Zurich American Insurance Company v. Insurance Company of North America

Filing 99

MEMORANDUM AND ORDER. (See Full Order.) IT IS HEREBY ORDERED that Pacific Employers Insurance Company's Motion to Dismiss Party Pursuant to Joint Stipulation [# 85 ] is GRANTED. IT IS FURTHER ORDERED that Zurich American Insurance Company' ;s Motion for Summary Judgment [# 86 ] is DENIED, and that Insurance Company of North America's Motion for Summary Judgment [# 83 ] is GRANTED as set forth above. IT IS FURTHER ORDERED that Anheuser-Busch Companies, LLC's Motion for Summar y Judgment [# 80 ] is DENIED. IT IS FINALLY ORDERED that a telephone scheduling conference is set for Monday, December 19, 2016 at 11:00 a.m. Plaintiff's counsel is responsible for placing the call and having all parties on the line before cont acting my chambers at 314-244-7520. Counsel for ZAIC and A-B must meet and confer in advance of the conference and file a joint proposed scheduling plan for all matters necessary to the resolution of this action seven (7) days prior to the conference. Signed by District Judge Catherine D. Perry on 11/15/2016. (CBL)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
ZURICH AMERICAN INSURANCE
COMPANY,

)
)
)
Plaintiff,
)
)
vs.
)
)
INSURANCE COMPANY OF NORTH )
AMERICA, et al.,
)
)
Defendants.
)

Case No. 4:14 CV 1112 CDP

MEMORANDUM AND ORDER
Plaintiff Zurich American Insurance Company (ZAIC) brought this suit for
equitable contribution, subrogation, and unjust enrichment against defendants
Insurance Company of North America (INA), Anheuser-Busch, LLC (A-B), and
Pacific Employers Insurance Company. All parties have jointly stipulated that
defendant Pacific Employers should be dismissed from this suit, so Pacific’s
motion to dismiss shall be granted.
A-B had insurance policies with both ZAIC and INA at various times from
1967 – 2008. In 2008, ZAIC represented A-B’s interests in a lawsuit involving
asbestos exposure, defending under a reservation of rights. ZAIC reached a
settlement on A-B’s behalf with the plaintiff in that case, and ZAIC paid the full
settlement amount. ZAIC then brought this suit to recover a pro rata share of the

settlement amount from INA for the relevant time periods when INA provided
insurance coverage to A-B. After INA filed its answer asserting an affirmative
defense of failure to include all necessary and/or indispensable parties including AB, ZAIC filed an amended complaint adding A-B as a defendant.
In agreement with both ZAIC and INA, but not with A-B, I conclude that
under Missouri law ZAIC and INA’s obligations are determined by their pro rata
share. Each insurance company’s pro rata share is based on the coverage period
for each insurer, or each insurer’s time on the risk. The settlement amount and
costs should be divided by the number of years the asbestos plaintiff was exposed,
with ZAIC and INA each paying for the years they provided coverage. But when
the settlement is prorated in this way, INA’s pro rata share for each year is less
than its annual deductible. INA cannot therefore be liable to ZAIC for either
contribution or subrogation.
Although the issue of whether ZAIC is entitled to relief against A-B is not
before me now, A-B has not established that it is entitled to summary judgment of
ZAIC’s claims against it. A-B’s arguments are not sufficient to preclude a claim in
equity by ZAIC concerning either A-B’s obligation under the deductible
endorsements of the INA policies, or its obligation for the uncovered years when
the INA policy exclusion left A-B with no asbestos liability coverage.

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All parties assert that this case can be resolved on summary judgment
motions and have filed motions seeking such relief. But complete relief cannot be
granted on motions for summary judgment because ZAIC’s motion is not directed
to its claim against A-B. Because I am denying A-B’s motion for summary
judgment, ZAIC’s claim against A-B is still pending.
I.

