General Insurance Company of America v. The Walter E. Campbell Company, Inc. et al

Filing 251

MEMORANDUM. Signed by Judge William M Nickerson on 5/26/2015. (nd2s, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND

GENERAL INSURANCE COMPANY OF
AMERICA

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v.
* Case No. WMN-12-3307
*
THE WALTER E. CAMPBELL COMPANY, *
INC. et al.
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*
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MEMORANDUM
Before the Court are the following motions: a Motion to
Certify Questions of Law to the Court of Appeals of Maryland
filed by the Walter E. Campbell Company, Inc. (WECCO), ECF No.
219; a Motion for Partial Summary Judgment, filed by United
States Fire Insurance Company (U.S. Fire), The Hartford
Financial Services Group, Inc. (The Hartford),1 St. Paul Fire and
Marine Insurance Company (St. Paul), Continental Insurance
Company (Continental), National Indemnity Company (National
Indemnity), and Plaintiff General Insurance Company of America
(General Insurance) (collectively, Certain Insurers), ECF No.
220; WECCO’s motion to strike the evidence offered in support of
Certain Insurers’ summary judgment motion, ECF No. 223; a Motion
for Voluntary Dismissal filed by General Insurance and WECCO,
1

The Hartford Financial Services Group, Inc. appears to be a
misnamed party. The policies at issue in this action are
policies issued by Hartford Accident and Indemnity Company and
Hartford Fire Insurance Company.

ECF No. 237; and a Motion for Partial Summary Judgment filed by
Property & Casualty Insurance Guaranty Corporation (PCIGC), ECF
No. 239.2

The motions are all ripe.

Upon review of the filings

and the applicable law, the Court determines that no hearing is
necessary, Local Rule 105.6, and that: (1) WECCO’s motion to
certify questions of law will be denied; (2) Certain Insurer’s
motion for partial summary judgment will be granted; (3) WECCO’s
motion to strike will be denied; (4) the motion for voluntary
dismissal will be granted; and (5) PCIGC’s motion for partial
summary judgment will be granted.
I. FACTUAL AND PROCEDURAL BACKGROUND
This action involves an insurance coverage dispute between
WECCO - a company which for decades engaged in the business of
handling, installing, disturbing, removing, and selling
asbestos-containing insulation materials - and several of its
insurers.

Certain Insurers issued policies for WECCO between

November 19, 1972, and April 1, 1983, a time period which
Certain Insurers assert was after WECCO ceased selling or
installing asbestos-containing products.

This action already

has a long procedural history and one that has been entangled

2

Also pending is a motion to seal certain materials submitted by
Certain Insurers. ECF No. 230. That motion will be granted for
good cause shown as the materials in question implicate the
attorney client privilege or contain confidential and
proprietary business information.
2

with a parallel action that is currently resting in the Superior
Court of the District of Columbia.

The Walter E. Campbell Co.

v. Gen. Ins. Co. of Am., Civ. No. 13-109 (D.C.) (the D.C.
Action).

A brief review of the procedural history relevant to

the pending motions follows.

A more detailed account of the

procedural history of this action and the D.C. Action was
provided in this Court’s previous opinions dated June 11, 2013,
and January 16, 2014.

ECF Nos. 131 and 146.

This action was filed in this Court by General Insurance,
one of WECCO’s insurers, on November 9, 2012.

Two months later,

on January 7, 2013, WECCO filed the parallel action in the
Superior Court of the District of Columbia raising essentially
the same issues as raised here.

The D.C. Action was

subsequently removed to the United States District Court for the
District of Columbia, remanded back to the Superior Court,
removed again, and remanded again.

On September 12, 2014, the

Superior Court granted Certain Insurers’ motion to stay that
action in light of the pendency of this action.
As the D.C. Action bounced back and forth, WECCO has made
repeated efforts to prevent the resolution of the dispute
between the parties from taking place in this Court.

WECCO

moved to realign the parties so that this case could be
dismissed for lack of jurisdiction, ECF No. 40; asked this Court
to abstain from the exercise of its jurisdiction, ECF No. 104;
3

and, in the pending motion to certify questions of law, ECF No.
219, asked this Court to have the Maryland Court of Appeals,
instead of this Court, decide the central issues in this
dispute.

In its supplement to the motion to certify, ECF No.

238, WECCO again prays, as an alternative remedy to
certification of questions of law to the Maryland Court of
Appeals, that this Court stay this action in deference to the
D.C. Action.
The motivation behind WECCO’s persistence is quite clear
and has been the subject of commentary by both this Court and
the Superior Court for the District of Columbia.

As explained

below, there is binding precedent in the Fourth Circuit on the
two critical issues in this dispute - precedent that is
unfavorable to WECCO’s position on both issues – and, by seeking
another forum, WECCO hopes to avoid the application of that
precedent.

In all fairness, both courts have also recognized

that General Insurance engaged in its own forum shopping,
electing to file its action in this Court to take advantage of
that favorable Fourth Circuit precedent, as opposed to filing in
a Maryland state court where that precedent would not be
binding.
At one point in this action, WECCO also expressed some
uncertainty, real or feigned, as to whether Maryland law should
apply to this dispute.

In support of its earlier maneuvers to
4

have this dispute resolved in the District of Columbia courts,
WECCO suggested that “the law of the District of Columbia
applies to some or all of the issues in this dispute.”
104-1 at 15.

ECF No.

In response to a previous motion for partial

summary judgment filed by Certain Insurers, ECF No. 200, WECCO
opposed the motion in part on the ground that Certain Insurers
had submitted insufficient evidence to support the conclusion
that Maryland law applied to the policies at issue.
at 11-12.

