R.T. Vanderbilt Co. v. Hartford Accident & Indemnity Co.

******************************************************
The ‘‘officially released’’ date that appears near the
beginning of each opinion is the date the opinion will
be published in the Connecticut Law Journal or the
date it was released as a slip opinion. The operative
date for the beginning of all time periods for filing
postopinion motions and petitions for certification is
the ‘‘officially released’’ date appearing in the opinion.
In no event will any such motions be accepted before
the ‘‘officially released’’ date.
All opinions are subject to modification and technical
correction prior to official publication in the Connecti-
cut Reports and Connecticut Appellate Reports. In the
event of discrepancies between the electronic version
of an opinion and the print version appearing in the
Connecticut Law Journal and subsequently in the Con-
necticut Reports or Connecticut Appellate Reports, the
latest print version is to be considered authoritative.
The syllabus and procedural history accompanying
the opinion as it appears on the Commission on Official
Legal Publications Electronic Bulletin Board Service
and in the Connecticut Law Journal and bound volumes
of official reports are copyrighted by the Secretary of
the State, State of Connecticut, and may not be repro-
duced and distributed without the express written per-
mission of the Commission on Official Legal
Publications, Judicial Branch, State of Connecticut.
******************************************************
R.T. VANDERBILT COMPANY, INC. v. HARTFORD
ACCIDENT AND INDEMNITY COMPANY ET AL.
(AC 36749)
(AC 37140)
(AC 37141)
(AC 37142)
(AC 37143)
(AC 37144)
(AC 37145)
(AC 37146)
(AC 37147)
(AC 37148)
(AC 37149)
(AC 37150)
(AC 37151)
Lavine, Beach and Bear, Js.
Argued March 30, 2016—officially released March 7, 2017
(Appeal from Superior Court, judicial district of
Waterbury, Complex Litigation Docket, Shaban, J.)
Elizabeth J. Stewart and Jacob M. Mihm, pro hac
vice, with whom were Rachel Snow Kindseth and, on
the brief, Francis J. Brady, Marilyn B. Fagelson, Ste-
phen Hoke, pro hac vice, and David H. Anderson, pro
hac vice, for the appellant-cross appellee (substitute
plaintiff).
Wayne S. Karbal, pro hac vice, with whom were
Jeffrey J. Tinley, Amita Patel Rossetti and, on the brief,
Alan M. Posner, pro hac vice, for the appellees-cross
appellants (named defendant et al.).
Michael J. Smith, pro hac vice, and Bryan W. Petrilla,
pro hac vice, with whom was John F. Conway, for
the appellees-cross appellants (defendant Mt. McKinley
Insurance Company et al.).
Lorraine M. Armenti, pro hac vice, with whom were
Frank H. Santoro, Shayne W. Spencer, pro hac vice,
and, on the brief, Kathleen J. Devlin, pro hac vice,
and R. Cornelius Danaher, Jr., for the appellees-cross
appellants (defendant Continental Casualty Company
et al.).
Michael L. Duffy, pro hac vice, with whom, on the
brief, were Michael G. Albano and Amy R. Paulus, pro
hac vice, for the appellee-cross appellant (defendant
Old Republic Insurance Company).
Lawrence A. Serlin, pro hac vice, with whom was
Laura Pascale Zaino, for the appellees-cross appellants
(defendant Pacific Employers Insurance Company et
al.).
Robert M. Flannery, pro hac vice, with whom were
William A. Meehan and, on the brief, Alexander J.
Mueller, pro hac vice, and Stephen T. Roberts, for the
appellees-cross appellants (defendant Certain Under-
writers at Lloyd’s, London, et al.).
Lawrence A. Levy, pro hac vice, with whom were
Louis B. Blumenfeld and, on the brief, Richard S. Feld-
man, pro hac vice, for the appellees-cross appellants
(defendant Fireman’s Fund Insurance Company et al.).
Kevin M. Haas, pro hac vice, with whom were Mat-
thew G. Conway and, on the brief, MaryKate J. Geary
and Marianne May, pro hac vice, for the appellee-cross
appellant (defendant Westport Insurance Corporation).
Lawrence D. Mason, pro hac vice, with whom were
John A. Lee, pro hac vice, and, on the brief, Dwight
A. Kern, for the appellee-cross appellant (defendant
National Casualty Company).
Kathleen D. Monnes, with whom was Erick M. San-
dler, for the appellees-cross appellants (defendant St.
Paul Fire and Marine Insurance Company et al.).
Timothy G. Ronan and Assaf Z. Ben-Atar filed a brief
for the appellee-cross appellant (defendant Employers
Mutual Casualty Company).
John E. Rodewald, pro hac vice, and David A. Slossb-
erg filed a brief for the appellee-cross appellant (defen-
dant Munich Reinsurance America, Inc.).
Todd A. Bromberg and Laura A. Foggan filed a brief
for the Complex Insurance Claims Litigation Associa-
tion as amicus curiae.
Edward J. Stein, John M. Leonard, pro hac vice,
Amy Bach, pro hac vice, and Heather R. Spaide filed
a brief for United Policyholders as amicus curiae.