Background
In 2008, the estate of the wife of a former A-B employee filed a wrongful

death suit against A-B.1 The suit alleged that the decedent wife contracted
mesothelioma as a result of her husband’s exposure to asbestos during his
employment as a mechanic with A-B, and her subsequent laundering of his work
clothes. The period of alleged exposure occurred between the date of their
marriage, July 30, 1971, and the date of the employee husband’s retirement from
A-B, July 31, 1996. A-B tendered defense of this suit to insurer ZAIC, who agreed
to provide A-B with a defense subject to a reservation of rights.2 The parties
settled during a 2014 mediation for $1.5 million – an amount all parties stipulate
was reasonable.

1

Cotter v. Am. Insulation Corp., Docket No. MID L 9211 08 (N.J. Super. Ct. Law Div.).
ZAIC initially agreed to participate in the defense of the underlying lawsuit “under a full
reservation of rights.” Joint Stipulation of Fact Ex. 6 at 2, ECF No. 79-6. Later ZAIC reserved
its right to contribution in email correspondence. Joint Stipulation of Fact Ex. 8 at 2, ECF No.
79-8. ZAIC claims agent Brett Tatara also states he verbally reserved all rights of contribution
against INA and A-B. Joint Stipulation of Fact Ex. 11, Tatara Dep. 75:3-8, ECF No. 79-11.
2

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A-B purchased Policy No. GA 85-79-000 from ZAIC for the period of July
1, 1967 to July 1, 1972 for personal injury liability and excess liability coverage,
among other coverages. Subsequently, A-B purchased Policy No. GA 87-13-500
for the period of July 1, 1972 to July 1, 1980 from ZAIC with similar personal
injury and excess liability coverage. Both these policies state in part:
Zurich will pay on behalf of the insured all sums which the insured shall
become legally obligated to pay as damages because of … personal injury
… to which this insurance applies.
Joint Stipulation of Fact Ex. 2 at 4, ECF No. 79-2; Ex. 3 at 4, ECF No. 79-3.
They also contain provisions on “Other Insurance” which state:
When both this insurance and other insurance apply to the loss on the same
basis, whether primary, excess or contingent, Zurich shall not be liable under
this policy for a greater proportion of the loss than stated in the applicable
contribution provision below:
(A) Contribution by Equal Shares. If all of such other valid and
collectible insurance provides for contribution by equal shares, Zurich
shall not be liable for a greater proportion of such loss than would be
payable if each insurer contributes an equal share until the share of
each insurer equals the lowest applicable limit of liability under any
one policy or the full amount of the loss is paid.
Joint Stipulation of Fact Ex. 2 at 20, ECF No. 79-2.
Beginning July 1, 1980, and continuing for the next seventeen consecutive
years, A-B was insured by INA under Policy No. ISG 1065 for bodily injury
liability. Starting July 1, 1989, the INA policy included an asbestos exclusion,
which the parties stipulate bars liability for INA past that date. Each INA policy is

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subject to a deductible endorsement. From July 1, 1980, to July 1, 1986, the
deductible amount was $250,000. Thereafter and for the subsequent three years at
issue, the deductible amount was $1 million. The INA policy’s personal injury
coverage includes an exclusion for:
bodily injury or property damage arising out of the discharge, dispersal,
release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic
chemicals, liquids or gases, waste materials or other irritants, contaminants
or pollutants into or upon land, the atmosphere or any water course or body
of water.
Joint Stipulation of Fact Ex. 4 at 8, ECF No. 79-4.
II.

Summary Judgment Standard
In determining whether to grant summary judgment, the court views the

facts – and any inferences from those facts – in the light most favorable to the
nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475
U.S. 574, 587 (1986). The movant bears the burden of establishing that (1) it is
entitled to judgment as a matter of law and (2) there are no genuine issues of
material fact. Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986). Once the movant has met this burden, however, the nonmoving party may
not rest on the allegations in its pleadings but must, by affidavit and other
evidence, set forth specific facts showing that a genuine issue of material fact
exists. Fed. R. Civ. P. 56(c)(1), (e). Where a factual record taken as a whole could