ECF No. 211

On June 11, 2014, this Court denied the previous

motion for partial summary judgment as premature and permitted
three months of limited discovery concerning choice of law
issues.

ECF No. 213.

That discovery appears to have confirmed

what was suspected all along - that Maryland law applies to this
dispute - as WECCO makes no further mention of any unsettled
choice of law issues in its motion to certify questions of law
to the Maryland Court of Appeals.
In opposing Certain Insurers’ previous motion for partial
summary judgment, WECCO also challenged the completeness of
insurance policies submitted with the motion.

Accordingly, in

its Order of June 11, 2014, the Court also permitted discovery
on that issue during the three month discovery period.

WECCO

has renewed its purported concerns about the completeness of the
policies in opposing the current summary judgment motions.

The

completeness of the policies is also one of the primary issues
5

raised in WECCO’s motion to strike the materials submitted in
support of Certain Insurers’ renewed motion for partial summary
judgment.
Certain Insurers’ renewed motion for partial summary
judgment is substantially the same as the previous motion that
was denied as premature.

In this motion, Certain Insurers seek

general declarations concerning the law that governs the
interpretation of the policies at issue, the scope of the
“completed operations hazard” provisions contained in the
policies, and the resolution of which party bears the burden of
proving that a claim falls in or out of the scope of those
provisions.

In addition, Certain Insurers seek a declaration

that the completed operations hazard provisions in their
policies apply to the claims raised in two specific suits:
Emiline T. Good, P.R. of the Estate of Paul Good (dec.) v. The
Walter E. Campbell Company, Inc., et al, No. 24X11000424
(Baltimore City Cir. Ct.) (the Good claim) and Evelyn
Cunningham, Surviving Spouse and Personal Representative of the
Estate of Joseph A. Cunningham (dec.), et al. v. The Walter E.
Campbell Company, Inc., et al., No. 24X12000283 (Baltimore City
Cir. Ct.) (the Cunningham claim).

The claims against WECCO in

these actions were settled in 2014.
Third Party Defendant PCIGC has also filed a motion for
partial summary judgment.

ECF No. 239.
6

PCIGC is a creature of

the Maryland General Assembly and is assigned limited liability
in the event of the insolvency of certain types of insurers.

In

its motion, PCIGC is seeking a declaration regarding the scope
of covered claims for which it has potential liability due to
the insolvency of two particular insurance companies, Centennial
Insurance Company and American Mutual Insurance Company.
The last significant development relative to the pending
motions is that a settlement was reached between General
Insurance and WECCO as to all claims between those two parties.
On the basis of that settlement, WECCO and General Insurance
filed a joint motion to dismiss the claims that they have
asserted against each other.

ECF No. 237.

While the remaining

Certain Insurers did not oppose that motion, they did file a
response requesting that the dismissal be subject to certain
conditions.

ECF No. 240.

II. MOTION TO CERTIFY QUESTIONS OF LAW
There are two issues of insurance policy interpretation
that are at the heart of this coverage dispute.

The first

relates to the manner in which coverage is allocated between
multiple insurers that had policies in place during different
periods of time (the Allocation Issue).

WECCO advocates for an

“all sums” rule, under which each insurer is independently
obligated to indemnify the insured, in full, up to that
insurer’s policy limits.

Under that rule, the insured can be
7

indemnified up to the full limits of any triggered policy and
then, at some later date, the indemnification expenses are
apportioned among the solvent and available insurers that issued
the triggered policies.

Under the alternative “pro rata” rule,

the obligation to indemnify is prorated among all insurers based
upon their time on the risk.

In a 2002 opinion in an asbestos-

related insurance dispute similar in all relevant aspects to
this dispute, the Maryland Court of Special Appeals adopted the
pro rata rule.

Mayor and City Council of Baltimore v. Utica

Mut. Ins. Co., 802 A.2d 1070 (Md. Ct. Spec. App. 2002).

Two

years later, in In Re: The Wallace & Gale Co., the Fourth
Circuit held that the pro rata rule is the law of Maryland in
light of the Maryland Court of Special Appeals’ decision in
Utica Mutual.

385 F.3d 820, 830 (4th Cir. 2004).

The second issue arises out of clauses in the Certain
Insurers’ policies that provide separate and distinct coverage
for “completed operations hazards.”

In contrast to the coverage

for “operations” which was subject only to “each occurrence”
limits, coverage for bodily injury included within the completed
operations hazards are subject to an aggregate limit.

The issue

then becomes, what injuries fall within the completed operations
hazard? (the Completed Operations Issue).
WECCO takes the view that this aggregate limit applies only
when a claimant’s exposure to asbestos occurred after WECCO
8

completed its insulation installation or removal work at a
particular jobsite.

Under its view, if a claimant was exposed

to asbestos during WECCO’s operations, the claim would remain an
operations claim even if the specific actual bodily injury was
not manifested until after the operations were completed.

The

result under this view, in practical terms most relevant here,
is that claims under insurance policies that did not come into
effect until after the completion of all WECCO asbestos
operations would be considered operations claims and not
completed operations hazard claims.

