Port Authority of Ny and Nj v. Affiliated Fm Ins.

245 F.Supp.2d 563

The PORT AUTHORITY OF NEW YORK & NEW JERSEY and Port Authority Trans-Hudson Corporation, Plaintiffs, v. AFFILIATED FM INSURANCE COMPANY, et al., Defendants.

No. CIV.A. 91-2907(JWB).

United States District Court, D. New Jersey.

May 17, 2001.

COPYRIGHT MATERIAL OMITTED

The Port Authority of New York and New Jersey by Shirley Goldstein, Esquire, Senior Litigation Counsel, New York City, Newark Legal & Communications Center by Hugh Welsh, Esquire, Newark, NJ, for Plaintiffs.

Podvey, Sachs, Meanor, Catenacci, Hildner & Cocoziello by Rebecca Levy Sachs, Esquire, Newark, NJ, for Defendants Affiliated FM Insurance Company and Appalachian Insurance Company.

Zelle, Hofmann, Voelbel & Gette by Paul L. Gingras, Esquire, Michelle K. Enright, Esquire, Minneapolis, MN, Sellar Richardson by James P. Richardson, Esquire, Roseland, N J, for Defendants American Motorists Insurance Company, Lumbermens Mutual Casualty Company and American Protection Insurance Company.

Daar, Fisher, Kanaris & Vanek by Henry R. Daar, Esquire, Lawrence D. Mason, Esquire, Chicago, IL, Connell, Foley & Geiser by John B. LaVecchia, Esquire, Roseland, NJ, for Defendant Arkwright-Boston Manufacturers Insurance Company and Columbia Casualty Company. Feinberg & Tritsch by Bruce A. Tritsch, Esquire, Livingston, Cassiday, Schade & Gloor by A. Jeffrey Seidman, Esquire, Chicago, IL, for Defendant Allstate Insurance.

Mound, Cotton & Wollen by Stuart Cotton, Esquire, Jennifer Cheesman, Esquire, Jeffrey S. Weinstein, Esquire, New York City, for Defendants American Home Assurance Company, Birmingham Fire Insurance of Pennsylvania, Covenant Mutual Insurance Company, Insurance Company of the State of Pennsylvania, Lexington Insurance Company and Providence Washington Insurance Company.

Citibank by Thomas Lahihff, Esquire, New York City, for Defendant Citibank, N.A.

Duane, Morris & Heckscher by Gregory R. Haworth, Esquire, Newark, NJ, Ropes & Gray by Kenneth W. Erickson, Esquire, Matthew Burke, Esquire, Robert A. Skinner, Esquire, Boston, MA, for Defendants Icarom, P.L.C. and London Market Insurers.

Thurm & Heller, By Michael A. Miranda, Esquire, New York City, for Defendant Ludgate Insurance Co.

Grotefeld & Denenberg by Charles R. Tuffley, Esquire, Southfield, MI, for Defendant Pennsylvania Lumbermens Insurance Company.

Cozen and O'Connor by Richard M. Mackowsky, Esquire, Michael R. McCarty, Esquire, John J. Dwyer, Esquire, Philadelphia, PA, for Defendants Twin City Fire Insurance, Hartford Accident & Indemnity and Hartford Fire Insurance.

Hardin, Kundla, McKeon, Poletto & Polifroni by Janet L. Poletto, Esquire, Jennifer Smiles, Esquire, Springfield, NJ, for Defendant U.S. Fire Insurance Company.

Siegal & Napierkowski by Seth Goodman Park, Esquire, Cherry Hill, NJ, for

Defendant Century Indemnity Company, as successor to CCI Insurance Co., as successor to Insurance Company of North American and as successor to CIGNA Specialty Ins. Co. f/k/a California Union Ins. Co.

Clausen Miller by Charles J. Rocco, Esquire, Newark, Clausen Miller by Dennis Fitzpatrick, Esquire, Chicago, IL, for Defendant United Fire & Casualty Company.

OPINION

BISSELL, District Judge.

This matter comes before the Court on the motion of certain defendant insurers for summary judgment on several alternative grounds all of which pertain to coverage or lack thereof under the first-party property insurance policies in effect for various periods from 1978 to 1991 ("the Policies")¹ that form the basis of plaintiffs claims.

PROCEDURAL BACKGROUND

On June 3, 1991, the plaintiffs the Port Authority of New York and New Jersey, and Port Authority Trans-Hudson Corporation (collectively "the Port Authority" or "plaintiff) filed this action in the Superior Court of New Jersey, Law Division, Essex County, against various insurance companies that had issued first-party property insurance policies to the Port Authority between 1969 to 1988. In this suit, the Port Authority seeks to recover costs and expenses it incurred and would continue to incur from asbestos management and abatement activities in its New York and New Jersey facilities.