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not lead a rational trier of fact to find for the nonmoving party, there is no genuine
issue for trial. Matsushita, 475 U.S. at 587.
“[T]he filing of cross motions for summary judgment does not necessarily
indicate that there is no dispute as to a material fact, or have the effect of
submitting the cause to a plenary determination on the merits.” Wermager v.
Cormorant Twp. Bd., 716 F.2d 1211, 1214 (8th Cir. 1983). Instead, each summary
judgment motion must be evaluated separately on its own merits to determine
whether a genuine issue of material fact exists and whether the movant is entitled
to judgment as a matter of law. Husinga v. Federal–Mogul Ignition Co., 519 F.
Supp. 2d 929, 942 (S.D. Iowa 2007).
As to each summary judgment motion, I have viewed the facts in the light
most favorable to the nonmoving party and the following is established for
purposes of the summary judgment motions.
III.

Discussion

A. How is the loss allocated between ZAIC and INA?
Insureds ZAIC and INA admit that they consecutively insured A-B during
the July 1971 to July 1996 period of alleged asbestos exposure, and that the
asbestos claim falls within their policies’ personal and bodily injury coverages.
Because ZAIC paid the entire settlement, it now seeks contribution from INA for
its pro rata share. INA does not deny that its policies covered the asbestos claim at

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issue; however, it argues that (1) under a pro rata allocation of the settlement, any
amount that would be allocated to its policies would be less than the deductible
amounts or (2) the pollution exclusion in its policies bars coverage. Because I
agree that no equitable remedy is justified when the pro rata allocation amount is
less than the deductible amount, I need not decide the effect of the pollution
exclusion.
There is no conflict of laws issue between the parties. All movants state that
Missouri law applies in the interpretation of these insurance policies, and I agree.3
The insurance company parties, ZAIC and INA, also agree that the proper method
for allocating settlement damages between consecutive insurers of the same risk is
a pro rata allocation based on each insurer’s time-on-the-risk. “Under the pro rata
approach, damages are spread proportionately across the entire period during
which the damage takes place.” Doe Run Res. Corp. v. Certain Underwriters at
Lloyd’s London, 400 S.W.3d 463, 474 (Mo. Ct. App. 2013). However, insured AB argues that a Missouri court would apply an “all sums” allocation method to this
3

ZAIC brings this case based on diversity jurisdiction under 28 U.S.C. § 1332. “A district court
sitting in diversity must apply the conflict of law rules for the state in which it sits.” Inacom
Corp. v. Sears, Roebuck & Co., 254 F.3d 683, 687 (8th Cir. 2001). In deciding choice of law
questions for insurance cases, if the insurance contract does not specify which state’s law applies
or if the policy insures risks located in a state other than Missouri, Missouri applies Section 193
of the Restatement (Second) of Conflict of Laws. Curran Composites, Inc. v. Liberty Mut. Ins.
Co., 874 F. Supp. 261, 264 (W.D. Mo. 1994). Under Section 193, Missouri courts will apply the
law of the state where “the principal location of the insured risk” is located, unless another state
has a more significant relationship to the transaction and the parties. Restatement (Second) of
Conflict of Laws § 193 (1971). In this case, at the time of the writing of the policies, A-B’s
principal location was in Missouri and all of the insurance policies stated A-B’s Missouri address
on their cover pages.
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asbestos settlement. Under this method, ZAIC would be liable for the whole
settlement, regardless of the coverage period. A-B’s argument is based on the
language of the ZAIC policy which states that it covers “all sums which the
insured shall become legally obligated to pay as damages.” Joint Stipulation of
Fact Ex. 2 at 4, ECF No. 79-2; Ex. 3 at 4, ECF No. 79-3.
My task is to determine how the Missouri Supreme Court would decide the
issue at hand. Lindsay Mfg. Co. v. Hartford Accident & Indem. Co., 118 F.3d
1263, 1267-68 (8th Cir. 1997). Although state courts disagree and no Missouri
court has directly ruled this issue of insurance policy interpretation in the context
of asbestos exposure, there is sufficient case law for me to predict how a Missouri
court would address such a settlement allocation dispute.
In a dental malpractice case before the Missouri Court of Appeals where
there were repeated acts of negligence over a twenty-year period, the court
determined the fairest method of apportioning the settlement among three
consecutive insurers to be proration based of the proportionate period of each
company’s exposure. Cont’l Cas. Co. v. Med. Protective Co., 859 S.W.2d 789
(Mo. Ct. App. 1993). The Court noted the similarity of the malpractice case to
asbestos exposure situations and cited the Sixth Circuit’s application of a pro rata
allocation to asbestos litigation. Id. at 792 (citing Ins. Co. of N. Am. v. 48
Insulations, Inc., 633 F.2d 1212 (6th Cir. 1980)). “Where the loss is caused not by