Thus, those claims under

the post-completion policies would not be subject to the
aggregate limit in those policies.
Certain Insurers urge a different interpretation – an
interpretation that has previously been adopted by this Court in
an opinion written by Judge Peter Messitte:
If a claimant’s initial exposure occurred while [the
insured] was still conducting operations, policies in
effect at that time will not be subject to any
aggregate limit. If, however, initial exposure is
shown to have occurred after operations were concluded
or, if exposure that began during operations continued
after operations were complete, then the aggregate
limits of any policy that came into effect after
operations were complete will apply. Where a given
claimant falls within this framework will have to be
considered on a case-by-case basis.
In re Wallace & Gale Co., 275 B.R. 223, 241 (D. Md. 2002)
(emphasis added), vacated in part on other grounds, 284 B.R. 557
(D. Md. 2002).
9

It has been noted by Judge Andre Davis, then of this Court,
that the above quoted discussion of “exposure” that occurs
during operations or continues to occur after operations is not
a clear as it could be.

Nat’l Union Fire Ins. Co. of

Pittsburgh, Pa v. Porter Hayden Co., 331 B.R. 652, 667 n.20 (D.
Md. 2005) (Porter Hayden I).

Judge Davis suggests that “[i]t

would have been more clear to refer to ‘injury’ that occurs or
continues to occur after operations were complete.”

Id.

Judge

Davis then pointed to other language in Judge Messitte’s opinion
confirming that it was “injury” that was meant:
“It remains true that asbestos-related injury can
occur at any time from exposure onward and that it
cannot be said with certainty when or to what extent
it actually occurs. But whatever injury — theoretical
or real — is assumed to have occurred after Wallace
and Gale's operations were completed will always — by
definition — be covered by the completed operations
clause. The injury occurs after operations were
completed. Nor does it matter whether an injury is
viewed as occurring both upon initial exposure before
operations are completed as well as thereafter. The
portion of the injury extending beyond completion
would still, by definition, occur post-operations and
thus remain subject to the completed operations hazard
aggregate limit.
By the same token — to the extent that injuries,
beginning with exposure, may be considered as
occurring before operations were completed they would,
by definition, be excluded from the completed
operations clause. There would be no aggregate limit
under the policies then in effect.”
Id. (quoting In re The Wallace & Gale Co., 275 B.R. at 238).

10

Judge Messitte’s opinion in Wallace & Gale was affirmed by
the Fourth Circuit.
Cir. 2004).

In re Wallace & Gale Co., 385 F.3d 820 (4th

WECCO attempts to argue that the Fourth Circuit

affirmed Judge Messitte’s decision as to the result but not as
to the reasoning, suggesting that the Fourth Circuit focused
entirely on “exposure” to asbestos, as opposed to injury.
No. 222 at 14-17.

ECF

WECCO proffers that, unlike the decision from

this Court, the Fourth Circuit opinion, “does not say, as
[Certain Insurers] contend, that the aggregate limits of
liability would apply if a plaintiff’s only exposure is to the
insured’s ‘operations’ that pre-date the inception dates of
[Certain Insurers’s] policies.”

Id. at 17.

WECCO then argues

that, because this Court is not bound by Judge Messitte’s
opinion in Wallace & Gale or Judge Davis’s opinion in Porter
Hayden I, but only by the Fourth Circuit’s decision in Wallace &
Gale, that this Court is now free, in the instant case, to
ignore its prior two decisions, at least as to the
interpretation of the Completed Operations Issue.
The simple answer to that argument is that one of the
outcomes of this Court’s decision in Wallace & Gale was the
following declaration: “Policies in effect wholly after Wallace
& Gale completed installing asbestos-containing materials shall
be subject to aggregate limits as set forth in the policies.”
275 B.R. at 250.

The Fourth Circuit, when it held that the
11

“orders of the district court appealed from are accordingly
AFFIRMED,” 385 F.3d at 836, clearly understood the substance and
import of the orders it was affirming.

Immediately after

quoting the language above3 as the summary of the district
court’s holding as to the Completed Operations Issue, the Fourth
Circuit declared: “[a]s a result, the insurers who issued
general liability policies to Wallace & Gale for time periods
wholly after Wallace & Gale completed its asbestos installation
work will only be liable to the extent of the aggregate limit
contained in the policy.”
(emphasis added).

Id. at 826 (citing 275 B.R. at 250)

This Court finds the Fourth Circuit’s opinion

wholly in accord both in result and in reasoning with the
decision issued by this Court.
Thus, while WECCO has certainly demonstrated persistence,
there is no merit, whatsoever, to its request for certification
of questions of law to the Maryland Court of Appeals.

As noted

above, in Wallace & Gale, the Fourth Circuit addressed and
resolved these same two legal issues in a near identical
context.

As to the Allocation Issue, the Fourth Circuit held

that the pro rata rule is the law of Maryland following the
Maryland Court of Special Appeals’ Utica Mutual decision.
F.3d at 830.

385

Noting that a federal court can depart from a

3

Supra at 9 (paragraph beginning, “If a claimant’s initial
exposure . . .”).
12

State intermediate appellate decision only if “convinced” that
the State’s highest court would not follow that decision, the
court concluded that it was not so convinced, rejecting the same
arguments that WECCO makes here.

Id. at 831-32.

On the

Completed Operations Issue, the Fourth Circuit affirmed the
decision of this Court which adopted the interpretation now
urged by Certain Insurers.

Id. at 833.

Significantly, in affirming this Court’s resolution of
these two issues in Wallace & Gale, the Fourth Circuit rejected
the urging of the insured to certify these same questions to the
Maryland Court of Appeals.

Id. at 836 n.3.

Judge Davis, when

presented one year later with an invitation to certify these
same two questions to the Maryland Court of Appeals, concluded
that “it would be an abuse of discretion for this court to
certify issues of state law to the Maryland Court of Appeals
that the Fourth Circuit specifically declined to certify in
[Wallace & Gale].”

Porter Hayden I, 331 B.R. at 658 n.8.

