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Case 2:03-cv-01552-LS Document 354-1 Filed 07/07/10 Page 1 of 6
Case 2:03-cv-01552-LS Document 362 Filed 07/13/10 Page 1 of 6













EXHIBIT A

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Case 2:03-cv-01552-LS Document 362 Filed 07/13/10 Page 2 of 6


IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

Plaintiff,



ASTENJOHNSON, INC.,





COLUMBIA CASUALTY COMPANY et al.




Defendants.

v.














CIVIL ACTION

NO. 03- 1552








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REPLY BRIEF IN FURTHER SUPPORT OF AMERICAN INSURANCE COMPANY’S

MOTION FOR PARTIAL SUMMARY JUDGMENT DECLARING THAT ALL

ASBESTOS-RELATED CLAIMS AGAINST ASTENJOHNSON, INC. ARISE

FROM A SINGLE OCCURRENCE AND THAT ONLY A SINGLE

PER-OCCURRENCE LIMIT APPLIES TO THE 1982 AMERICAN POLICIES

American seeks partial summary judgment on the discrete ground that, because all of the

asbestos-related claims against AstenJohnson arise from a single occurrence – AstenJohnson’s

decision to manufacture dryer felts containing asbestos – only a single $10 million “per

occurrence” limit could potentially be available under the 1982 American Umbrella and Excess

Polices. American does not dispute that there would be a fact issue as to whether a separate set

of aggregate limits is available for the final 6 months of those two policies, but it becomes

unnecessary to adjudicate this issue if the Court agrees with American on the single occurrence

issue. Indeed, because there is but a single per occurrence limit available under these policies,

the aggregate limit issue is moot and does not even present a justiciable “case or controversy.”

Try as it might, AstenJohnson cannot circumvent the inevitable result of applying

Pennsylvania law, as articulated in Treesdale, Baumhammers, and Greene Tweed, to the

unambiguous terms of the 1982 American Umbrella and Excess Policies. Indeed, none of its

arguments present any genuine issues of material fact sufficient to warrant denying American’s

motion.

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First, AstenJohnson’s argument (at 7-8) that every work site where its dryer felts were

used could constitute a separate “occurrence” is simply wrong given that AstenJohnson was a

manufacturer of asbestos-containing products, not an installer of asbestos-containing products

manufactured by others. Indeed, the Greene Tweed court recognized this very distinction in

rejecting Greene Tweed’s similar argument in that case:

Unlike Greene Tweed, Kvaerner’s liability was premised on an
allegation of negligent construction of furnaces at different work
sites where asbestos products manufactured by others were used by
Kvaerner to construct the furnaces. The claims against Kvaerner
did not arise, as in Greene Tweed, from the manufacturing or
selling of products containing asbestos. Thus, the circumstances in
Greene Tweed’s case are more akin to those in Treesdale than in
Kvaerner, and this court is bound to follow the Third Circuit’s
interpretation of Pennsylvania law. Accordingly, this court rejects
Greene Tweed’s argument that there was more than one
occurrence as the result of its manufacture and sale of asbestos-
containing products. Instead, the court finds that the manufacture
and/or sale of asbestos-containing products constitutes a single
occurrence for purposes of the limits of liability in the American
Home and Allstate Policies.

Greene, Tweed & Co. v. Hartford Accident and Indem. Co., 2006 WL 1050110, *8 (E.D. Pa.

April 21, 2006). Here as well, since AstenJohnson does not suggest, much less proffer any

evidence, that its asbestos liabilities arise from anything other than its manufacture and sale of

asbestos-containing products, there is no question that Treesdale compels the conclusion that its

liabilities arise from a single occurrence.

Second, AstenJohnson contends (at 2, 7-8) that there could be more than one occurrence

due to its being sued on the basis of conspiracy claims arising from its membership in the

Asbestos Textiles Institute (“ATI”). But this argument is a complete red herring because all such

claims are expressly precluded by the second, undisputed sentence of the “Asbestosis Exclusion”

at issue in this case: “It is further agreed that this policy does not apply to any claim arising out

of the Insured’s membership in the Asbestos Textile Institute.” Since ATI claims are excluded,



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the fact remains that any arguably-covered asbestos related claims are those brought against

AstenJohnson for its role in manufacturing and selling asbestos-containing products, which as

Treesdale teaches arise from but a single occurrence.

