Olin Corp. v. Lamorak Ins. Co.

332 F.Supp.3d 818

OLIN CORPORATION, Plaintiff,

v.LAMORAK INSURANCE COMPANY, Defendant.

Lamorak Insurance Company f/k/a OneBeacon America Insurance Company, Third-Party Plaintiff,

v.Certain Underwriters at Lloyd's, London and London Market Insurance Companies, et al.,Continental Casualty Company, General Reinsurance Corporation, Fireman's Fund Insurance Company, Munich Reinsurance America, Inc., f/k/a American-Reinsurance Company, and Great American Insurance Company, Third-Party Defendants.

84-cv-1968 (JSR)

United States District Court, S.D. New York.

Signed July 15, 2018

Filed July 17, 2018

Jenner & Block LLP, Chicago, IL (Craig C. Martin, Peter J. Brennan, Matthew J. Thomas of counsel), and Husch Blackwell LLP, St. Louis, MO (Alan E. Popkin, David W. Sobelman, Jerry K. Ronecker, Joel B. Samson of counsel), for plaintiff Olin Corporation.

Kennedys CMK, LLP, Philadelphia, PA (Ralph J. Luongo, Elaine Whiteman Klinger, Bradley J. Mortensen, Benjamin A. Blume, Erik B. Derr, Victoria Allen, Elizabeth A. Sutton, Diane M. Karnes, Gary S. Kull of counsel), and Simpson, Thacher & Bartlett LLP, New York, NY (Bryce L. Friedman, Susannah S. Geltman of counsel), for defendant/third-party plaintiff Lamorak Insurance Company f/k/a OneBeacon America Insurance Company.

Mendes & Mount, LLP, New York, NY (Matthew B. Anderson, John McAndrews, William Seo of counsel), for third-party defendants Certain Underwriters at Lloyd's, London and Certain London Market Insurance Companies.

Ford, Marrin, Esposito, Witmeyer & Gleser, LLP, New York, NY (Michael L. Anania, Gregory R. Bruno of counsel), for third-party defendants Continental Casualty Company and Munich Reinsurance America, Inc.

Bates Carey LLP, Chicago, IL (Robert J. Bates, Jr. of counsel), for third-party defendant Munich Reinsurance America, Inc.

Budd Larner, P.C., Short Hills, NJ (Michael J. Balch of counsel), for third-party defendant General Reinsurance Corporation.

OPINION AND ORDER

JED S. RAKOFF, U.S.D.J.

Before the Court are the motions of Olin Corporation ("Olin") for summary judgment on its claims against Lamorak Insurance Company ("Lamorak") for insurance coverage at the fifteen "Remaining Sites"¹ and for partial summary judgment on Lamorak's third-party claims for contribution and indemnity against Certain Underwriters at Lloyd's, London and London Market Insurance Companies (the "London Market Insurers" or "London"), Continental Casualty, Munich Reinsurance, and General Reinsurance, ECF Nos. 2195, 2186; the motions of Lamorak for summary judgment on Olin's claims at the Remaining Sites and for summary judgment on its own third-party claims, ECF Nos. 2188, 2189; the motions of the London Market Insurers for partial summary judgment on Lamorak's third-party claims and its own claims against Olin under Rule 14, ECF Nos. 2190, 2191; and the motions of General Reinsurance, Continental Casualty, and Munich Reinsurance for summary judgment on Lamorak's third-party claims, ECF Nos. 2205, 2192. Also before the Court are Olin's motion to strike portions of the reports and testimony of Lamorak's experts, ECF No. 2222, and Lamorak's motion to strike Olin's Rule 56.1 statement, ECF No. 2252.

BACKGROUND

The background of this interminable litigation has been recounted in countless orders, memoranda, and opinions issued over the past several decades, familiarity with all of which is here, of course, presumed. But the following facts are particularly relevant for present purposes:

Predecessors to Lamorak issued three excess insurance policies to Olin providing relevant coverage from January 1, 1970 through December 31, 1970 (the "Policies"). See Olin Corporation's Counterstatement of Undisputed Material Facts in Opposition to Lamorak Insurance Company's Motion for Summary Judgment on Liability, Damages and Other Relief Sought by Olin Corporation for the Remaining Sites ("Olin Counter Remaining Sites 56.1") at ¶ 6, ECF No. 2269. These Policies provide up to $20 million of coverage for each "occurrence" and attach at various points above an underlying INA policy limit of $300,000. Olin Counter Remaining Sites 56.1 at ¶ 7. They are referred to as "excess" policies because they attach above an underlying, or "primary," policy.

Under Lamorak's policies:

(1) Olin is entitled to indemnity "for all sums which [Olin] shall be obligated to pay by reason of the liability; (a) imposed upon the Insured by law, (b) assumed under contract or agreement by [Olin] for damages, direct or consequential and expenses, all as more fully defined by the term ‘ultimate net loss’ on account of ... Property Damage ... caused by or arising out of each occurrence happening anywhere in the World." Id. at ¶ 19.