The

Court finds it would still be an abuse of discretion to do so.
WECCO’s alternative remedy suggested in its “Supplemental
Brief” has even less merit.

WECCO posits that, “because General

[Insurance], the forum-shopping plaintiff that originally sought
to avoid the jurisdiction of the Maryland state courts, is no
longer a party to the dispute, and because the exclusively state
law claims pending would be more completely addressed in a state
13

court . . . [i]n the alternative [to certification], this Court
should stay any further proceedings in this case and defer to
the jurisdiction of the Superior Court for the District of
Columbia in which a parallel and nearly identical action is
pending.”

ECF No. 238-1 at 8.

Aside from the irony of WECCO

making this argument by casting General Insurance as a “forum
shopping plaintiff,” this Court has already rejected this
precise alternative, concluding that “[i]t is difficult to see
how it is more efficient for a D.C. court to resolve matters of
Maryland law which WECCO asserts D.C. courts have never reached,
than for this Court to resolve issues it has previously
confronted and addressed.”

ECF No. 146 at 8.

This Court also

noted, that “the Fourth Circuit has recognized that a particular
state’s interests are ‘better served by having the coverage
issues decided by a federal court sitting in [that state],
rather than in a state court sitting in [a different state].’”
Id. at 8 n.6 (quoting Great Am. Ins. Co. v. Gross, 468 F.3d 199,
209 (4th Cir. 2006)).
III. INSURERS’ MOTION FOR PARTIAL SUMMARY JUDGMENT / WECCO’s
MOTION TO STRIKE
In their motion for partial summary judgment, Certain
Insurers seek the following declarations:
(1) Maryland law governs the interpretation of the
insurance policies issued or allegedly issued to WECCO
by Certain Insurers;
14

(2) Bodily injury that occurs during an insurer’s
policy period, and that arises from an operation that
concluded prior to the inception of the policy period,
falls within the “completed operations hazard” of that
policy and therefore is subject to the aggregate
limits of each such policy;
(3) To avoid the application of the aggregate limit of
any particular policy, WECCO bears the burden of
proving that the bodily injury that occurred during
that policy’s policy period arose from asbestos
exposure during a WECCO operation that was ongoing
during such policy period; and
(4) The bodily injuries alleged in the Good claim and
the Cunningham claim are subject to the aggregate
limits of Certain Insurers’ policies.
ECF No. 220 at 1-2.

As to the first declaration, WECCO has

apparently now conceded that Maryland law applies to the
policies at issue in that WECCO failed to make any arguments
regarding choice of law in its opposition and affirmatively
sought certification of the questions at issue to the Maryland
Court of Appeals.
As to the remaining three declarations, the legal
underpinning of each rests on the resolution of the Completed
Operation Issue.

In opposing Certain Insurers’ motion for

partial summary judgment, WECCO repeats all of its arguments as
to why this Court’s rulings on that issue in Wallace & Gale and
Porter Hayden I were wrongly reached and how the Fourth
Circuit’s resolution of the issue in Wallace & Gale is somehow
different than this Court’s resolution.

For the reasons stated

above, this Court rejects those arguments and finds the Fourth
15

Circuit’s decision in Wallace & Gale both binding on this issue
and in line with the interpretation urged by Certain Insurers in
their motion.
In addition to its unsuccessful legal assault, WECCO also
challenges the factual basis for Certain Insurers’ motion.

Much

of this same challenge is advanced in WECCO’s motion to strike,
ECF No. 223, and it falls into three main categories.

First,

WECCO challenges the completeness and authenticity of the policy
materials submitted with the summary judgment motion.

Second,

WECCO challenges the admissibility of evidence offered to
establish the time at which WECCO stopped selling or installing
materials containing asbestos.

Third, WECCO challenges the

submission of materials from the Good and Cunningham litigation.
The Court finds each of these challenges to be wholly without
merit.
As to the materials submitted by Certain Insurers that
relate to the terms of their respected policies, WECCO argues
that those materials are not properly authenticated and contain
inadmissible hearsay.

Certain Insurers respond that the policy

documents are authenticated as “ancient documents” under Rule
901(a)(8) of the Federal Rules of Evidence.

To be authenticated

under that provision, a document must be at least 20 years old
when it is offered, must have been found in a place where, if
authentic, it would likely have been located, and is in a
16

condition that creates no suspicion about its authenticity.
Fed. R. Evid. 901(a)(8).

Certain Insurers also contend that

these documents are excepted from the hearsay rule under Rule
803(16) which excepts “statement[s] in a document that is at
least 20 years old and whose authenticity is established.”

Fed.

R. Evid. 803(16).
The policy documents submitted by Certain Insurers clearly
fall within these rules.

They are undeniably more than 20 years

old and, in fact, WECCO alleges in its Third Party Complaint
that these policies are more than 20 years old.

See, e.g., ECF

No. 157 ¶ 29 (alleging that U.S. Fire issued a policy covering
the period from May 1, 1975, to April 1, 1976).
issue was written after 1985.

No policy at

See id. ¶ 22.

The policy documentation was also found where it likely
would have been found if authentic.

For example, as to the U.S.

Fire policy, Certain Insurers presented the affidavit of Michael
Stacchi, a Claims Manager for the RiverStone Group (RiverStone),
to explain the search that was conducted for policy documents.
ECF No. 220-28.

RiverStone acts as the claims administrator on

behalf of U.S. Fire and Stacchi is the person primarily in
charge of handling asbestos claims against WECCO for U.S. Fire.
Id. ¶¶ 3, 4.