Opinion
TABLE OF CONTENTS
Page
I. FACTS . . . . . . . . . . . . . . . . . . . . . . 76
A. Factual and Procedural History . . . . 76
B. Issues on Appeal . . . . . . . . . . . . . 84
II. GOVERNING LEGAL PRINCIPLES . . . . . 87
A. Principles of Insurance Law . . . . . . 87
B. Complex Asbestos Litigation . . . . . . 92
C. Standard of Review . . . . . . . . . . . 93
III. ALLOCATION OF DEFENSE AND
INDEMNITY COSTS . . . . . . . . . . . . . . 94
A. Trigger of Coverage . . . . . . . . . . . 96
1. Whether There Is Controlling
Connecticut Precedent . . . . . . . . 102
2. Whether Trigger of Coverage Is
Question of Law or Fact, and
Whether Expert Testimony of Dr.
Kratzke Was Properly Excluded . . . 105
3. What Trigger of Coverage Theory
Governs Long-Tail Asbestos
Litigation in Connecticut . . . . . . . 118
B. Unavailability of Insurance Rule . . . . 123
1. Unavailability Rule . . . . . . . . . . 126
2. Equitable Exception and
Testimony of Professor Priest . . . . 143
3. Whether Trial Court Properly
Applied Unavailability Rule . . . . . 153
4. Nonasbestos Particulates . . . . . . 160
C. Default Date of First Exposure and
Pre-1962 Liabilities . . . . . . . . . . . . 168
1. Allocation of Past Payments
under 2002 Allocation Agreement . . 172
2. Default Date of First Exposure
for Pending and Future Actions . . . 181
D. Mathematical Allocation Formula
and Orphan Shares . . . . . . . . . . . . 185
1. Orphan Shares . . . . . . . . . . . . . 189
2. Maximum Coverage Block . . . . . . 190
3. Additional Allocation Issues . . . . . 191
E. Prospective Application of Court’s
Rulings . . . . . . . . . . . . . . . . . . . 196
1. Whether Trial Court Intended
to Apply its Allocation Rules
Prospectively . . . . . . . . . . . . . . 199
2. Whether Prospective Only
Application Would Be Permissible
under Connecticut Law . . . . . . . . 207
3. Guidance on Remand . . . . . . . . . 213
IV. SCOPE OF COVERAGE AND
POLICY EXCLUSIONS. . . . . . . . . . . . . 214
A. Pollution Exclusions . . . . . . . . . . . 215
1. Standard Pollution Exclusion . . . . 216
2. Nonstandard Pollution Exclusions . 252
B. Occupational Disease Exclusions . . . 255
1. Facts . . . . . . . . . . . . . . . . . . 256
2. Analysis . . . . . . . . . . . . . . . . . 260
C. Duty to Defend Under Continental’s
1968–1977 Umbrella Policies . . . . . . 270
1. Facts . . . . . . . . . . . . . . . . . . 270
2. Analysis . . . . . . . . . . . . . . . . . 273
V. OTHER CLAIMS . . . . . . . . . . . . . . . . 283
A. Admission of Posner Charts . . . . . . 284
B. Exhaustion of Primary Policies. . . . . 293
1. Products Claims . . . . . . . . . . . . 294
2. Application of 2002
Allocation Agreement . . . . . . . . . 297
C. Duty to Defend Under Old
Republic’s Excess Policies . . . . . . . 299
D. Duty to Defend Under Continental’s
1965–1968 and 1977–1978 Excess
Policies . . . . . . . . . . . . . . . . . . 303
VI. CONCLUSION . . . . . . . . . . . . . . . . . 309
APPENDIX A—PARTIES JOINING
APPELLATE CLAIMS . . . . . . . . . . . . . . . . 310
LAVINE, BEACH and BEAR, Js. The present action
arises from thousands of underlying lawsuits alleging
injuries from exposure to industrial talc mined and sold
by the plaintiff, R.T. Vanderbilt Company, Inc. (Vander-
bilt),1 that purportedly contained asbestos. In this inter-
locutory appeal, Vanderbilt and the defendants,
approximately thirty insurance companies that issued
comprehensive general liability insurance policies to
Vanderbilt between 1948 and 2008, are seeking, among
other things, a declaratory judgment determining their
respective obligations with regard to the underlying
actions. Through a series of bifurcation orders, the trial
court, Shaban, J., divided the trial into four phases, and
the case reaches us now, following the second phase
of the trial, on the parties’ appeals and cross appeals
from several decisions of the court. Before the trial
proceeds further, the parties ask that we address
approximately twenty issues—primarily questions of
law—that will significantly impact the adjudication of
the remaining trial phases. These issues present a num-
ber of questions of first impression in Connecticut and,
in some instances, nationally.2 Although most relate to
the methodology by which insurance obligations are to
be allocated with respect to long latency asbestos
related claims that implicate multiple policy periods,
the parties also challenge the trial court’s rulings with
respect to the interpretation of various scope of cover-
age and exclusion provisions in the Vanderbilt policies,
whether certain of the primary policies have been
exhausted, and other evidentiary and miscellaneous
issues. As detailed more fully hereinafter, we affirm in
part and reverse in part the rulings of the trial court.
