 2004 that it would

only pay “its proportionate share of reasonable and

Case: 06-4397 Document: 24 Filed: 01/22/2008 Pages: 17
Nos. 06-4397 & 07-1041 3

necessary defense costs.” However, Liberty Mutual has

continued to pay all of Plenco’s defense costs, settlements,

and judgments under a reservation of rights. On September 1, 2004, Plenco filed a complaint in district court,

against Liberty Mutual, on the basis of diversity jurisdiction. See 28 U.S.C. § 1332. Plenco sought a declaratory

judgment that Liberty Mutual was obligated, under the

terms of the insurance policies purchased by Plenco, to

fully defend and indemnify Plenco in connection with all

of Plenco’s pending and future asbestos-related lawsuits. In response, Liberty Mutual sought an opposing

declaration that it was not obligated to pay certain defense

and indemnification expenses, including some it had

been paying on behalf of Plenco, and that it was entitled

to a refund for overpaid amounts.

The parties stipulated to a joint statement of facts,

which outlined the insurance policies at issue in the suit

(primary policies between February 9, 1968, and January

1, 1989; umbrella policies from May 8, 1970, to January 1,

1984; and umbrella policies from January 1, 1986, to

January 1, 1998), and detailed the particular policy

language in dispute. Thereafter, both Plenco and Liberty

Mutual filed cross-motions for summary judgment.

The district court issued a decision and order on

October 2, 2006, which granted in part and denied in part

each party’s motion for summary judgment. On December

6, 2006, the court entered a final declaratory judgment,

to which both parties consented. Specifically, the court

concluded that: (1) per the terms of the policies in question, each individual person’s injury caused by exposure

to Plenco’s asbestos-containing products constitutes a

separate “occurrence”; (2) when an injury is sustained over

numerous, successive policy terms, the policies’ noncumulation provisions—which the court held do not

violate Wisconsin Statute § 631.43(1)—limit Liberty

Mutual’s obligation for an individual claimant’s recovery

Case: 06-4397 Document: 24 Filed: 01/22/2008 Pages: 17
4 Nos. 06-4397 & 07-1041

to the maximum amount allowed in a single triggered

policy for an occurrence; and (3) under the terms of the

policies, Liberty Mutual is obligated to pay all sums

accruing from an injury that triggers any one policy, and

is not entitled to a pro rata contribution from Plenco

where the injury in question occurs partly within and

partly outside of the Liberty Mutual policy period.

II. ANALYSIS

In this appeal, Liberty Mutual challenges the district

court’s “occurrence” holding and its “all sums” allocation

holding. Plenco’s cross-appeal challenges the district

court’s holding on § 631.43(1). All three issues—the

definition of “occurrence” in the context of long-tail exposure injuries, the applicability of § 631.43(1) to successive insurance policies, and the allocation of liability

when an injury spans multiple insurance policies—present

unsettled questions of state law that will directly affect

the outcome of this appeal, and that will undoubtedly

affect the outcome of future cases under Wisconsin law. We

consider each issue in turn, briefly discussing the arguments raised by the parties and the relevant points of

Wisconsin law.

A. Definition of “Occurrence” in Asbestos Litigation

The insurance policies provide that Liberty Mutual’s

liability for bodily injury will be limited to a certain

amount per “occurrence.” Thus, the extent to which Liberty

Mutual must indemnify Plenco depends directly on the

number of occurrences underlying the asbestos lawsuits. The primary policies contain a provision qualifying

“occurrence” for exposure injuries, which stated (with

insignificant wording changes depending on the policy

year): “all bodily injury and property damage arising out

Case: 06-4397 Document: 24 Filed: 01/22/2008 Pages: 17
Nos. 06-4397 & 07-1041 5

of the continuous or repeated exposure to substantially the

same general conditions shall be considered as arising

out of one occurrence.” Plenco and Liberty Mutual debate

the number of occurrences underlying the lawsuits; the

district court ultimately held that each individual’s

exposure to Plenco’s asbestos-containing products constituted a separate occurrence under the insurance policies.