(2) "Ultimate net loss" is defined in relevant part as "the total sum which the Insured, or any Company as his insurer, or both, becomes obligated to pay by reason of ... property damage...." Id. at ¶ 21.

(3) A covered "Occurrence" is "an accident or a happening or event or a continuous or repeated exposure to conditions which unexpectedly and unintentionally result in personal injury, property damage or advertising liability during the policy period," and "[a]ll such exposure to substantially the same general conditions existing at or emanating from one premises location shall be deemed one occurrence." Id. at ¶ 21.

(4) Covered "Property Damage" constitutes the "loss of or direct damage to or destruction of tangible property (other than property owned by [Olin] )." Id. at ¶ 21.

Under Lamorak's policies, coverage is "subject" to certain conditions. For example, Olin must pay a premium, and when there is an occurrence, "notice shall be sent [to Lamorak] ... as soon as practicable," defined to mean when "[Olin] has information from which [Olin] may reasonably conclude that an occurrence covered [under the Policies] involves injuries or damages which, in the event that [Olin] should be held liable, is likely to involve [the Policies]." See Lamorak Insurance Company's Response to Olin Corporation's Statement of Undisputed Material Facts in Support of its Motion For Summary Judgment on The Remaining Sites and Lamorak's Counterstatement of Undisputed Material Facts ("Lamorak Counter Remaining Sites 56.1") at ¶¶ 9(b), 11, ECF No. 2263. As to this latter requirement, Olin only has "knowledge of an occurrence" or "knowledge of a suit" if "an executive officer ... shall have received such notice from its agent, servant or employee." Id. at ¶ 10. Olin's "failure to give notice of any occurrence which at the time of its happening did not appear to involve [the Policies], but which, at a later date, would appear to give rise to claims [covered under the Polices], shall not prejudice such claim." Id. at ¶ 9(b).

Endorsement No. 6 of Lamorak Policy EY-8057-011 and Lamorak Policy EY-8057-012 provide in part as follows:

It is agreed that, notwithstanding anything contained herein to the contrary, this policy shall not indemnify the Insured in respect to any claim made against the Insured by reason of any act committed, prior to February 1, 1964.

Olin Counter Remaining Sites 56.1 at ¶ 22.

Olin now seeks coverage from Lamorak under these Policies for the following fifteen Remaining Sites: Assonet, Bethany, Brazier Forest Industry, Central Chemical, Charleston, Crab Orchard, Frontier Chemical—Pendleton, Middletown/Tri-Star, Morgantown Ordnance Works, New Haven, Niagara County Refuse, North Little Rock, Olin Water Services, Pine Swamp, and Wallisville Road.

Olin has entered into settlement agreements with its other excess insurers—London, Continental, General Reinsurance, and Munich Reinsurance—releasing coverage for some of the Remaining Sites (among others). See Third-Party Defendants Certain Underwriters at Lloyd's, London and Certain London Market Insurance Companies' Response to Lamorak Insurance Company's Local Rule 56.1 Statement of Undisputed Material Facts in Support of Lamorak Insurance Company's Motion for Summary Judgment on Its Third-Party Claims at ¶ 16, ECF No. 2240; Third-Party Defendant General Reinsurance Corporation's Response to Lamorak Insurance Company's Local Rule 56.1 Statement of Undisputed Material Facts in Support of Lamorak Insurance Company's Motion for Summary Judgment on its Third-Party Claims at ¶ 16, ECF No. 2251; Continental Casualty Company and Munich Reinsurance America, Inc.'s Response to Lamorak Insurance Company's Statement of Undisputed Material Facts and Counterstatement of Undisputed Material Facts Pursuant to Local Civil Rule 56.1 at ¶ 16, ECF No. 2242; Olin Corporation's Counterstatement of Undisputed Material Facts in Opposition to Lamorak Insurance Company's Motion for Summary Judgment on Its Third-Party Claims at ¶ 16, ECF No. 2248.

The Court first addresses Olin's motion to strike Lamorak's expert opinions relating to costs and Lamorak's motion to strike Olin's 56.1 statement. The Court then turns to Olin and Lamorak's motions for summary judgment on the Remaining Sites. Next, the Court considers the motions of Olin, Lamorak, London, Continental Casualty, Munich Reinsurance, and General Reinsurance for summary judgment on Lamorak's third-party claims. Finally, the Court addresses London's motion for summary judgment on its Rule 14 claims.

Olin's Motion To Strike

Olin moves to strike portions of the expert reports and testimony of Lamorak's experts Douglas J. Swanson, Sin Senh, and Kelly Coulon of Roux Associates Inc. (the "Roux Experts" and the "Roux Report") and Scott A. Recker of the Antea Group (the "Recker Reports"). Specifically, Olin moves to strike the experts' opinions that relate to the costs incurred by Olin for the investigation and remediation of contamination at the Remaining Sites.

I. Background

The Roux Report is a joint report authored by Swanson, Senh, and Coulon. See Declaration of Craig C. Martin in Support of Olin Corporation's Motion to Strike the February 9, 2018 Expert Report and Testimony of Douglas J. Swanson, Sin Senh, and Kelly Coulon of Roux Associates and Scott A. Recker ("M...