I
FACTS
A
Factual and Procedural History
The following facts, as found by the trial court, and
procedural history are relevant to our resolution of the
issues on appeal. Vanderbilt is a Connecticut corpora-
tion engaged in the mining and sale of various chemical
and mineral products. In 1948, it began to produce
industrial talc through its subsidiary, Gouverneur Talc
Company. Vanderbilt continued to mine and sell talc
until 2008, when it ceased production and sold off the
last of its inventory.
Over the past several decades, thousands of underly-
ing actions have been filed against Vanderbilt in various
jurisdictions throughout the United States, many of
which remain pending. Those actions alleged that talc
and silica mined and sold by Vanderbilt contained
asbestos or otherwise caused diseases that are corre-
lated to asbestos exposure, such as mesothelioma,
other asbestos related cancer, and asbestosis (collec-
tively, asbestos related disease). In response, Vanderbilt
has taken the position that its industrial talc does not
contain asbestos. From the time that it started mining
talc, Vanderbilt purchased or attempted to purchase
primary and secondary comprehensive general liability
insurance to cover the defense and indemnity costs of
asbestos related claims.
Vanderbilt brought the present action against several
insurance companies that issued it primary insurance
policies between 1948 and 2008: defendant Hartford
Accident & Indemnity Company (Hartford); defendant
American International Specialty Lines Insurance Com-
pany (American International); and defendants Conti-
nental Casualty Company, Columbia Casualty
Company, and Continental Insurance Company (collec-
tively, Continental). Vanderbilt alleged, among other
things, that Hartford and Continental (primary insurers)
had breached their contractual obligations to pay their
proper shares of defense and indemnity costs in the
underlying actions. Vanderbilt also sought a declaratory
judgment as to the parties’ respective rights and respon-
sibilities under the policies at issue.
Continental subsequently filed a third party com-
plaint against various insurance companies that had
provided secondary coverage—umbrella or excess3—
to Vanderbilt during the time that it was in the talc
business. Those defendants, as well as other secondary
insurers later made parties to the case, (collectively,
secondary insurers) include: ACE Property & Casualty
Insurance Company; American Insurance Company;
Arrowood Indemnity Company; Century Indemnity
Company; Employers Mutual Casualty Company; Ever-
est Reinsurance Company (Everest); First State Insur-
ance Company; Fireman’s Fund Insurance Company
(Fireman’s); Government Employees Insurance Com-
pany (GEICO); Harbor Insurance Company; Mt. McKin-
ley Insurance Company (Mt. McKinley); Munich
Reinsurance America, Inc., formerly known as Ameri-
can Reinsurance Company; National Casualty Company
(National Casualty); National Union Fire Insurance Co.
of Pittsburgh, PA; Old Republic Insurance Company
(Old Republic); Pacific Employers Insurance Company
(Pacific); Royal Indemnity Company; St. Paul Fire and
Marine Insurance Company; Travelers Casualty and
Surety Company, formerly known as Aetna Casualty
and Surety Company; Twin City Fire Insurance Com-
pany; Westport Insurance Corporation; Zurich Interna-
tional Ltd.; and Certain Underwriters at Lloyd’s, London
(Lloyd’s), Certain London Market Insurance Compa-
nies, American International Underwriters Insurance
Company, and Granite State Insurance Company (col-
lectively, London insurers). Vanderbilt thereafter
brought direct claims against these third party second-
ary insurers.
Vanderbilt’s operative complaint contains six
counts.4 In the first count, Vanderbilt sought a declara-
tory judgment regarding Continental’s duty to defend
and indemnify it in the underlying actions. The same
declaratory relief was sought as to Hartford (count two)
and the secondary insurers (count five). Vanderbilt also
asserted breach of contract claims against Continental
(count three), Hartford (count four), and certain sec-
ondary insurers (count six), claiming that the insurers
had failed to fully defend and indemnify it against the
underlying claims.
Prior to the start of trial, the trial court issued a series
of scheduling orders, pursuant to which it separated
the trial into four phases. In the first two phases, which
were tried to the court and have been completed, the
court addressed Vanderbilt’s declaratory judgment
claims and related counterclaims and cross claims. The
primary issue before the court in those phases was how
insurance obligations are to be allocated with respect
to long latency5 asbestos related claims alleging injuries
that occur over the course of years or even decades
and, therefore, potentially implicate multiple insurance
policy periods. Specifically, in Phase I, the court
addressed the question of how defense costs for the
underlying actions were to be allocated as between
Vanderbilt and its insurers. That required a determina-
tion of (1) the periods during which the defendants’
insurance policies were in effect and (2) whether Vand-
erbilt should be treated as self-insured for any period
so as to create an equitable obligation to contribute to
the costs of its defense. In Phase II, the court considered
the same questions with respect to indemnity costs. In
that phase, the court also issued rulings with respect
to the meaning of various policy provisions, the exhaus-
tion of Vanderbilt’s primary policies, and related issues.
In Phase III of the trial, which also will be tried to the
court, the court plans to adjudicate the defendants’
claims for recovery of overpayment of insurance costs.
In Phase IV, Vanderbilt’s breach of contract claims
against its insurers are to be tried to a jury.