He submitted with his affidavit policy documents

“copied from the business records of US Fire concerning WECCO,
which are currently in the custody of RiverStone” and he avers
17

that those documents “constitute the best and most complete
information concerning the terms and limits of the WECCO Primary
Policy available from US Fire’s business records.”

Id. ¶ 7.

In addition, U.S. Fire’s corporate designee, Craig Brown,
who is an employee of RiverStone, described the multiple
searches conducted for policy documents.
Dep.).

ECF No. 225 (Brown

He explained that the policy documents produced are a

“reconstruction of the policy,” generated from the information
contained on the declaration page for the policy.

Id. at 47.

Brown also explained that the original U.S. Fire policy would be
in WECCO’s possession.

Id. at 48.

This is typical of all of

the policies at issue, both as to the possession of the
originals and their “reconstruction” by Certain Insurers.

See

ECF No. 225-1 at 52-55 (Dep. of Lawrence Farber explaining, in
reference to The Hartford policy, that, while the original
policy belongs to the insured, the insurer maintains the
declaration page and non-form endorsements and reconstructs the
policy by assembling the forms identified on the declaration
page).

Brown further testified that requests were made of WECCO

and its broker for its copies of the policies, Brown Dep. at 49,
but, apparently, those requests did not result in the production
of any policies by WECCO.
As to any suspicion as to their authenticity, WECCO
proffers no substantive argument.
18

While it complains that the

produced policies are incomplete, it has identified no material
terms of the policies that it believes might be missing.

As

noted, WECCO has produced no policy documents of its own of any
kind and has acknowledged that it has no copies of the policies.
See ECF No. 222 at 10 (complaining that Certain Insurers
“submitted an incomplete record of the policies at issue (and
which [WECCO] itself does not have)”).

Certain Insurers have

made the reasonable observation that, if the policies produced
by the insurers are not sufficient to establish the terms of the
policies, than WECCO cannot meet its burden to establish any
coverage at all.

In response to that observation, WECCO

protests that it has no burden at this stage in the litigation
to prove any element of its claims.

While that may or may not

be true, WECCO certainly has the burden in challenging the
admissibility of the proffered documents to offer some reason or
basis why it believes that the copies of the policies submitted
by Certain Insurers materially differ from the originals which
it once had but did not retain.

See Tyson v. Jones & Laughlin

Steel Corp., 958 F.2d 756, 761 (7th Cir. 1992) (noting “it is
the opponent of the evidence who bears the burden of showing
that a genuine issue of authenticity exists”).
Perhaps of most significance, it is abundantly clear that
this action has never been about the content or language of the
policies.

There has never been a dispute that each of the
19

policies in question included a “completed operations hazard”
provision subject to aggregated limits.

Instead, the dispute

has been over the legal interpretation of that provision.

See

ECF No. 157, WECCO’s Third Party Complaint, Counterclaim, and
Cross-Claims ¶¶ 41, 46-47 (describing the dispute between WECCO
and its insurers as relating to the scope of the completed
operations hazard provisions in the policies, not as to whether
the policies contained such provisions).

Nor has WECCO has ever

presented any substantive argument that the particular language
used in the completed operations hazard provisions in the
Certain Insurers’ policies somehow differed in any material way
from the language in the provisions interpreted in Wallace &
Gale or Porter Hayden I.
The second category of challenged materials, i.e., those
related to the date on which WECCO stopped selling and
installing asbestos-containing materials, was submitted through
the affidavit of Harvey Lee.

ECF No. 220-2.

Lee is an attorney

representing St. Paul and he attaches to his affidavit
transcripts of depositions of WECCO employees or former-WECCO
employees Michael Gibbons, Ernest Whetzel, John Crumit, and
William Stonebraker, taken in various underlying asbestos
lawsuits.

Gibbons was an officer of WECCO from at least August

1995 through November 2011, and testified as WECCO’s president
and/or corporate designee in the three depositions submitted.
20

ECF Nos. 220-7, 220-11 and 220-12.

In each deposition, Gibbons

testified that, by the time he started working for WECCO in
1974, WECCO had stopped selling and installing asbestos
products.

See, e.g., 5/22/06 Dep. at 76, ECF No. 220-11.

Whetzel and Crumit are former employees of WECCO who were
involved in the decision to stop selling asbestos-containing
products and the implementation of that decision.

Whetzel

testified that at some point in 1971, based on overwhelming
evidence that asbestos was hazardous, he sent out a letter to
WECCO customers that WECCO was discontinuing selling asbestoscontaining products and that, within three or four months of the
sending of that letter, all sales of those products were phased
out and “everything had to be asbestos-free.”
10-11, ECF No. 220-8.

3/6/96 Dep. at 5,

Crumit testified that, on his order,

asbestos products were removed from the WECCO warehouse “in the
early ‘70s.”

11/17/88 Dep. at 177, ECF No. 220-10.

In a March

31, 2000, letter from WECCO’s counsel to St. Paul, WECCO’s
counsel represented that Whetzel and Crumit were deceased.
No. 233-1.

ECF

Stonebraker was employed by WECCO from 1959 to 1988

and WECCO’s counsel opined in his March 31, 2000, letter that
Stonebraker was, to his knowledge, the only officer or director
of WECCO that was still alive at that time who had worked for
WECCO prior to 1972.

Id.

Stonebraker testified that WECCO took

21

the asbestos out of its products sometime before 1972.

2/29/00

Dep. at 37, ECF No. 220-9.
WECCO argues that these deposition transcripts are both
unauthenticated and contain inadmissible hearsay.