Wisconsin law provides some guidance as to what

constitutes an “occurrence” in insurance contracts. In

Olsen v. Moore, the Wisconsin Supreme Court adopted

the “cause theory” test for identifying an occurrence: if

a single, uninterrupted cause “results in a number of

injuries or separate instances of property damages,” it is

considered one occurrence. 202 N.W.2d 236, 240 (Wis.

1972). “If, however, that cause is interrupted or replaced

by another cause the chain of causation is broken and more

than one accident or occurrence has taken place.” Id. As

the district court pointed out, a cause and result that are

closely linked in time and space are likely to be viewed as

one occurrence. See Welter v. Singer, 376 N.W.2d 84, 87

(Wis. Ct. App. 1985).

The cause theory test for an occurrence has been

applied by Wisconsin courts in the context of exposure to

dangerous conditions. In Society Insurance v. Town of

Franklin, damages to surrounding property that were

caused by a contaminated landfill were said to have

resulted from one continuous occurrence—but the number

of occurrences was not an issue in the case. 607 N.W.2d

342, 345 (Wis. Ct. App. 2000). In Wisconsin Electric Power

Co. v. California Union Insurance Co., the Wisconsin Court

of Appeals held that there was one uninterrupted occurrence that began when a power supply was installed,

and continued while the power supply was in order. 419

N.W.2d 255, 258 (Wis. Ct. App. 1987). Although these

cases may be analogous to the asbestos realm, they are

different in one significant respect. In Society Insurance

Case: 06-4397 Document: 24 Filed: 01/22/2008 Pages: 17
6 Nos. 06-4397 & 07-1041

and Wisconsin Electric, the damage stemmed from exposure that happened at one geographical site. Here, the

company manufactured asbestos at its Wisconsin plant,

but much of the exposure to asbestos happened at varying locations across the country, where Plenco’s products

were incorporated into other manufacturers’ products.

Liberty Mutual invokes the “cause test” in arguing that

there was one cause underlying all of Plenco’s asbestos

lawsuits: the continuous manufacture and sale of asbestoscontaining molding compounds. Plenco, in contrast,

argues that the manufacture of asbestos itself caused no

harm—each individual’s subsequent exposure to asbestos

caused that individual’s injury. Plenco emphasizes that

the thousands of lawsuit claimants allege asbestos exposure that occurred at different locations, at different

times, under different circumstances, via different Plenco

products. Both parties cite several cases from other

states and federal courts to support their positions,

ultimately highlighting the varied interpretations other

jurisdictions have accorded the term “occurrence.”

It is clear that an occurrence under Wisconsin law can be

“ ‘ongoing’ and span a large amount of time, but still be one

occurrence within the meaning of the policy.” Jonas

Builders, Inc. v. United States Fidelity & Guaranty Co.,

639 N.W.2d 223 (Wis. Ct. App. 2001) (unpublished table

decision). However, whether the type of long-term manufacture of, and exposure to, asbestos at issue here constitutes one occurrence under Wisconsin law is unresolved;

guidance from the Wisconsin Supreme Court would be

useful.

B. Applicability of Wisconsin Statute § 631.43(1) to

Successive Insurance Policies

Plenco argues that certain provisions in the insurance

policies violate § 631.43(a) because they limit Liberty

Case: 06-4397 Document: 24 Filed: 01/22/2008 Pages: 17
Nos. 06-4397 & 07-1041 7

Mutual’s liability for one occurrence to the coverage

amount of any one policy that is triggered by the occurrence. In so doing, the provisions eradicate significant

amounts of coverage that Plenco purchased from Liberty

Mutual over the years. Wisconsin Statute § 631.43(1),

titled “Other insurance provisions,” provides that

[w]hen 2 or more policies promise to indemnify an

insured against the same loss, no “other insurance”

provisions of the policy may reduce the aggregate

protection of the insured below the lesser of the actual

insured loss suffered by the insured or the total

indemnification promised by the policies if there

were no “other insurance” provisions.

One of the policy provisions Plenco believes violates the

statute reads, in part:

[I]f an occurrence gives rise to Bodily Injury or Property Damage which occurs partly before and partly

within the policy period the liability of the company

under this policy for such occurrence shall not exceed

$500,000 minus the total of all payments made with

respect to such occurrence under a previous policy or

policies of which this policy is a replacement. The

policies may by their terms define the extent to which

each is primary and each excess . . . .