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a single event but by a series of cumulative acts or omissions, we believe the fair
method of apportioning the loss among consecutive insurers is by application of
the ‘exposure theory’ utilized in cases of progressive disease such as asbestosis.”
Cont’l, 859 S.W.2d at 792. The Missouri court apportioned both the negligence
settlement amount and the costs of defense between the consecutive insurers based
on the number of days each insurer’s policy covered. Id. at 793.
The Eighth Circuit applied the Continental Casualty Co. findings in
allocating a Missouri tort action settlement where consecutive insurers provided
coverage to the insured during the time period at issue. Nationwide Ins. Co. v.
Cent. Mo. Electric Coop., Inc., 278 F.3d 742 (8th Cir. 2001). The court found that
when the precise timing of the suffered injuries is complex, a time on the risk
analysis is appropriate. Id. at 748. The court affirmed the district court’s
allocation of damages based on the number of days each insurer’s policy covered.
Id.
I conclude that a Missouri court would allocate the settlement and costs in
this case between consecutive insurers ZAIC and INA based on the amount of time
each insurer provided liability insurance to A-B during the exposure period. 4
4

As stated above, ZAIC did not seek summary judgment against A-B and it makes no argument
in its briefs for any allocation to A-B for the seven years when there was no coverage due to the
asbestos exclusion in the INA policies. These “bare years,” or years when A-B had no coverage,
are mentioned multiple times in the deposition testimony of ZAIC claims representatives Kelli
Belpedio and Brett Tatara. See Joint Stipulation of Facts Ex. 10, Belpedio Dep. 42:12-45:2, ECF
No. 79-10; Ex. 11, Tatara Dep. 21:1-6-23, 92:13-17, ECF No. 79-11 (“[W]e’re seeking
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B. Is ZAIC entitled to contribution or subrogation from INA?
ZAIC brings this case seeking a remedy in equity. Equitable contribution is
a means of recovery which requires the insurers of a commonly insured loss to
prorate the loss in proportion to the amount of coverage available under their
respective policies. Federal Ins. Co. v. Gulf Ins. Co., 162 S.W.3d 160, 164 (Mo.
Ct. App. 2005). Through this standard of recovery, an insurer who pays more than
its share of the claim is able to recover the excess from the other insurer. Id.;
Heartland Payment Sys., LLC v. Utica Mut. Ins. Co., 185 S.W.3d 225, 232 (Mo.
Ct. App. 2006). Similarly, the doctrine of equitable subrogation is an equitable
remedy utilized to compel the payment of a debt by one who in justice, equity, and
good conscience should pay it. Street v. National Life Ins. Co., 347 S.W.2d 455,
459 (Mo. Ct. App. 1961).
According to the Missouri Supreme Court, subrogation exists to prevent
unjust enrichment. Keisker v. Farmer, 90 S.W.3d 71, 75 (Mo. 2002) (citing
Tucker v. Holder, 225 S.W.2d 123, 126 (Mo. 1949)). A claim for unjust
enrichment under Missouri law has three elements: 1) a benefit conferred by a
plaintiff on a defendant; 2) the defendant's appreciation of the fact of the benefit;
and 3) the acceptance and retention of the benefit by the defendant in