On the issue

of authentication, deposition transcripts are selfauthenticating by virtue of the reporter’s certificate of
authenticity.

Deakins v. Pack, 957 F. Supp. 2d 703, 754 (S.D.

W. Va. 2013).

As to WECCO’s hearsay objections, at least as to

the testimony of Gibbons and Stonebraker, that testimony is
admissible as admissions of a party-opponent under Fed. R. Evid.
801(d)(2)(A)-(D).

WECCO does not offer any meaningful challenge

to the conclusion that Stonebraker’s and Gibbons’ statements
constitute admissions of a party-opponent, making no reply,
whatsoever, as to the testimony of Stonebraker and, as to
Gibbons, suggesting only that his testimony is “inadmissible
hearsay because Certain Insurers have failed to demonstrate that
Mr. Gibbons is unavailable to testify at deposition in this
matter.”

ECF No. 236 at 5 n.5.4

The unavailability of the

declarant as a witness, however, is not required for
admissibility under Rule 801(d)(2).

Globe Savings Bank, F.S.B.

v. U.S., 61 Fed. Cl. 91, 94-95 (2004).

4

Remarkably, WECCO also argues that “[l]ikewise, Certain
Insurers cannot demonstrate that Messrs. Whetzel and Crumit are
unavailable,” despite the fact that its own counsel represented
in 2000 that they were deceased.
22

As to Whetzel and Crumit, Certain Insurers argue that their
deposition testimony is admissible under the residual exception
to the hearsay rule set out in Rule 807 of the Federal Rules of
Evidence.

The Court need not resolve the admissibility of their

deposition testimony at this time, however, as the testimony of
Gibbons and Stonebraker more than adequately establishes that
WECCO had ceased the sale or installation of asbestos products
by 1972.

The Court also notes that, just as on the issue of

what law governs the policies and any questions concerning the
content of the policies, there is no real dispute as to when
WECCO stopped using asbestos products.

Not only has WECCO

repeatedly asserted in litigation that it stopped using those
products by 1972, it made similar representations when applying
for the insurance policies at issue here.

See, e.g.,

Application for Umbrella Liability Policy, The Harford, ECF No.
233-2 at 3 (indicating that WECCO has discontinued “materials
containing asbestos fiber”).
The third category of challenged exhibits consists of
filings in the Good and Cunningham litigation which Certain
Insurers submitted through Lee for the purpose of establishing
that any exposure to WECCO products experienced by Mr. Good or
Mr. Cunningham occurred prior to the inception of any of the
insurance policies at issue here.

As to Mr. Good, Certain

Insurers submit his answers to interrogatories in which he
23

states that his exposure to WECCO products was limited to his
work on a particular jobsite, “Jefferson Plaza in approximately
1969 - 1970,” ECF No. 220-14 at 91, as well as a pleading filed
by WECCO stating that Jefferson Plaza was the only jobsite where
Mr. Good alleged he was exposed to WECCO products.

ECF No. 220-

22 at 4-5, 8 (a pleading opposing consolidation of Mr. Good’s
claims in a particular trial group).

In addition, Lee submits

deposition testimony from two of Mr. Good’s alleged coworkers
testifying about Mr. Good’s presence on the Jefferson Plaza
project.

ECF Nos. 220-15 (6/27/13 Dep. of Waller Jenkins) and

220-16 (6/25/13 Dep. of G. Wayne Mullin).

As to Mr. Cunningham,

Lee submitted a pleading filed by Mr. Cunningham’s wife and
surviving children clarifying that the only exposure he had to
WECCO “occurred in 1963 and 1965 into 1966” and stating that
this “is consistent with the evidence adduced during discovery
in this case.”

ECF No. 220-18 (Pls.’ Amendment of Inactive

Civil Dkt. Information Form dated 3/28/14).

With that pleading,

Lee also attached deposition testimony from three of
Cunningham’s coworkers relating to Mr. Cunningham having worked
at one project in D.C. in 1963 and at another in 1965 and 1966.
ECF Nos. 220-19 (10/17/13 Dep. of Don Hockman); 220-20 (9/24/13
Dep. of Eugene Long); 220-21 (10/30/13 Dep. of Donald
Burroughs).

24

WECCO offers the same authentication and hearsay objections
to these documents.

The depositions, as stated above, are

authenticated by the stenographer’s certification.

The Court is

satisfied that the other pleadings are authenticated by the
electronic-filing stamp as being pleadings in these underlying
cases.5

In addition, if they are not the authentic pleadings

that were filed in the underlying cases, WECCO is certainly in
the position to challenge that authenticity having been a party
in those actions.
As for the hearsay objections, Certain Insurers note that
the depositions and the other pleadings are not offered for the
truth of the matter asserted, i.e., that Mr. Good and Mr.
Cunningham were actually exposed to WECCO products on certain
dates, but, instead, are offered “to show the dates on which
Messrs. Good and Cunningham were allegedly exposed to asbestoscontaining materials that were allegedly supplied and installed

5

WECCO makes the somewhat misguided argument that Certain
Insurers are advancing “the remarkable proposition that all
documents filed with a court are automatically deemed authentic.
Were that the rule, then authentication would cease to exist as
a threshold issue for admissibility because all exhibits are
filed with the court at the summary judgment stage.” ECF No.
236 at 3-4. Here, authenticity simply means that this is the
document that was filed in the underlying action. If, for
example, a deed was filed in one action and a copy of that deed
with a filing stamp was submitted in a second action, the
authentication arising from the filing stamp simply
authenticates that this is the document that was filed in the
prior proceeding. It does not authenticate its status as a
deed.
25

by WECCO.”

