On appeal from an interlocutory order of Superior Court of New Jersey, Chancery Division, General Equity Part, Bergen County, Docket Nos. C-7022-86 and C-63-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Payne, Baxter and Koblitz.
On December 31, 2004 and, again, on September 25, 2009, the Celotex Asbestos Settlement Trust (Trust) filed proofs of bodily injury and property damage claims arising out of exposure to asbestos and asbestos-containing products with the Liquidator of Integrity Insurance Company in Liquidation (Integrity). In the claims, the Trust sought coverage under two policies of excess comprehensive general liability insurance, each offering five million dollars in coverage, issued to Jim Walter Corporation, the parent of Celotex, effective October 1, 1982 to 1983 and renewed for an additional one-year period.
In notices of determination, the Liquidator disallowed the claims, contending that they were barred by the decision of the United States Bankruptcy Court for the Middle District of Florida, Tampa Division, as affirmed by the United States Court of Appeals for the Eleventh Circuit. See IMO The Celotex Corp. v. AIU Ins. Co., 216 B.R. 867 (Bankr. M.D. Fla. 1997), aff'd sub nom. In re: The Celotex Corp., Debtor. Asbestos Settlement Trust v. Continental Ins. Co., 299 Fed. Appx. 850 (11th Cir. 2008) (barring recovery from excess carriers as the result of lack of timely notice). The Trust filed a formal objection to the notices of determination, which was denied.
Thereafter, Integrity requested a hearing before the Special Master overseeing the liquidation proceeding and, following briefing and oral argument, the Special Master issued a written opinion in which he concurred with the Liquidator's position. An appeal resulted in the entry of an order confirming the Special Master's determination. The Trust then sought leave to appeal, which we granted. We now reverse, determining that the decisions upon which Integrity relies do not have the preclusive effect recognized by the Liquidator, the Special Master and the court.
The policies at issue provided excess liability insurance, with policy terms that followed the form of the underlying umbrella coverage issued by International Insurance Company. Although Integrity contends that coverage was limited to property damage, it appears that the policies provided limited coverage for bodily injury, as well. The Trust claims that the policies are applicable to both types of claims. However, the issue of the extent of coverage is not before us, and we decline to decide it.*fn1
The policies contained a "Notice of Loss" provision, that stated in relevant part:
The Insured shall immediately advise the Company of any accident or occurrence which appears likely to result in liability under this Policy and of subsequent developments likely to affect the Company's liability hereunder.
As the result of the pendency of thousands of lawsuits alleging liability associated with the use of products containing asbestos, on October 12, 1990, the Celotex Corporation and Carey Canada Incorporated (collectively, Celotex) filed for reorganization under Chapter 11 of the United States Bankruptcy Code. IMO The Celotex Corporation v. AIU Ins. Co., 196 B.R. 973, 978 (Bankr. M.D. Fla. 1996). In an adversary proceeding within the bankruptcy instituted in 1991, Celotex sought a declaratory judgment as to insurance coverage for existing asbestos-related claims*fn2 under various policies covering Celotex over a period of approximately thirty years. Id. at 976-77. Named as defendants were Celotex's insurers and the Florida Insurance Guaranty Association, the protections of which had been activated as the result of the insolvency of three insurers including Integrity, which was found to be insolvent in 1986.
The 1997 opinion to which we have previously referred addressed coverage claims for asbestos-related bodily injury and property damage under excess liability policies issued to Celotex for policy periods between October 1, 1978 and October 1, 1984. IMO Celotex, supra, 216 B.R. at 871. At issue was whether Celotex's "notice, if any, of asbestos bodily injury and property damage claims to Defendants, i.e., excess insurers, was proper and timely under the applicable insurance policy provisions." Id. at 870.
In resolving the issue the court held that Illinois law controlled, and that "Illinois courts take the position that such notice is required by the policy, and is not a technicality but a prerequisite to coverage." Id. at 872. Further, it held that notice must be given as soon ...