In addressing the allocation questions in Phases I and
II, the trial court proceeded on the assumption that
Connecticut follows a pro rata, time-on-the-risk
approach to allocating insurance obligations in long-
tail cases. See footnote 5 of this opinion. Under that
allocation scheme, the court assumed that a victim of
asbestos related disease suffers continuous injuries
commencing at the time of initial exposure to asbestos
and extending until disease manifests, and, therefore,
that defense and indemnity costs must be allocated
across all of the insurance policies on the risk (i.e.,
potentially liable) during that period (allocation block).
The court further assumed that (1) the policyholder is
responsible for a pro rata share of costs for any period
during which it is uninsured or underinsured (proration
to the insured), including so-called ‘‘orphan share’’ peri-
ods covered by policies that were lost, destroyed, or
issued by insurers that subsequently became insolvent;
but (2) Connecticut has embraced an unavailability of
insurance exception pursuant to which there is no pro-
ration to the insured for periods during which insurance
is not available. Applying these principles to the present
case, the court held evidentiary hearings during Phases
I and II to determine, among other things, whether
defense and indemnity insurance coverage, respec-
tively, was available for asbestos related claims
between 1948 and 2008 and, if so, whether Vanderbilt
availed itself of such coverage.
In memoranda of decision issued following the first
and second phases of the trial, the court found that
occurrence based6 comprehensive general liability
insurance covering asbestos related claims was gener-
ally available for purchase from 1948 through 1955.
Although Vanderbilt had purchased such policies, it was
unable to locate them. The court therefore determined
that Vanderbilt would be treated as self-insured and
required to bear its pro rata share of defense and indem-
nity costs for that period. From 1956 through 1961, by
contrast, Vanderbilt had purchased insurance policies
that provided sufficient coverage for asbestos related
claims.7 Accordingly, the court determined that Vander-
bilt would not be treated as self-insured for those years.
The court also found that, with regard to the period
from 1962 through March, 1986, it was undisputed that
insurance coverage for asbestos claims was generally
available and that Vanderbilt had secured such cover-
age. Accordingly, Vanderbilt was not treated as self-
insured for that period.
As to the period of 1986 through 2008, the court
observed that there was considerable conflicting evi-
dence as to whether coverage for asbestos claims was
available to Vanderbilt and whether Vanderbilt in fact
obtained adequate coverage. Noting that a flood of
asbestos related injury claims had led the insurance
industry generally to cease offering policies covering
such claims after 1985, the court found that there was
insufficient evidence to establish that occurrence based
or claims-made policies covering asbestos related dis-
ease were available from March, 1986 to March, 1993,
or after April, 2007. Accordingly, Vanderbilt was not
deemed to be responsible for a pro rata share of costs
during those periods, even though it did not carry any
coverage for asbestos claims. By contrast, the court
found that, although asbestos related coverage was not
generally available to companies in the mining and
chemical industries at any time after 1985, Vanderbilt
was, in fact, able to purchase primary claims-made poli-
cies that provided defense—and, in one instance,
indemnity—cost coverage for the period of March 3,
1993 through April 24, 2007. Because the court found
that Vanderbilt was knowingly underinsured during that
period of time, it concluded that Vanderbilt would be
considered to be self-insured with respect to defense—
but not indemnity—cost coverage for that fourteen
year period.
The court also found a gap of $700,000 in indemnity
coverage for the period of March 25, 1978 to April 26,
1978, for which Vanderbilt would be considered to be
self-insured. It further found that some of Vanderbilt’s
insurers were insolvent and determined that Vanderbilt
would be treated as self-insured for any liability that
would have been allocated to the insolvent insurers.
With respect to the allocation of costs between Vand-
erbilt’s insurers, the court upheld and enforced a 2002
settlement agreement between Hartford and Continen-
tal pursuant to which those primary insurers (1) allo-
cated all obligations related to the underlying claims
across their primary policies covering the 1962–1986
period and (2) applied a default date of first exposure
of January 1, 1962, for underlying claims for which the
actual date of initial exposure to Vanderbilt’s talc could
not be established. The court also appeared to adopt
that default date of first exposure on a prospective basis
with respect to pending and future claims against Vand-
erbilt.
In light of these findings and conclusions, the court
determined that the allocation of defense and indemnity
costs would be applied prospectively in the following
manner, on the basis of a total potential exposure period
of 720 months running from 1948 through 2008:8 (1) as
to defense costs, Vanderbilt would be liable for 265 of
the 720 months; (2) as to indemnity costs, Vanderbilt
would be liable for ninety-six of the 720 months; and
(3) Vanderbilt’s responsibility as to both defense and
indemnity costs would be adjusted upward for any addi-
tional periods when there was a gap in coverage or an
insolvent insurer. The court applied these same find-
ings, principles, and allocation rules to underlying
actions that alleged harms arising from nonasbestos
particulates such as silica. Specifically, the court cred-
ited testimony that all of the underlying actions,
whether on their face or through subsequent discovery
or investigation, involved claims of exposure to
asbestos.
In its Phase II decision, the court also considered the
applicability of two types of exclusions contained in
certain of Vanderbilt’s excess and umbrella policies.