ECF No. 233 at 27.

response to this argument.

In its reply, WECCO makes no

As for the pleading filed by WECCO

in the Good action, that constitutes an admission of a party
opponent.
Having determined the admissibility of the challenged
exhibits, the resolution of Certain Insurers’ entitlement to the
remaining requested declarations is straightforward.

Given that

WECCO has proffered no material difference between the completed
operations hazard provisions in the policies at issue here and
those at issue in Wallace & Gale and Porter Hayden I,
entitlement to the second prayed-for declaration regarding the
completed operations hazard is determined by this Court’s
decisions in Wallace & Gale and Porter Hayden I and the Fourth
Circuit’s decision in Wallace & Gale.

That declaration will

issue.
The resolution of Certain Insurers’ entitlement to the
third prayed-for declaration, i.e., that WECCO bears the burden
of establishing an ongoing WECCO operation at the time of
injury, is guided by this Court’s decision in National Union
Fire Insurance Company of Pittsburgh v. Porter Hayden Company,
Civ. No. 03-3408, 2012 WL 734170 (D. Md. Mar. 6, 2012) (Porter
Hayden II).

In Porter Hayden II, the insured sought a

declaration that the insurer bears the burden of demonstrating
that a claim falls under the completed operations hazard and
26

thus is subject to the aggregate limit on liability.

In

rejecting that position, Judge Catherine Blake began by noting
that, under Maryland law, the insured “‘has the burden of
proving every fact essential to his or her right to recover.’”
Id. at *2 (quoting In re Wallace & Gale, 275 B.R. at 230).
While insurers bear the burden of establishing exclusions to
coverage or otherwise limiting coverage, Judge Blake found that
“[c]lassification of a claim [] is a matter of showing
entitlement to coverage – not a defense or limitation thereto.”
Id.

Accordingly, this Court held that:
Insofar as Porter Hayden argues that it was conducting
operations that resulted in the release of asbestos
fibers . . . during the relevant policy periods, then
the burden is on Porter Hayden to prove that. Porter
Hayden, of course, is in the best position to make
this showing. The court will not require the Insurers
to demonstrate the absence of ongoing operations
during the policy periods.

Id.

For the same reason, this Court finds that, if WECCO

contends that it was conducting operations involving asbestos at
the time of a particular injury and compensation for that injury
falls outside of the aggregate limit, then WECCO bears the
burden of establishing that operations were ongoing at the time.
WECCO does not directly challenge that conclusion.
Instead, it attempts to shift the focus to an issue not raised
in Certain Insurers’ motion, i.e., whether the aggregate limits
of the policies in question have actually been exhausted.
27

WECCO

maintains that “Certain Insurers have the burden to prove the
defense of ‘exhaustion’ of the aggregate limits of liability if
they seek to avoid payment on this basis.”

ECF No. 222 at 28.

While that assignment of the burden on exhaustion may be
correct, where that burden falls is not germane to Certain
Insurers’ motion.

The declaration they seek relates only to the

burden to show a claim does not count towards the aggregate
limit, not whether previous claims have exhausted that limit.
As to the declaration that the injuries alleged in the Good
and Cunningham claims are subject to the aggregate limits of
Certain Insurers’ policies, that determination naturally follows
from the conclusion that Mr. Good’s and Mr. Cunningham’s alleged
exposure to asbestos-containing WECCO products was at least
several years prior to the issuance of any of the Certain
Insurers’ policies.

Furthermore, any bodily injuries suffered

by these men during the effective dates of policies issued by
Certain Insurers were suffered after WECCO ceased any asbestosrelated activities.

Thus, the claims of Messrs. Good and

Cunningham fall within the completed operations hazard of those
policies and are subject to the aggregate limits.
Aside from its evidentiary challenges, WECCO makes no
argument regarding this requested declaration.

Instead, it

suggests that the Court should “decline Certain Insurers’
request to issue advisory rulings on [these] coverage questions
28

. . . [as t]here is no present ‘controversy’ concerning those
cases for the Court to resolve.”

ECF No. 222 at 29.

To the

contrary, the Good and Cunningham cases are exemplars of
precisely the type of cases at the center of the coverage
controversy raised in this action.
For these reasons, Certain Insurers’ Motion for Partial
Summary Judgment will be granted in its entirety.
IV. PCIGC’s MOTION FOR PARTIAL SUMMARY JUDGMENT
As noted above, PCIGC is a creature of the Maryland General
Assembly and is assigned limited liability as to certain
“covered claims” in the event of the insolvency of certain types
of insurers.

See Md. Code Ann., Ins. § 9-301 et seq.

To be a

covered claim, it must, inter alia, be presented to PCIGC on or
before the last date fixed for the filing of claims in the
domiciliary delinquency proceeding.

Id. § 9-301(d)(1)(ii).

Furthermore, covered claims do not include claims “filed with
[PCIGC] after the earlier of: 1. 18 months after the date of the
order of liquidation; or 2. the filing date set by the court for
the filing of claims against the liquidator or receiver of an
insolvent insurer.”

Id. § 9-30(d)(4)(1).

As explained by the

Maryland Court of Appeals, the filing deadline for covered
claims:
represents a legislative determination that PCIGC is
not liable for every claim that could be brought
against the insurance carrier had it not become
29

insolvent. The deadline makes it possible for PCIGC
to reasonably anticipate its potential liability which
in turn allows it to participate in the liquidation
proceedings of the insolvent insurer and assess its
members accordingly. The deadline serves the
important purpose of providing finality to both the
liquidation proceeding and PCIGC's potential liability
resulting from the insolvency of an insurance carrier.
Med. Mut. Liab. Ins. Soc'y of Md. v. Goldstein, 879 A.2d 1025,
1033 (Md. 2005).
WECCO has alleged that PCIGC is liable for the insolvencies
of Centennial Insurance Company (Centennial) and American Mutual
Insurance Company (American Mutual).