Liberty Mutual argues that the statute applies only

to “other insurance” provisions in policies—“other insurance” provisions being particular types of clauses that

delineate the primary and excess coverage between

multiple, concurrent polices that cover the same loss. The

application of § 631.43(1) does seem to have been limited

to concurrent policies. See, e.g., id.; Tahtinen v. MSI Ins.

Co., 361 N.W.2d 673 (Wis. 1985); Krause v. Mass. Bay

Ins. Co., 468 N.W.2d 755 (Wis. Ct. App. 1991). The district

court relied on the distinction between concurrent

policies and successive policies when it held that

Case: 06-4397 Document: 24 Filed: 01/22/2008 Pages: 17
8 Nos. 06-4397 & 07-1041

§ 631.43(1) does not apply to the non-cumulation provisions in Plenco’s policies, which are successive.

Plenco, on the other hand, argues that § 631.43(1)

generally prohibits attempts by insurers to reduce or

eliminate insurance coverage insureds have paid for.

Plenco believes the district court incorrectly held that

§ 631.43(1) applies only to concurrent insurance policies,

noting that had the legislature desired to limit the

statute in that manner, it could easily have done so by

directly writing the limitation into the provision. Further,

Plenco points to other states that have not limited the

definition “other insurance” provisions to concurrent

policies. 

While issues pertaining to § 631.43(1) have arisen in

Wisconsin appellate courts, to our knowledge the specific

question at issue here—whether § 631.43(1) prohibits

an insurance company from limiting coverage for any

given “occurrence,” which triggers multiple successive

policies, to the limit of a single policy year—has never been

addressed. We therefore request guidance from the Wisconsin Supreme Court regarding whether § 631.43(1)

applies to successive insurance policies.

C. “All Sums” or Pro Rata Allocation of Insurer Liability

The district court’s third holding addressed the allocation of liability among insurers when an injury triggering one policy occurs partly within and partly outside of

that policy period. The ultimate issue is whether an

insurer is responsible to pay “all sums” associated with the

injury, subject to policy limits, or alternatively, whether

the insurer is responsible only for a pro rata share of the

costs, based on the proportion of the injury that occurred

during the policy period. In considering the specific

contract language, the district court explained: “[a]lthough

Case: 06-4397 Document: 24 Filed: 01/22/2008 Pages: 17
Nos. 06-4397 & 07-1041 9

the language varies slightly throughout the numerous

policies, Liberty’s obligations can be summarized as

an obligation to pay ‘all sums’ that Plenco should be

obligated to pay as the result of personal injury that

occurred during the policy period.”

There are two sub-issues within the “all sums” allocation

debate. The first concerns the insurer’s defense obligations when an insured faces a claim that triggers one

insurance policy. The second relates to the insurer’s

indemnification obligations arising from adverse judgments and settlements against the insured. The Wisconsin

Supreme Court has held that “the duty to defend is

broader than the duty to indemnify.” Reid v. Benz, 629

N.W.2d 262, 267-68 (Wis. 2001). “ ‘The duty of defense

depends on the nature of the claim and has nothing to

do with the merits of the claim.’ The duty to indemnify,

in contrast, arises when . . . the claim is within the

parameters of the policy and the insured is adjudged

liable.” Id. (quoting Elliott v. Donahue, 485 N.W.2d 403,

407 (Wis. 1992)).

1. Duty to Defend

Plenco argues that the policies unambiguously assign

to Liberty Mutual an absolute duty to defend entire

asbestos lawsuits, not just portions of such suits, and cites

Wisconsin case law to support its position. Grube v. Daun,

496 N.W.2d 106, 122 (Wis. Ct. App. 1992) (“[T]he insurance company must defend the action when some of the

allegations in the complaint fall within the policy coverage

because ‘apportionment of responsibility for the defense

is neither practical nor desirable.’ ” (quoting Engsberg v.

Town of Milford, 597 F. Supp. 251, 256 (W.D. Wis. 1984)).

Liberty Mutual contends that the policies’ definitions of

bodily injury—injury occurring “during the policy peCase: 06-4397 Document: 24 Filed: 01/22/2008 Pages: 17
10 Nos. 06-4397 & 07-1041

riod”—necessarily limits the insurer’s defense liability to

the pro rata share that corresponds with the injury

attributable to the policy period. It acknowledges that

Wisconsin law has imposed broad defense obligations on

insurers when one policy is triggered, but argues that

those obligations should not be imposed in “this context

where the defense obligation can be allocated easily.”