The court first addressed the claim by several secondary
insurers that the pollution exclusion clauses contained
in their policies barred coverage for the underlying
actions. The court concluded that the relevant policy
language was ambiguous as applied to the asbestos
related claims and, therefore, that the exclusions did
not preclude coverage. The court also addressed the
issue of whether occupational disease exclusions con-
tained in certain secondary policies applied only to
claims brought by the policyholder’s own employees.
The court found that the exclusions were unambiguous
and that they did, in fact, bar coverage only for claims
brought by Vanderbilt’s own employees.
The court also addressed the issue of whether certain
primary policies issued by Hartford and Continental had
been exhausted. The court determined, among other
things, that Hartford’s primary policies for the period
of March 3, 1977 to March 3, 1986, and Continental’s
primary policies for the period of January 1, 1968 to
March 3, 1977, had been exhausted and that the liability
of any umbrella or excess carriers sitting above those
policies would be determined consistently with estab-
lished pro rata allocation principles.
Finally, in a separate evidentiary proceeding that was
requested by the parties prior to the commencement
of the Phase II trial, the court agreed to rule on the issue
of whether an umbrella coverage provision contained in
Continental’s secondary policies covering the period
from January 1, 1968 to May 17, 1977, obliged that
insurer to defend the underlying claims. The court con-
cluded that Continental had no duty to defend Vander-
bilt or to pay for defense costs under those policies.
At that time, the court declined to address claims relat-
ing to Continental’s defense obligations under its 1965–
1968 and 1977–1978 secondary policies or to make a
determination as to Old Republic’s defense obligations.
Following the completion of the Phase II trial, Vand-
erbilt and several defendants filed appeals and cross
appeals, challenging approximately twenty of the
court’s conclusions and findings.9 Additional facts will
be set forth as necessary.
B
Issues on Appeal
On appeal, Vanderbilt raises the following issues: 1.
Did the court properly hold Vanderbilt responsible for
a pro rata share of defense costs for the period of March
3, 1993 through April 24, 2007? 2. Did the court apply
the correct mathematical formula in calculating Vander-
bilt’s pro rata share of defense and indemnity costs? 3.
Did the court properly determine that Continental had
no duty to defend under its umbrella policies for the
period of January 1, 1968 to May 17, 1977? Vanderbilt
also has set forth alternative grounds for affirmance
with respect to several of the defendants’ cross appeals,
which are addressed to the extent necessary in this
opinion.
The issues raised by Mt. McKinley10 on cross appeal
are: 1. Did the court contravene Connecticut’s pro rata
allocation law when it (a) considered the unavailability
of insurance coverage in determining the allocation of
defense and indemnity costs (the unavailability rule),
and (b) declined to adopt an equitable exception to the
unavailability rule in light of Vanderbilt’s continued sale
of talc through 2008? 2. Did the court properly (a) con-
clude that all of the underlying claims alleged exposure
only to asbestos and (b) fail to hold Vanderbilt responsi-
ble for its pro rata share of defense and indemnity costs
for nonasbestos particulate claims? 3. Did the court
properly determine that the pollution exclusions in the
excess and umbrella insurance policies were ambigu-
ous and inapplicable to the underlying actions? 4. Did
the court properly determine that, with regard to any
claims of injury where the specific dates of first expo-
sure are unknown, the default date of first exposure
would be January 1, 1962? 5. Did the court properly
apply its findings prospectively from the date of its
Phase II decision? 6. Did the court properly preclude
the testimony of (a) a medical expert, Robert A. Kratzke,
regarding when asbestos related bodily injuries take
place, and (b) an insurance expert, George L. Priest,
regarding the economic principles of the transfer of
risk and the customs and practices in the field of insur-
ance? 7. Did the court properly enforce the 2002 settle-
ment agreement and determine that certain primary
policies issued by Hartford and Continental had been
exhausted? 8. Did the court properly admit into evi-
dence charts and spreadsheets that were created by
Vanderbilt’s expert without finding that an exception
to the hearsay rule supported their admission? 9. Did
the court apply the correct mathematical formula in
calculating Vanderbilt’s pro rata share of defense and
indemnity costs?
The issue raised by Hartford on cross appeal is:
Should the allocation rules that were set forth in the
court’s Phase II decision be applied retroactively to the
date on which its primary coverage was exhausted to
assure that Hartford’s policy limits are not reopened?
The issues raised by Continental on cross appeal are:
(1) Did the court properly decline to rule that Continen-
tal’s obligation under its 1965–1968 umbrella-excess
policy was only to reimburse Vanderbilt for the defense
costs that Vanderbilt had paid for defending claims that
implicated Continental’s indemnification obligations?
(2) Did the court properly decline to rule that Continen-
tal did not have a duty to defend Vanderbilt under its
1977–1978 excess policy? (3) Did the trial court properly
create allocation blocks of 720 months for defense and
indemnification costs?
The issue raised by National Casualty on cross appeal
is: Did the court properly conclude that the occupa-
tional disease exclusions in certain umbrella and excess
policies apply only to claims brought by Vanderbilt’s
own employees?
The issue raised by Old Republic on cross appeal is:
Should this court direct the trial court to determine Old
Republic’s defense obligations prior to commencing any
additional phases of the trial?