On May 7, 1996, the Court entered Case Management Order No. 1. due to the size and complexity of the case, the Court divided the litigation into three cumulative phases. In Phase I, the parties would address whether coverage existed under any of the first-party insurance policies named by the Port authority in its Complaint.²

In mid-2000, the Court considered an initial round of summary judgment motions directed to certain coverage issues. By its Opinion and Order ("the First Summary Judgment Opinion") of June 5, 2000, this Court granted partial summary judgment against the Port Authority in favor of the certain defendants, and others, on the grounds that plaintiffs claims for losses under certain insurance policies were barred due to the Port Authority's breach of contractual provisions requiring timely notice and suit within a prescribed period, and the non-issuance of an insurance policy by a particular defendant. One of the determinations in that Opinion was that, for purposes of provisions in the policies pertaining to notice of loss and suit limitations, the Port Authority was aware of its asbestos losses at the latest when it filed a lawsuit against asbestos manufacturers and distributors in 1987 ("the Allied lawsuit").

The present motions constitute a second round of summary judgment motions directed to several coverage issues. They are: (a) motion for summary judgment on the insuring agreements; (b) motion of summary judgment on the ground that the Port Authority's alleged losses were not fortuitous; (c) motions for summary judgment on excluded perils (with corresponding partial joinder motion of certain defendants); and (d) motion for summary judgment on this Court's June 5, 2000 Opinion. Defendants also move in limine for the exclusion of certain evidence of the plaintiff generated by settled dust sampling. The Court grants this in limine motion, as well as that directed to the insuring agreements. Because these dispositions will result in a final judgment in favor of the defendants on all claims, the Court chooses not to address motions in categories (b), (c) and (d) above. Any party desiring that the Court adjudicate any remaining motion (rather than dismiss it as moot) shall advise the Court of that position, in writing, within 10 days of the date of this Opinion.

DISCUSSION

I. Standard for Summary Judgment Pursuant to Fed.R.Civ.P. 56

Federal Rule of Civil Procedure 56(c) provides that summary judgment should be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Chipollini v. Spencer Gifts, Inc., 814 F.2d 893, 896 (3d Cir.) (en banc), cert, dismissed, 483 U.S. 1052,108 S.Ct. 26, 97 L.Ed.2d 815 (1987). In deciding a motion for summary judgment, a court must view the facts in the light most favorable to the nonmoving party and must resolve any reasonable doubt as to the existence of a genuine issue of fact against the moving party. Continental Insurance Co. v. Bodie, 682 F.2d 436, 438 (3d Cir.1982). The moving party has the burden of establishing that there are no genuine issues of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-24,106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

The Supreme Court has stated that, in applying the criteria for granting summary judgment:

[t]he judge must ask ... not whether ... the evidence unmistakably favors one side or the other but whether a fairminded jury could return a verdict for the [non-moving party] on the evidence presented. The mere existence of a scintilla of evidence in support of the [non-movant's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving party]. The judge's inquiry, therefore, unavoidably asks whether reasonable jurors could find by a preponderance of the evidence that the [non-movant] is entitled to a verdict

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact is "material" only if it will affect the outcome of a lawsuit under the applicable law, and a dispute over a material fact is "genuine" if the evidence is such that a reasonable fact finder could return a verdict for the nonmoving party. (Id.)

Once the moving party points to evidence demonstrating no issue of material fact exists, the non-moving party has the duty to set forth specific facts showing that a genuine issue of material fact exists and that a reasonable factfinder could rule in its favor. Ridgewood Bd. of Educ. v. N.E. for M.E., 172 F.3d 238, 252 (3d Cir. 1999). Speculation and conclusory allegations do not satisfy this duty. (Id.) Evidence with a deficient foundation must be excluded from consideration on a motion for summary judgment. Williams v. Borough of West Chester, Pa., 891 F.2d 458, 466 (3d Cir.1989); see also Trap Rock Indus., Inc. v. Local 825, Int'l Union of Operating Eng'rs, 982 F.2d 884, 890-91 (3d Cir.1992).

II. Defendants' Motion to Exclude from Consideration the Port Authority's Dust Sampling Evidence is Granted

This motion is directed to evidence related to the Port Authority's use of a socalled "dust sampling" testing at WTC and Newark Airport buildings, which it has cited in support of its contention that asbestos release occurred at insured locations during the pertinent policy years, 1978 to 1991.³

In all, plaintiff identified three experts who conducted these tests: William Ewing, Richard Hatfield and William Paul Heffernan. These tests were first conducted in 1996, followed by additional testing at different locations a year later, and concluded with testing at still other locations in 2000. (Stringer Aff., Exh. 2)....