Third, contrary to AstenJohnson’s contention (at 3, 9), the differential in premiums

between the 12-month 1981 American Umbrella Policy and the 18-month 1982 American

Umbrella Policy does not create any material factual dispute as to whether the per occurrence

limit of the 1982 American Umbrella Policy was renewed for the last six months of that policy

period. The fact that a higher premium was charged for an 18-month policy than for a 12-month

policy is in no sense probative of this issue. Indeed, in Millers Capital Insurance Co. v.

Gambone Brothers Development Co., 941 A.2d 706 (Pa. Super. 2007), the Pennsylvania

Superior Court rejected just such an effort to import latent ambiguity into an otherwise

unambiguous policy provision on the basis of the premium charged. That court stated:

Gambone also attempts to demonstrate latent ambiguity by arguing
the trial court erred by refusing to consider the amount of premium
it paid for products-completed operations hazard coverage.…
Gambone’s argument holds little persuasive value. Gambone
invites this Court to comb through the various insurance policies,
calculate what premiums were paid for specific grants of coverage,
and then compare these calculations to discern whether it paid an
amount which could lead us to believe it intended to purchase
coverage for damages caused by the faulty workmanship of
subcontractors.

The problem with Gambone’s request is apparent; it has given us
no framework within which to conduct such an inquiry. … We
have no idea what the prevailing market rates are for completed
operations coverage riders which do not insure against faulty
workmanship. Even if evidence in the certified record
demonstrated Millers charges a high premium for such coverage,
we have no idea whether Millers offers services that other insurers
do not, such that the higher premium charged would be justified.
Thus, we must decline Gambone’s invitation.



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Id. at 714. Here, too, AstenJohnson provides “no framework within which to conduct such an

inquiry,” nor any evidence to suggest that a higher premium was paid for the 18-month policies

in return for annualization of the 1982 Policies’ per occurrence limits, and the plain language of

the policies does not support such a claim.

Fourth, the Third Circuit did not find material fact issues to exist on the number of

occurrences issue or on the issue of whether the per occurrence limits of the 1982 Polices were

annualized, as AstenJohnson incorrectly argues (at 2-3, 8-9). To the contrary, like this Court, the

Third Circuit considered and ruled only on the issue of whether the aggregate limits are

annualized, and found disputed issues on fact only on that issue, as that court’s opinion makes

clear. See 562 F.3d 213, 229 n.9 (referencing “Asten's declaratory judgment claim regarding the

aggregate liability limit under American's 1982 Umbrella and Excess Liability Policies” and

ruling that “it is not clear at this point that this issue should be resolved without the assistance of

a jury.”). Likewise, a review of the excerpts of the testimony of American’s Rule 30(b)(6)

designee Jerry Leddy submitted in conjunction with AstenJohnson’s opposition (Ex. B) makes

clear that Mr. Leddy’s testimony concerned solely the issue of whether the aggregate limits of

the 1982 Policies, not their “per occurrence” limits, were renewed for the final six months of

those policies. Accordingly, this issue has yet to be considered by either this Court or the Third

Circuit and is ripe for determination now.

Fifth, there is no difference in policy language to justify Asten’s attempt (at 9-11) to

distinguish Greene Tweede and the numerous cases cited therein. American’s policies clearly

provide that there are separate “per occurrence” and “aggregate” policy limits. The only

annualization language found in American’s policies are in a section that references solely the

“aggregate” limits. There is nothing in either policy that even suggests any intent to annualize

the “per occurrence” limits.



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For all the foregoing reasons, and the reasons set forth in American’s Opening Brief, this

Court should grant American’s motion for partial summary judgment and declare that any

asbestos-related claims arising out of AstenJohnson’s liability constitutes one “occurrence” as a

matter of Pennsylvania law, and that the most that could possibly be available to pay for

asbestos-related claims under the 1982 American Umbrella and Excess Policies is the single,

non-annualized, $10 million aggregate “per occurrence” limit of each policy.



Respectfully submitted,

COZEN O’CONNOR


By: /s/ Jacob C. Cohn__
William P. Shelley
Jacob C. Cohn
1900 Market Street
Philadelphia, PA 19103
(215) 665 – 2000

KOCH & DeMARCO, LLP

Susan Simpson Brown
KOCH & DeMARCO
Jenkintown Plaza, Suite 460
Jenkintown, Pennsylvania 19046
(215) 881-9931






















Attorneys for Defendant, American Insurance
Company

Dated: July 7, 2010



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