Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

MAERTIN v. ARMSTRONG WORLD INDUSTRIES

June 15, 2005.

JOAN MAERTIN, et al., Plaintiffs,
v.
ARMSTRONG WORLD INDUSTRIES, INC., et al., Defendant.



The opinion of the court was delivered by: JEROME SIMANDLE, District Judge

OPINION

In this declaratory judgment action arising out of the $7,000,000 settlement in this Court of a products liability toxic tort suit against Armstrong World Industries, Inc. ("Armstrong" or "AWI"), Plaintiffs seek a determination as a matter of law of the allocation of insurance coverage among the Defendant insurers.

  Cross-motions for summary judgment have been filed by Plaintiffs [Docket Item 100,] Defendants Certain Underwriters at Lloyd's, including Peter Cameron Webb, and London Market Insurance Companies [Docket Item 102,] and Defendant Liberty Mutual Insurance Co. [Docket Item 105,] and the Court has been asked to separately consider the choice-of-law issues that arise in the context of these motions. Oral argument was heard on February 9, 2005.

  For the reasons explained herein, the Court will apply New Jersey law to the allocation of insurance coverage relating to the progressive indivisible injury suffered by Plaintiffs.

  I. BACKGROUND

  A. Maertin I Settlement

  This matter arises from two related actions filed in the United States District Court for the District of New Jersey, Maertin, et al. v. Armstrong World Industries, Inc., No. 95-2849 (JBS), ("Maertin I"), and Schmoll v. Armstrong World Industries, Inc., No. 99-3497 (JBS).*fn1 Plaintiffs had either contracted, or feared contracting, cancer as a result of their exposure to ceiling tiles manufactured by Armstrong and installed in their workplace at Burlington County College.*fn2 Armstrong manufactured and distributed the ceiling tiles from about August 1968 to April 1970; they were coated with a plasticizer that included the carcinogen polychlorinated biphenyl ("PCB").

  The case was heavily litigated until the parties reported a settlement on September 14, 2000. This Court issued an order of dismissal and the parties entered into a "Settlement Agreement and Mutual General Release." On September 20, 2000, Armstrong filed Armstrong World Industries, Inc. v. Central National Insurance Co. of Omaha, et al., Civil Number 00-4763, in the Eastern District of Pennsylvania against its insurance carriers seeking a declaration of coverage for the settlement amount. The settlement agreement was signed by all parties on or before November 22, 2000; Armstrong signed the agreement on November 6, 2000. Under the terms of the agreement, Armstrong was to make the $7,000,000 payment on or before January 21, 2001.

  On December 6, 2000, however, Armstrong filed for bankruptcy under Chapter 11 in the District of Delaware. Armstrong, continuing to operate its business as a debtor in possession, notified Plaintiffs of the bankruptcy action and reminded them that any collection action was stayed by the Bankruptcy Code's automatic stay provision. Plaintiffs filed for relief from the automatic stay on March 29, 2001 to seek payment of the settlement amount. On December 10, 2001 the Honorable Joseph J. Farnan, United States District Judge for the District of Delaware, filed a memorandum order lifting the stay to allow Plaintiffs to pursue the enforcement of the settlement agreement. Meanwhile, on November 14, 2001, before the actual written order was entered, Plaintiffs filed the instant action against Armstrong, Liberty Mutual Insurance Co., Central National Insurance Co. of Omaha, Certain London Market Insurance Companies, CGU Group, Equitas Reinsurance Limited, First State Insurance Co., International Insurance Co., Puritan Insurance Co., and Peter E.J. Cameron-Webb for a declaratory judgment that the insurers pay the settlement agreement amount and against Armstrong, Liberty Mutual Insurance Company, Michael Carroll, and Bethann Jakoboski for money damages for fraud, bad faith, and concealment during the settlement negotiations ("Maertin II").

  On November 30, 2001, Plaintiffs filed a Notice of Motion to Enforce Settlement as to Defendant Armstrong in Maertin I. The Honorable Joel B. Rosen, in a Report and Recommendation filed pursuant to 28 U.S.C. § 636(b)(1)(B), found that this Court has jurisdiction to enforce the settlement agreement, that the settlement agreement is a valid and binding agreement, and that this Court has authority to enforce the agreement even though the bankruptcy court has exclusive jurisdiction to compel the debtor's payment of the settlement amount.*fn3 (Report and Recommendation.) After considering Defendant Armstrong's objections, on September 5, 2002 this Court affirmed Judge Rosen's Report and Recommendation and entered judgment against Defendant Armstrong in the amount of $7,000,000 so that the Plaintiffs could compel payment in the United States Bankruptcy Court.

  On May 3, 2002, the Honorable Randall J. Newsome, United States Bankruptcy Judge for the District of Delaware, signed a stipulation and order agreed upon by Plaintiffs and Armstrong which stated that Plaintiffs could proceed against Armstrong's insurance policies because the bankruptcy stay had been lifted to allow such an action and because Plaintiffs held the "equivalent" of a judgment returned unsatisfied from Armstrong.

  During the pendency of this matter, Liberty Mutual, the primary carrier for Armstrong, agreed to a partial settlement with Plaintiffs in the amount of $3,000,000. Plaintiffs maintain that the Liberty settlement did not affect their rights to collect additional payment from Liberty Mutual in the event a Court was to find the "excess carriers" were not responsible for any portion of the remaining $4,000,000. As noted above, the "excess carriers" are CGU/One Beacon Group, Central National Insurance Company, Certain London Market Insurance Companies, and International Insurance Company. B. Relevant Insurance Policies

  Armstrong purchased insurance coverage from a variety ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.