For the reasons set forth hereinafter, we reverse the
rulings of the trial court (1) holding Vanderbilt responsi-
ble for defense costs for the period of March 3, 1993
through April 24, 2007, (2) applying a default date of
first exposure of January 1, 1962, for pending and future
claims, and (3) concluding that the occupational disease
exclusions apply only to claims brought by Vanderbilt’s
own employees. We also modify in various respects the
mathematical formula and allocation method that the
court used to apportion defense and indemnity costs
between Vanderbilt and its insurers, and we clarify the
prospective nature of the court’s determinations.
Finally, we encourage the trial court, in its discretion,
to determine Old Republic’s defense obligations prior
to commencing any additional phases of the trial. We
affirm the rulings of the court in all other respects.
II
GOVERNING LEGAL PRINCIPLES
In the interests of avoiding repetition, we begin by
noting certain well established principles that will be
relevant to many of the issues in these appeals. In the
parts of the opinion that follow, we set forth additional
rules of law as relevant to particular claims.
A
Principles of Insurance Law
‘‘An insurance policy is to be interpreted by the same
general rules that govern the construction of any written
contract . . . . In accordance with those principles,
[t]he determinative question is the intent of the parties,
that is, what coverage the . . . [insured] expected to
receive and what the [insurer] was to provide, as dis-
closed by the provisions of the policy. . . . If the terms
of the policy are clear and unambiguous, then the lan-
guage, from which the intention of the parties is to be
deduced, must be accorded its natural and ordinary
meaning. . . . Under those circumstances, the policy
is to be given effect according to its terms.’’ (Internal
quotation marks omitted.) Lexington Ins. Co. v. Lexing-
ton Healthcare Group, Inc., 311 Conn. 29, 37–38, 84
A.3d 1167 (2014).
‘‘When interpreting [an insurance policy], we must
look at the contract as a whole, consider all relevant
portions together and, if possible, give operative effect
to every provision in order to reach a reasonable overall
result.’’ (Internal quotation marks omitted.) Id., 38. ‘‘It
is axiomatic that a contract of insurance must be viewed
in its entirety, and the intent of the parties for entering
it derived from the four corners of the policy.’’ (Internal
quotation marks omitted.) Springdale Donuts, Inc. v.
Aetna Casualty & Surety Co. of Illinois, 247 Conn. 801,
805, 724 A.2d 1117 (1999).
‘‘In determining whether the terms of an insurance
policy are clear and unambiguous, [a] court will not
torture words to import ambiguity where the ordinary
meaning leaves no room for ambiguity . . . . Similarly,
any ambiguity in a contract must emanate from the
language used in the contract rather than from one
party’s subjective perception of the terms. . . . As with
contracts generally, a provision in an insurance policy
is ambiguous when it is reasonably susceptible to more
than one reading.’’ (Internal quotation marks omitted.)
Lexington Ins. Co. v. Lexington Healthcare Group,
Inc., supra, 311 Conn. 38.
‘‘[Words] do not become ambiguous simply because
lawyers or laymen contend for different meanings. . . .
Words also do not become ambiguous simply because
a contract fails to define them; even when undefined,
words are not ambiguous if common usage or our case
law gives them a single meaning.’’ (Citation omitted;
internal quotation marks omitted.) New London County
Mutual Ins. Co. v. Nantes, 303 Conn. 737, 753, 36 A.3d
224 (2012).
‘‘[C]ontext is often central to the way in which policy
language is applied; the same language may be found
both ambiguous and unambiguous as applied to differ-
ent facts. . . . Language in an insurance contract,
therefore, must be construed in the circumstances of
[a particular] case, and cannot be found to be ambigu-
ous [or unambiguous] in the abstract. . . . In sum, the
same policy provision may shift between clarity and
ambiguity with changes in the event at hand . . . and
one court’s determination that [a] term . . . was unam-
biguous, in the specific context of the case that was
before it, is not dispositive of whether the term is clear
in the context of a wholly different matter.’’ (Citations
omitted; emphasis omitted; internal quotation marks
omitted.) Lexington Ins. Co. v. Lexington Healthcare
Group, Inc., supra, 311 Conn. 41–42.
Our Supreme Court and this court also have recog-
nized certain rules of construction specific to the inter-
pretation of insurance contracts. First, ‘‘[i]t is a basic
principle of insurance law that policy language will
be construed as laymen would understand it and not
according to the interpretation of sophisticated under-
writers . . . . [T]he policyholder’s expectations
should be protected as long as they are objectively
reasonable from the layman’s point of view.’’ (Internal
quotation marks omitted.) R.T. Vanderbilt Co. v. Conti-
nental Casualty Co., 273 Conn. 448, 462–63, 870 A.2d
1048 (2005); Nationwide Mutual Ins. Co. v. Pasiak, 161
Conn. App. 86, 96, 127 A.3d 346 (2015), cert. granted
on other grounds, 320 Conn. 913, 130 A.3d 266 (2016).