Relying on the language

quoted above that limits the class of covered claims, PCIGC is
seeking in its motion a declaration that it is liable for none
of the claims from American Mutual as the bar date for claims
against American Mutual was March 9, 1990, and WECCO provided no
notice of any claims prior to that date.

As to Centennial, that

insurer was liquidated on April 27, 2011, and, accordingly, the
eighteen month claiming period expired on October 27, 2012.
WECCO provided notice of claims to PCIGC both before and after
that October 27, 2012, deadline.

In its motion, PCIGC is only

seeking a declaration of non-coverage as to the claims for which
notice was given after that date.
In opposing this motion, WECCO makes what is perhaps its
most spurious argument thus far in this litigation.

30

Without

challenging any of the pertinent facts,6 WECCO argues that
applying the statute as it is written, i.e., requiring claims to
be presented on or before the bar date or 18 months after the
order of liquidation in order to be covered claims, somehow
violates equal protection under Article 24 of the Maryland
Declaration of Rights.

WECCO suggests that “PCIGC [is] ask[ing]

this Court to treat similarly situated Asbestos Suit claims
differently with no rational basis to do so.”

ECF No. 247 at 6.

Equal protection, of course, is guaranteed to persons, not
claims.

Assuming that WECCO is asserting that the statute that

created PCIGC treats persons with untimely claims differently
than persons with timely claims, the statute would still easily
survive a constitutional challenge.

Because the statute neither

interferes significantly with a fundamental right nor implicates
a suspect classification, it is subject to review under a
“rational basis” level of scrutiny.
571, 603-04 (Md. 2007).

Conaway v. Deane, 932 A.2d

As such, the classification will pass

constitutional muster so long as it is “rationally related to a
legitimate governmental interest.”
102, 108 (Md. 1992).

Murphy v. Edmonds, 601 A.2d

The Maryland Court of Appeals in

6

Ever anxious to delay the resolution of this litigation, WECCO
suggests that the Court should defer ruling on this motion to
permit it to conduct discovery without suggesting what discovery
it needs to take. ECF No. 247 at 8. The Court notes that the
only factual issue raised in this motion related to claims
submitted by WECCO to PCIGC.
31

Goldstein, as noted above, has already articulated the
legitimate government interest advanced by the statute.
PCIGC’s motion for partial summary judgment will be
granted.
V. MOTION FOR VOLUNTARY DISMISSAL OF GENERAL
General Insurance and WECCO entered into a confidential
settlement agreement on December 15, 2014, resolving all claims
between them in this action and the parallel action in the D.C.
Superior Court.

Pursuant to that agreement, General Insurance

has or will transfer the settlement amount to the qualified
settlement fund established by WECCO.

In exchange, WECCO has:

(1) withdrawn all outstanding tenders of claims to General
Insurance for defense and indemnity; (2) agreed not to tender
any further claims to General Insurance; and (3) agreed that any
judgment or award obtained by WECCO against any non-settling
insurer shall be automatically reduced by the amount, if any,
that a Court determines General Insurance would have been liable
to pay that insurer as a result of a contribution claim made by
that insurer against General Insurance.

In their joint motion,

General Insurance and WECCO are seeking an Order that: (1) all
claims by and between General Insurance and WECCO in this action
are dismissed with prejudice and without effect on WECCO’s
claims against the remaining parties; (2) any judgment or award
obtained by WECCO against any other insurer shall be
32

automatically reduced by the amount, if any, that a Court
determines by judgment General Insurance would have been liable
to pay such other insurer(s); and (3) WECCO be substituted for
General Insurance as the proper counterclaim defendant in this
case.
Certain Insurers responded to the joint motion, indicating
that they have no objection to the relief requested so long as
WECCO is required to participate, in real time, in the defense
and indemnity of WECCO in the Asbestos Claims to the same extent
that General Insurance would be obligated to participate under
Maryland law and that the Court order WECCO to hold the funds from
its settlement with General Insurance in trust and that the
settlement funds be used solely for defense and indemnity of
Asbestos Claims and be paid in accordance with General Insurance’s
legal share of defense and indemnity obligations.

Certain Insurers

further specify that “[c]onsistent with Maryland law, WECCO should
pay a pro rata share of defense and indemnity costs as those costs
are incurred, just as General [Insurance] would have paid had it
remained a party.”

ECF No. 240.

In replying to that response,

WECCO continues its protest against the recognition of Maryland’s
adoption of the pro rata rule and encores its request that this
Court certify the question to the Maryland Court of Appeals or stay
this action in deference to the D.C. Action.

33

The Court will grant the motion for voluntary dismissal, as
modified by the Certain Insurers’ response.

VI. CONCLUSION
For the above stated reasons, the Court will deny WECCO’s
motion to certify questions of law to the Maryland Court of
Appeals, will deny WECCO’s motion to strike, will grant the motions
for partial summary judgment filed by Certain Insurers and PCIGC,
and will grant the motion for voluntary dismissal filed by General
Insurance and WECCO.

The Court will also request a joint status

report to be submitted within 10 days from this date setting out
what remains to be resolved in this action.

A separate order will

issue.

___________/s/_________________
William M. Nickerson
Senior United States District Judge

DATED: May 26, 2015

34