Opinion ID: 469785
Heading Depth: 2
Heading Rank: 2

Heading: Application of the Trigger

Text: 37 Because we adopt the injury-in-fact trigger as most consistent with New York law, summary judgment on the question of the insurers' duty to indemnify is not appropriate in this case. It may be, as suggested by Abex, that in the context of asbestos cases, injury occurs simultaneously with exposure. 36 The record below is devoid of evidence on when asbestos-induced injury occurs, however, and the inescapable dispute of fact over this issue prevents summary judgment. The CGL policy requires that real injury occur during the policy period before an insurer is obligated to indemnify an insured, and thus makes the existence of injury a material issue of fact. We therefore remand for further proceedings in the District Court on the insurers' duty to indemnify under the injury-in-fact trigger. 38 On remand, there will be no need for the District Court to examine extrinsic evidence on intent. In American Home Products, the court adopted the injury-in-fact trigger as mandated by the plain meaning of the definition of occurrence in the CGL policy. We adhere to this view. The contract language here is susceptible of only one reasonable interpretation; therefore, under New York law, extrinsic evidence of intent is irrelevant. 37 39 The principal task for the District Court on remand will be to determine when injury-in-fact occurred. As Judge Sofaer observed, the trier of fact need not pinpoint the exact date of injury. Instead, all that is necessary is reasonably reliable evidence that the injury, sickness, or disease more likely than not occurred during a period of coverage. 38 Once the court determines that asbestos exposure causes injury at a particular time and in a particular manner, it may be appropriate to apply these findings to all similar cases. 39 Such an approach would avoid the need for repetitive minitrials on this issue for each of the tort claims against Abex. However, we will leave this matter for assessment by the District Court in the first instance. 40 Finally, the District Court must consider the applicability of the deemer clauses and other insurance clauses in the Liberty policies. Although these provisions could significantly affect Liberty's duty to indemnify Abex, there is no mention of these clauses in the District Court's order. The deemer clause, for example, provides that injury caused by exposure to injurious conditions is deemed to occur on the last day of exposure. This could be read to eliminate Liberty's duty to indemnify Abex for injuries caused by exposure that ceased before the beginning of Liberty's policy period, as well as injuries caused in part by exposure occurring after the expiration of the Liberty policy. Unfortunately there is no Second Circuit interpretation of these two contract provisions, 40 so we must leave the task of interpreting these provisions to the District Court. The District Court must first determine if these provisions have a plain meaning. If they are susceptible of at least two fairly reasonable meanings, under New York law the court must then examine any extrinsic evidence. 41 Only after all aids to construction have been employed but have failed to resolve the ambiguities should the court apply the maxim that ambiguities are to be construed against the insurer. 42
41 Although the issues surrounding the insurers' duty to indemnify Abex cannot be resolved on a motion for summary judgment, the same is not true with respect to the duty to defend Abex. Under well-settled principles of New York law, Abex is entitled to defense by the insurance companies if the underlying tort complaints permit proof of the facts establishing coverage, or if the complaints do not exclude the possibility that injury-in-fact occurred during the policy period. 43 Only if the insurers establish, as a matter of law, that there is no possible factual or legal basis on which the insurer might eventually be obligated to indemnify, 44 would they escape their duty to defend Abex. Recently, a New York trial court applied these principles and granted an insured summary judgment on the duty to defend when the insurers failed to establish that there is no possible factual or legal basis on which they might eventually be obligated to indemnify [the insured] against liability. 45 Summary judgment is also appropriate in this case because the insurers here too have failed to establish that no coverage is possible as a matter of law. 42 As we concluded above, indemnification is triggered by injury-in-fact. Thus, as long as there remains a possibility--however remote--that injury occurred during the policy periods of each insurer, the insurers must defend Abex. 46 Because it is possible for asbestos-induced injuries to occur at any time following initial exposure, the tort complaints against Abex permit proof that the injury-in-fact occurred during the policy periods of all three insurers. We hold, therefore, that the insurers must immediately fulfill their duty to defend Abex. This obligation will continue until the insurers establish that, as a matter of law, there is no possibility that they will have to indemnify Abex. 47