contribution from INA for the years that they don’t have exclusions, as well as the bare years
from A-B.”)
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circumstances that would render that retention inequitable. Hertz Corp. v. RAKS
Hospitality, Inc., 196 S.W.3d 536, 543 (Mo. Ct. App. 2006).
INA does not deny that this asbestos settlement falls within its policies’
coverage for personal injury liability, nor does it dispute the application of a pro
rata allocation of the settlement under Missouri law. In defense, INA argues that
(1) its policies do not pay damages within the deductibles and (2) the pollution
exclusion in the policies bars coverage.
ZAIC paid the underlying asbestos litigation settlement of $1.5 million and
incurred $79,298.12 in defense costs. The parties disagree on the number of years
over which the settlement should be allocated. ZAIC argues that the appropriate
pro rata allocation would be allocating half of the settlement and defense costs to
ZAIC for its nine years of coverage (July 1971 to July 1980) and the other half to
INA for its subsequent nine years of coverage (July 1980 to July 1989). This
would result in each insurer being responsible for approximately $789,649.
Spreading this amount over nine years of coverage would make INA responsible
for approximately $87,739 per year. Although INA agrees with a pro rata
allocation, it argues that the settlement should only be allocated over the fifteen
year period of 1971 to 1986 because in 1986 the INA deductible amount increased
to equal the policy limit amount, thereby making the policy self-insurance. An
allocation over fifteen years would equate to approximately $105,287 per year.

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The INA policy deductible amounts were $250,000 to $1 million per policy year.
Therefore, I need not decide if INA’s policies starting in 1986 were considered
self-insurance, because regardless of which number of allocation years is used,
both annual allocation amounts are less than the deductible.
In response, ZAIC relies on an INA policy deductible endorsement to argue
that INA should pay the allocation amount despite it being less than the deductible.
The INA policy deductible endorsement states:
1) a. [INA’s] obligation to pay damages on behalf of the insured under the
policy to which this endorsement is attached applies only to damages in
excess of the deductible amounts stated in the declarations.
b. However, if the named insured, or a claims servicing organization
acting on behalf of the named insured, fails to pay any damages within
the deductible amounts after the legal obligation of the insured becomes
definitely determined, [INA] shall pay such damages and the named
insured shall reimburse [INA] promptly for any part of the deductible
amount that has been paid by [INA].
Joint Stipulation of Fact Ex.5 at 2, ECF No. 79-5 (emphasis added). ZAIC
considers the settlement agreement in the underlying asbestos litigation to
constitute a “definitely determined” legal obligation. ZAIC asserts that A-B’s
failure to pay the legal obligation since the settlement in January 2014, triggers
INA’s responsibility to pay on A-B’s behalf and then seek reimbursement from it.
Interpretation of an insurance policy is a question of law. Standard Artificial
Limb, Inc. v. Allianz Ins. Co., 895 S.W.2d. 205, 209 (Mo. Ct. App. 1995). The
policy language must be given its ordinary and “plain meaning, consistent with the
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reasonable expectations, objectives, and intent of the parties.” Id. This entire case,
including the pending summary judgment motions, is premised on the question of
which party is liable for what amount of the settlement and costs. The plain
meaning of the policy language “the legal obligation of the insured” did not
become “definitely determined” at the time of the settlement. There was no
finding of liability on the part of A-B in the settlement agreement, which stated
that “no party shall be deemed to have admitted liability or fault with respect to the
alleged incident or incident giving rise to the Action.” Joint Stipulation of Fact Ex.
9 at 5, ECF No. 79-9. It is only with this ruling that the parties’ legal obligations
become definitely determined. Insured A-B has not failed to pay damages under
INA’s deductible endorsement provision which INA is now responsible for paying.
The issue of failure to pay is not ripe for review because the obligation has just
now become definitely determined under the plain meaning of the insurance
policy.
Alternatively, ZAIC relies on the Eighth Circuit case Continental Casualty
Co. v. National Union Fire Ins. Co. of Pittsburgh, Pa., 812 F.3d 1147 (8th Cir.
2016), to argue that equitable contribution requires a co-insurer to contribute to the
insured’s defense even if the insured is required to reimburse the insurer for the
costs. In that case based on Minnesota law, the insurers were arguing over the duty
to defend when one insurer’s policy is a “fronting arrangement,” requiring the