The issue of allocating defense costs has been litigated

in Wisconsin courts, and the law appears to favor Plenco’s

position: “[i]f some coverage exists, the insurer must

defend the entire action, even though certain allegations

may fall outside the scope of coverage.” U.S. Fire Ins. Co.

v. Good Humor Corp., 496 N.W.2d 730, 737 (Wis. Ct. App.

1993). Additionally, “the proper procedure for an insurance company to follow when coverage is disputed is to

request a bifurcated trial on the issues of coverage and

liability and move to stay any proceedings on liability until

the issue of coverage is resolved.” Reid, 629 N.W.2d at 269

(citing Elliott, 485 N.W.2d at 406). Liberty Mutual has

been defending Plenco in its asbestos lawsuits for years;

there is no evidence in the record suggesting that Liberty

Mutual contested its coverage of the alleged asbestos

injuries at the outset of the lawsuits, so as to limit

its defense costs, or that it sought to stay liability proceedings to challenge coverage.

We feel that Wisconsin law generally requires insurers

to defend suits in their entirety. Nonetheless, this

issue may become more complicated if Wisconsin courts

follow a pro rata allocation approach for indemnification liability. If damages are allocated between insurers

based on the percent of the injury that happened in each

policy period, the same principles of proration may support allocation of defense costs. As discussed below, we

are asking the Wisconsin Supreme Court to decided

whether Wisconsin law follows an “all sums” or pro rata

allocation approach, and we ask that it consider the

Case: 06-4397 Document: 24 Filed: 01/22/2008 Pages: 17
Nos. 06-4397 & 07-1041 11

implications for both the insurer’s duty to defend and its

duty to indemnify. We turn now to the latter.

2. Duty to Indemnify

With respect to the indemnification of damages under

the policies, Plenco again argues that the plain language

of the contracts dictates that Liberty Mutual is obligated

to pay “all sums”—not just some portion of the damages

incurred by Plenco. The insurance policies never mention

proration of liability directly, and Plenco asserts that if

its insurer is only obligated to pay a pro rata share of

the insured’s liability, Plenco’s reasonable expectation of

complete security in its insurance contracts would be

violated. Plenco contends that, at the very least, even if the

“all sums” language is ambiguous in the policies, the

ambiguity would weigh in favor of the insured and

against the insurer who drafted the contract.

Liberty Mutual, on the other hand, argues that Wisconsin courts would adopt a pro rata approach to allocating

liability among insurers of long-term injuries spanning

multiple years. Liberty Mutual feels that the district

court put too much weight on the words “all sums,” while

ignoring the policies’ “bodily injury” definitions, which

Liberty Mutual believes clearly and ambiguously limited

coverage only to bodily injury that occurred during the

policy period. Liberty Mutual stresses that insurers

provide coverage for specific policy periods and argues

that they should not be forced to pay for costs related to

injuries occurring partially outside of those policy periods.

The amicus curiae, Wisconsin Utilities Association

(WUE), encourages the court to adopt an “all sums”

approach to allocation both generally and in this particular

case. WUE points out that Liberty Mutual’s policies

with Plenco contain “anti-proration clauses” that directly

Case: 06-4397 Document: 24 Filed: 01/22/2008 Pages: 17
12 Nos. 06-4397 & 07-1041

contemplate the insurer’s coverage of injuries that occur

“partly before and partly within the policy period.” These

clauses limit the insured’s recovery amount for any one

occurrence to the maximum of one policy, minus anything already paid out under a previous policy. The

clauses WUE cites are the same clauses that Plenco

believes violate § 631.43(1). See supra Part II.B. WUE

classifies these provisions as “anti-proration clauses,”

because they “telescope” coverage for a continuing occurrence into one policy year. WUE claims that anti-proration

provisions are irreconcilable with the proration of a

single continuous occurrence: an insurer cannot collapse

an injury into a single policy year for one purpose (limiting

the total coverage amount), but treat it as a drawn-out

injury for another purpose (prorating costs between

insurers). WUE goes on to make policy arguments

similar to those advanced by Plenco to further its position that an “all sums” approach to allocation is desirable

and likely to prevail in Wisconsin.