Second, and relatedly, when the plain language of an
insurance policy is found to be ambiguous, courts
‘‘apply the contra proferentem rule and interpret a pol-
icy against the insurer. . . . Indeed, our interpretation
of ambiguous policy language in favor of coverage
under the doctrine of contra proferentem has become
near axiomatic in insurance coverage disputes.’’ (Cita-
tion omitted; internal quotation marks omitted.) Con-
necticut Ins. Guaranty Assn. v. Fontaine, 278 Conn.
779, 788–89, 900 A.2d 18 (2006). ‘‘The premise behind
[this] rule is simple. The party who actually does the
writing of an instrument will presumably be guided by
his own interests and goals in the transaction. He may
choose shadings of expression, words more specific
or more imprecise, according to the dictates of these
interests. . . . A further, related rationale for the rule
is that [s]ince one who speaks or writes, can by exact-
ness of expression more easily prevent mistakes in
meaning, than one with whom he is dealing, doubts
arising from ambiguity are resolved in favor of the latter.
. . . This canon . . . is more rigorously applied in the
context of insurance contracts than in other contracts.’’
(Citation omitted; internal quotation marks omitted.)
Israel v. State Farm Mutual Automobile Ins. Co., 259
Conn. 503, 508–509, 789 A.2d 974 (2002).
Nevertheless, ‘‘[t]his rule of construction that favors
the insured in case of ambiguity applies only when the
terms are, without violence, susceptible of two [equally
reasonable] interpretations . . . .’’ (Internal quotation
marks omitted.) Misiti, LLC v. Travelers Property
Casualty Co. of America, 308 Conn. 146, 155, 61 A.3d
485 (2013). Moreover, ‘‘the rule [of contra proferentem]
should be applied as a tie breaker only when all other
avenues to determining the parties’ intent have been
exhausted.’’ Connecticut Ins. Guaranty Assn. v.
Drown, 314 Conn. 161, 195, 101 A.3d 200 (2014) (Rogers,
C. J., concurring). Accordingly, when a policy provision
is facially ambiguous, the court should first apply other
tools of construction and, if relevant, consult extrinsic
evidence of the parties’ intentions before construing
the agreement against the drafter.11
Third, with respect to an insurer’s duty to defend a
claim brought against the insured, we note that ‘‘[u]nder
the well established four corners doctrine, the duty to
defend is broader than the duty to indemnify.’’ (Internal
quotation marks omitted.) Travelers Casualty & Surety
Co. of America v. Netherlands Ins. Co., 312 Conn. 714,
739, 95 A.3d 1031 (2014) (Netherlands). ‘‘[A]n insurer’s
duty to defend [is to be] determined by reference to
the allegations contained in the [underlying] complaint.
. . . [T]he obligation of the insurer to defend does not
depend on whether the injured party will successfully
maintain a cause of action against the insured but on
whether he has, in his complaint, stated facts which
bring the injury within the coverage. If the latter situa-
tion prevails, the policy requires the insurer to defend,
irrespective of the insured’s ultimate liability. . . .
Hence, if the complaint sets forth a cause of action
within the coverage of the policy, the insurer must
defend. . . . On the other hand, if the complaint alleges
a liability which the policy does not cover, the insurer
is not required to defend. . . . Thus, the duty to defend
is triggered whenever a complaint alleges facts that
potentially could fall within the scope of coverage
. . . .
‘‘Despite the breadth of this approach, we have recog-
nized the necessary limits of this rule, as we will not
predicate the duty to defend on a reading of the com-
plaint that is . . . conceivable but tortured and unrea-
sonable. . . . Thus, although an insurer is not excused
from its duty to defend merely because the underlying
complaint does not specify the connection between the
stated cause of action and the policy coverage . . . the
insurer has a duty to defend only if the underlying
complaint reasonably alleges an injury that is covered
by the policy.’’ (Citations omitted; emphasis omitted;
internal quotation marks omitted.) Misiti, LLC v. Trav-
elers Property Casualty Co. of America, supra, 308
Conn. 155–56.
B
Complex Asbestos Litigation
In the parts of the opinion that follow, we discuss at
length the legal rules that govern insurance disputes
arising from third party claims alleging long-tail asbes-
tos related diseases. At the outset, however, we recog-
nize that the unique logistical, jurisprudential, and
financial challenges posed by asbestos litigation; see
American Special Risk Ins. Co. v. A-Best Products,
Inc., 975 F. Supp. 1019, 1020–21 (N.D. Ohio 1997), aff’d,
Docket Nos. 97-3919, 97-3920, 97-4004, 1998 WL 833750
(6th Cir. November 19, 1998) (decision without pub-
lished opinion, 166 F.3d 1213 [6th Cir. 1998]); require
that courts adopt rules that, while principled and fair,
also are pragmatic and easily administered. See In re
School Asbestos Litigation, 789 F.2d 996, 1011 (3d Cir.)
(highly unusual nature of asbestos litigation requires
novel and flexible solutions), cert. denied sub nom.