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insured to reimburse the insurer for some defense costs. Id. at 1148-50.
Ultimately the Eighth Circuit relied on a Minnesota Supreme Court case to decide
that a co-insurer has a duty to defend and incurs potential liability to co-insurers
even when they can then seek reimbursement from the insured. Id. at 1150-51.
The court looked to specific policy provisions relating to the duty to defend and
reimbursement in making its determination. Duty to defend is not at issue in this
case, and even if a duty to defend existed on the part of INA, the uncontroverted
facts in the record demonstrate that A-B never tendered its defense to INA. Joint
Stipulation of Fact Ex. 13, Hawkins Dep. 14:18-21, ECF No. 79-13. Continental
Casualty Co. is distinguishable: the court relied on Minnesota state law which is
not applicable here, and the specific policy provisions are different. The ordinary
and plain meaning of the deductible endorsement at issue in this case is that INA is
not required to pay any amount within the deductible until such amount becomes a
definitely determined legal obligation that A-B has failed to pay.
Because the proper pro rata allocation of the settlement in this case results in
INA owing an amount less than the policy deductibles, no equitable relief is
required. Equitable contribution and subrogation are appropriate remedies where
fairness dictates it. There is no unfairness here because the amount allotted to
INA’s policies is the responsibility of A-B under the deductible endorsements.
Until A-B refuses to pay this legal obligation, which is only now definitely

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determined, no obligation has been created for insurer INA to pay and seek
reimbursement. Equity does not require payment by INA of A-B’s debt. When
ZAIC paid the $1.5 million settlement plus defense costs, a benefit was conferred
on defendant A-B – not on INA. INA was not unjustly enriched by ZAIC’s actions
and no equitable subrogation is justified. As a result, I do not need to decide on
parties’ arguments as to whether the pollution exclusion in the policies bars
coverage, whether the pollution exclusion defense was raised in a timely manner,
and whether A-B’s tender of the underlying lawsuit to ZAIC prevents equitable
claims against INA now.
C. Is ZAIC entitled to contribution or subrogation from A-B?
Although ZAIC did not seek summary judgment against A-B on its claims,
A-B does seek summary judgment against ZAIC. A-B argues that ZAIC’s
equitable claims against it should be denied because (1) ZAIC’s insurance policy
requires payment of “all sums,” therefore no contribution or pro rata claim exists
against A-B, (2) the relationship between the parties is contractual so ZAIC has no
right to judicially created equitable remedies that exist only between insurers, (3)
ZAIC never reserved its right to seek contribution from A-B when it paid the $1.5
million settlement, and (4) equitable contribution and unjust enrichment claims
make no sense against A-B in this situation.

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A-B attempts to distinguish the Missouri Court of Appeals ruling of a pro
rata allocation in Continental Casualty Co. and the Eighth Circuit’s time on risk
allocation in Nationwide Ins. Co., by arguing that such a proration only applies
among consecutive insurers. Since A-B and ZAIC are not consecutive insurers to
the asbestos liability risk, A-B argues that this court should look to the plain
language of the ZAIC policy that covers “all sums which the insured shall become
legally obligated to pay as damages.”5 Joint Stipulation of Fact Ex. 2 at 4, ECF
No. 79-2; Ex. 3 at 4, ECF No. 79-3. As set forth above, I have already decided that
Missouri courts would apply a pro rata allocation to the settlement here, and the
“all sums” language of the insurance policy is limited by the policy period. The
relationship of ZAIC and A-B as insurer and insured does not change the
appropriate allocation method.
A-B also attempts to use a Supreme Court of Delaware case which interprets
Missouri law to support its position. Monsanto Co. v. C.E. Health Comp. & Liab.
Ins. Co., 652 A.2d 30 (Del. 1994). The Delaware court reversed the lower court’s
finding of a pro rata apportionment among insurers of the same risk, concluding
that Missouri courts would not read a pro rata allocation of coverage into the
insurance policy. Id. at 35. The court said Missouri would require the plain and
5