It does not appear that this issue—whether an insurer’s

indemnification duties should be limited to a pro rata

share—has been addressed by the Wisconsin Supreme

Court or the Wisconsin Court of Appeals. Both parties

and the amicus curiae rely on case law from other states,

about half of which supports an “all sums” approach, with

the other half supporting pro rata allocation. This matter

is laden with policy considerations; we believe that the

Wisconsin Supreme Court is a better-situated and more

appropriate tribunal to determine the contours of Wisconsin Law on this issue. See Doe v. American Nat. Red

Cross, 976 F.2d 372, 374 (7th Cir. 1992) (“It would be more

appropriate for the Supreme Court of Wisconsin to address this . . . question than the federal judiciary in view

of the fact that it is an important public policy choice that

no doubt will apply to many cases in the future.”).

Case: 06-4397 Document: 24 Filed: 01/22/2008 Pages: 17
Nos. 06-4397 & 07-1041 13

D. Certification Analysis

Plenco moved for certification pursuant to Circuit Rule

52, which allows us to certify to a state’s highest court

questions of state law that will control the outcome of a

pending case if the rules of the state’s highest court allow

it to entertain such questions. Cir. R. 52. Wisconsin law

permits the Wisconsin Supreme Court to consider and

respond to certified questions of state law, provided the

questions “may be determinative of the cause . . . pending

in the certifying court and as to which there is no controlling precedent in the decisions of the supreme court and

the court of appeals of [Wisconsin].” Wis. Stat. § 821.01.

Liberty Mutual opposes certification and points out

that Plenco filed this case in federal district court in the

first place—urging us to bind Plenco to its chosen forum.

While we do “take into account whether the request for

certification to the state court came from the party who

chose federal jurisdiction in the first place,” Brown v.

Argosy Gaming Co., L.P., 384 F.3d 413, 417 (7th Cir.

2004), this factor is not determinative on its own. If Circuit Rule 52 permits the Wisconsin Supreme Court’s

consideration of significant, state-law questions, we are

authorized to, “sua sponte or on motion of a party,” certify

those questions. Cir. R. 52.

A case is appropriate for certification where it “ ‘concerns

a matter of vital public concern, where the issue will

likely recur in other cases, where resolution of the question

to be certified is outcome determinative of the case, and

where the state supreme court has yet to have an opportunity illuminate a clear path on the issue.’ ” Allstate

Ins. Co. v. Menards, Inc., 285 F.3d 630, 639 n.18 (7th Cir.

2002) (quoting In re Badger Lines, Inc., 140 F.3d 691, 698-

99 (7th Cir. 1998)). Questions that are tied to the specific

facts of a case, however, typically are not ideal candidates

for certification. Id. If the outcome of a case is largely factdependent, and the facts are particularized to the case,

Case: 06-4397 Document: 24 Filed: 01/22/2008 Pages: 17
14 Nos. 06-4397 & 07-1041

resolution of the issues by a court may have limited

precedential value; thus, certification to a state supreme

court may be inappropriate. Erie Ins. Group v. Sear Corp.,

102 F.3d 889, 892 (7th Cir. 1996); Woodbridge Place

Apartments v. Washington Square Capital, Inc., 965 F.2d

1429, 1434 (7th Cir. 1992).

The interpretation of any contract necessarily involves

analysis of the particular contract language at issue, and

application of case-specific facts. Woodbridge Place Apartments, 965 F.2d at 1434. However, not all contract interpretation questions are of limited precedential value

and inappropriate for certification. In Transamerica

Insurance Co. v. Henry, we asked the Indiana Supreme

Court to explain whether a certain state law rendered

Indiana a “compulsory insurance state,” and whether

the contested application of a “household exclusion

clause” in an automobile insurance policy violated the

public policy of Indiana. 904 F.2d 387, 391 (7th Cir. 1990).

A similar question regarding household exclusion clauses

was certified to the Indiana Supreme Court in Allstate

Insurance Co. v. Boles, 481 N.E.2d 1096 (Ind. 1985). Where

resolution of contract questions by a state’s highest court

will be useful beyond the parameters of the instant

dispute, and the other criteria for certification are met,

certification is appropriate.

