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Appeals court overturns Kaiser asbestos ruling

Posted On: Jan. 10, 2007 12:00 AM CST

LOS ANGELES--Each claimant's injurious exposure to asbestos products constitutes a separate "occurrence" under a primary commercial general liability policy, a California appeals court has ruled.

The Tuesday ruling in London Market Insurers vs. The Superior Court of Los Angeles County overturned a lower court ruling that Kaiser Cement & Gypsum Corp.'s decision to manufacture and distribute products containing asbestos constituted a single annual occurrence under policies purchased from Truck Insurance Exchange.

Thousands of plaintiffs have sued Kaiser alleging product liability-related injuries from three decades of making asbestos-containing materials, court records show.

After making more than $50 million in indemnity payments, Truck sought a declaratory judgment that its policy limits were exhausted. It also sought summary adjudication, arguing that Kaiser's decision to manufacture and distribute asbestos products arose from of a single annual occurrence.

The trial court agreed, which led Kaiser's excess insurers to appeal.

The excess insurers argued that the trial court wrongly concluded that Truck's policy limits were exhausted because the relevant occurrence was "injurious exposure to asbestos," and that each injury resulted from a separate occurrence.

However, California's 2nd District Court of Appeals sided with the excess insurers on the determination of a single occurrence and vacated the summary judgment. Even so, the appeals court said it could not determine whether Truck's policies had been exhausted.