A-B cites Doe Run Res.Corp. v. Certain Underwriters at Lloyd’s London, 400 S.W.3d 463
(Mo. Ct. App. 2013) as the most recent decision construing Missouri law on this question.
However the Doe Run court specifically states that it does “not reach the issue of whether
Missouri law requires an all sums or pro rata approach.” Id. at 474 n. 8.
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unequivocal terms of the policy to include such proration language, and where a
policy is silent, the insurance company is jointly and severally liable to the insured
for all sums. Id. at 34 (citing Tinsley v. Aetna Ins. Co., 205 S.W. 78 (1918)). This
Delaware case is distinguishable because the ZAIC policies at issue here contain
express language in the “Other Insurance” provision which contemplates a
“contribution by equal shares” when more than one insurance policy applies to the
loss. Joint Stipulation of Fact Ex. 2 at 20, ECF No. 79-2. The plain language of
the policy anticipates an allocation of loss between multiple insurers. A pro rata
allocation is not being read into this policy, as was the case in Monsanto Co.
A-B and ZAIC had a contractual relationship from 1971 to 1980 governed
by the terms of the insurance policies. ZAIC has admitted its policies covered the
asbestos claim for that period in the underlying lawsuit. The time period for which
ZAIC seeks contribution and subrogation is the time period for which ZAIC did
not cover A-B – in other words, when no contractual relationship existed between
the parties. During the alleged asbestos exposure from 1980 to 1996, A-B and
ZAIC’s relationship is not that of insurer and insured in relation to the alleged
exposure risk. Now that A-B’s legal obligation is definitely determined under the
INA insurance policies, ZAIC can seek recovery from A-B for the time not
included in the policy periods covered by ZAIC.

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ZAIC reserved rights of contribution from all parties. The doctrine of
equitable subrogation is an equitable remedy utilized to compel the payment of a
debt by one who in justice, equity, and good conscience should pay it. Street, 347
S.W.2d at 459. I am not ruling on whether ZAIC is entitled to equitable relief
against A-B, because that motion is not before me now. I will, however, deny AB’s motion seeking summary judgment on the claims against it.
IV.

Conclusion & Remaining Issues
Because ZAIC filed no motion for summary judgment against A-B, only

against INA, and I am denying A-B’s motion for summary judgment, ZAIC’s
claims against A-B remain. Any pro rata amount allocated to insurer INA would
be within the deductible endorsement provisions, and therefore there is no remedy
in equity that requires INA to share in the settlement and defense costs. INA is
entitled to summary judgment and will be dismissed from this case. I will set a
scheduling conference with counsel for ZAIC and A-B to discuss a schedule for
resolving the remaining issues in this case.
Based on the foregoing,
IT IS HEREBY ORDERED that Pacific Employers Insurance Company’s
Motion to Dismiss Party Pursuant to Joint Stipulation [#85] is GRANTED.
IT IS FURTHER ORDERED that Zurich American Insurance Company’s
Motion for Summary Judgment [#86] is DENIED, and that Insurance Company of

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North America’s Motion for Summary Judgment [#83] is GRANTED as set forth
above.
IT IS FURTHER ORDERED that Anheuser-Busch Companies, LLC’s
Motion for Summary Judgment [#80] is DENIED.
IT IS FINALLY ORDERED that a telephone scheduling conference is set for
Monday, December 19, 2016 at 11:00 a.m. Plaintiff’s counsel is responsible for
placing the call and having all parties on the line before contacting my chambers at
314-244-7520. Counsel for ZAIC and A-B must meet and confer in advance of the
conference and file a joint proposed scheduling plan for all matters necessary to the
resolution of this action seven (7) days prior to the conference.

____________________________________
CATHERINE D. PERRY
UNITED STATES DISTRICT JUDGE
Dated this 15th day of November, 2016.

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