The contract provisions in question here, while somewhat unique to the parties, contain standardized language that undoubtedly appears in other insurance contracts governed by Wisconsin law. The definition of

occurrence in the policies—an “accident, including continuous or repeated exposure to conditions, which results

in bodily injury or property damage neither expected nor

intended from the standpoint of the insured”—mirrors

standard insurance policy definitions of occurrence: “an

accident, including continuous or repeated exposure to

conditions, which results in bodily injury or property

Case: 06-4397 Document: 24 Filed: 01/22/2008 Pages: 17
Nos. 06-4397 & 07-1041 15

damage neither expected nor intended from the standpoint of the insured.” John C. Yang, The Fortuity Principle:

Understanding the Fundamentals Underlying the Laws

of Insurance, 760 PLI/Lit 7 at 17 (2007). The “all sums”

provisions in the contracts likewise mirror standard

insurance policy language. See Michael G. Doherty,

Comment: Allocating Progressive Injury Liability Among

Successive Insurance Policies, 64 U. Chi. L. Rev. 257, 261

(1997) (noting that, in the standard General Commercial

Liability contract, the insurer agrees to pay “those sums

that the insured becomes legally obligated to pay as

damages because of ‘bodily injury’ or ‘property damage’

(caused by an occurrence) to which this insurance

applies. . . . (The insurance company has) the right and

duty to defend any ‘suit’ seeking those damages”). Noncumulation provisions are also common, and are debated

in litigation. See Randy Paar, Recovery is in the Details:

Hot Issues in the Administration and Application of

General Liability Insurance Policies, 86 PLI/NY 199,

224 (2000); Scott M. Seaman & Charlene Kittredge, Excess

Liability Insurance: Law and Litigation, 32 Tort & Ins.

L.J. 653, 687-89 (1997). How these provisions are interpreted in the context of long-tailed exposure claims under

Wisconsin law will significantly shape the future of

insurance litigation in the state.

All three of the district court’s holdings hinge on questions of state law that are of vital public concern and are

likely to recur in other cases. We can find no Wisconsin

cases addressing the specific questions raised, and resolution of these questions will control the outcome of this

appeal. To our knowledge, the Wisconsin Supreme Court

has not had the opportunity to “illuminate a clear path” on

these issues. Allstate Ins. Co., 285 F.3d at 639 n.18. We

thus find that the questions in this case are appropriate

for certification to the Wisconsin Supreme Court.

Case: 06-4397 Document: 24 Filed: 01/22/2008 Pages: 17
16 Nos. 06-4397 & 07-1041

III. CONCLUSION

We respectfully request that the Supreme Court of Wisconsin answer the following questions of law:

1. Under Wisconsin law, what constitutes an “occurrence” in an insurance contract when exposure injuries

are sustained by numerous individuals at varying

geographical locations over many years?

2. Does Wisconsin Statute § 631.43(1) apply to successive insurance policies when an occurrence is ongoing

and spans multiple insurance policies, thereby prohibiting efforts by consecutive insurers to reduce coverage to the maximum of a single policy period?

3. In Wisconsin, are insurers obligated to pay “all

sums” related to the defense and/or indemnification of

an injury that triggers one insurance policy; or alternatively, are insurers liable for a pro rata share of

defense costs and/or damages depending on how much

of the injury occurred during the triggered insurance

policy period?

We invite the Justices of the Wisconsin Supreme Court

to reformulate these questions, if necessary. Likewise, we

emphasize that nothing in this certification request

should be read to limit the scope of the Wisconsin Supreme Court’s inquiry.

The Clerk of this Court will transmit the briefs and

appendices in this case as well as a copy of this order to

the Wisconsin Supreme Court. Upon the request of the

Wisconsin Supreme Court, the Clerk will transmit all or

any part of the record as that court so desires. Further

proceedings in this Court are stayed while this matter

is considered by the Wisconsin Supreme Court.

QUESTIONS CERTIFIED.

Case: 06-4397 Document: 24 Filed: 01/22/2008 Pages: 17
Nos. 06-4397 & 07-1041 17

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—1-22-08

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