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Auto parts firm wins asbestos coverage ruling

Posted On: Apr. 25, 2019 2:18 PM CST

auto parts maker

An Illinois appeals court has overturned a lower court ruling case and held that units of CNA Financial Corp. and Allstate Insurance Co. must view asbestos-related claims against an automobile parts manufacturer as separate, based on location, rather than as one claim for coverage purposes.

La Vergne, Tennessee-based Hennessy Industries Inc. for itself, and as a successor-in-interest to Ammco Tools Inc., filed a declaratory action seeking coverage for personal injury claims for exposure to asbestos through the use of automobile brake equipment manufactured by Ammco, according to Tuesday’s ruling by the Illinois appeals court in Chicago in Continental Casualty Co. v. Hennessy Industries Inc.

While numerous insurers are involved in the case, the ruling focused primarily on CNA unit Continental Casualty and Allstate Insurance, as successor-in-interest to Northbrook Insurance Co.

Between the 1950s and mid-1980s, Ammco manufactured automobile brake equipment, including brake shoe grinders, brake lathes and brake assembly washers, according to the ruling.

The equipment did not contain asbestos, but allegedly released asbestos when used with brake shoes that did contain asbestos, according to the ruling.

A lower court held that the thousands of underlying claims in the case constitute a single occurrence under the relevant insurance policies, which a three-judge appeals court panel unanimously overturned.

Hennessey argues the Continental and Northbrook policies “plainly requires the bundling of claims that arise from the same location, such that each location would be a separate occurrence. We Agree,” said the ruling.

“To read the occurrence definitions as providing that all claims arising from the exposure to the same conditions, even if they occurred at multiple, different locations, give rise to only one occurrence, would be to completely ignore the clear dictate of the premises language that claims arising from similar conditions at the same location should be treated as one occurrence,” said the ruling, in remanding the case for further proceedings.

The ruling states it is not making any determination regarding Hennessy’s liability in the case.

Spokesmen for the insurers and Hennessey could not immediately be reached for comment.

In November, New York’s highest court affirmed dismissal of an $11 million jury verdict against Ford Motor Co. in connection with an auto mechanic’s death from asbestosis.