National Gypsum Co. v. School District of Lancaster,
479 U.S. 915, 107 S. Ct. 318, 93 L. Ed. 2d 291 (1986), and
cert. denied sub nom. Celotex Corp. v. School District of
Lancaster, 479 U.S. 852, 107 S. Ct. 182, 93 L. Ed. 2d 117
(1986); Continental Casualty Co. v. Synalloy Corp., 667
F. Supp. 1523, 1538 (S.D. Ga. 1983) (endeavoring to
provide guidance ‘‘carefully, methodically and with an
eye toward practical solutions’’); Owens-Illinois, Inc.
v. United Ins. Co., 138 N.J. 437, 477–78, 650 A.2d 974
(1994) (asbestos related injury cases ‘‘demand special
attention . . . [and] specialized treatment’’); Cham-
pion Dyeing & Finishing Co. v. Centennial Ins. Co.,
355 N.J. Super. 262, 271, 810 A.2d 68 (App. Div. 2002)
(Champion) (allocation mechanism must be efficient
and administratively manageable). We consider the
issues raised by the present appeals from that per-
spective.
C
Standard of Review
Unless otherwise noted, the claims at issue in these
appeals concern the proper construction of insurance
policies or present other pure questions of law, which
we review de novo. See Misiti, LLC v. Travelers Prop-
erty Casualty Co. of America, supra, 308 Conn. 154.
When the trial court has resolved factual disputes that
underlie coverage issues, however, those findings are
reviewable on appeal subject to the clearly erroneous
standard. National Grange Mutual Ins. Co. v. Santani-
ello, 290 Conn. 81, 90, 961 A.2d 387 (2009). ‘‘Such a
finding of fact will not be disturbed unless it is clearly
erroneous in view of the evidence and pleadings in the
whole record . . . . [A] finding is clearly erroneous
when there is no evidence in the record to support it
. . . or when although there is evidence to support it,
the reviewing court on the entire evidence is left with
the definite and firm conviction that a mistake has been
committed. . . . Thus . . . [i]t is within the province
of the trial court, when sitting as the fact finder, to
weigh the evidence presented and determine the credi-
bility and effect to be given the evidence. . . . Credibil-
ity must be assessed . . . not by reading the cold
printed record, but by observing firsthand the witness’
conduct, demeanor and attitude. . . . An appellate
court must defer to the trier of fact’s assessment of
credibility because [i]t is the [fact finder] . . . [who
has] an opportunity to observe the demeanor of the
witnesses and the parties; thus [the fact finder] is best
able to judge the credibility of the witnesses and to
draw necessary inferences therefrom.’’ (Citation omit-
ted; internal quotation marks omitted.) Id., 90–91.
Last, ‘‘[t]he standard under which we review eviden-
tiary claims depends on the specific nature of the claim
presented. . . . To the extent a trial court’s admission
of evidence is based on an interpretation of [law], our
standard of review is plenary. . . . We review the trial
court’s decision to admit evidence, if premised on a
correct view of the law, however, for an abuse of discre-
tion.’’ (Citations omitted; internal quotation marks omit-
ted.) Statewide Grievance Committee v. Burton, 299
Conn. 405, 415, 10 A.3d 507 (2011). When ‘‘a trial court’s
admission of evidence is based on an interpretation of
the [Connecticut] Code of Evidence, our standard of
review is plenary.’’ State v. Saucier, 283 Conn. 207, 218,
926 A.2d 633 (2007).
III
ALLOCATION OF DEFENSE AND INDEMNITY COSTS
We begin by addressing a series of claims raised by
Vanderbilt and certain of the defendants challenging
various aspects of the methodology that the trial court
used to allocate defense and indemnity costs among
the parties. Vanderbilt argues on appeal that the trial
court improperly held it responsible for defense costs
for the period March 3, 1993 through April 24, 2007,
when, Vanderbilt contends, defense cost coverage was
unavailable to companies with a potential exposure to
third party asbestos litigation. For its part, Mt. McKin-
ley12 contends that the trial court improperly (1) held as
a matter of law that the continuous trigger of coverage
theory governs long-tail asbestos related disease claims
in Connecticut; (2) applied an unavailability of insur-
ance rule without an equitable exception for companies
that continued to engage in asbestos related businesses
after 1985, and also applied that rule to underlying
actions alleging harms arising from exposure to nonas-
bestos particulates; (3) declined to consider expert tes-
timony with respect to both the trigger of coverage
question and the proposed equitable exception to the
unavailability rule; (4) set an unreasonable default date
of first exposure of January 1, 1962, for underlying
actions that did not allege a specific date and enforced
a settlement agreement between the primary insurers
that applied that default date to claims arising prior to
1962; and (5) applied its findings and allocation rules
on a prospective basis. In addition, both Vanderbilt and
several of the defendants contend that the trial court
applied an incorrect mathematical formula when calcu-
lating Vanderbilt’s pro rata share of defense and indem-
nity costs, although Vanderbilt and the defendants
challenge different aspects of the court’s allocation
formula.
For the reasons presented hereinafter, we agree with
Vanderbilt that it should not have been allocated any
post-1986 defense costs. We also agree with certain
critiques of the trial court’s allocation formula,13 and
we clarify the prospective application of the court’s
decisions. In addition, we agree with Mt. McKinley that
it is unreasonable to continue to apply a default date
of first exposure of January 1, 1962, to pending and
future claims. We otherwise reject the defendants’ chal-
lenges to the allocation methodology applied by the
trial court.
As we noted in part II B of this opinion, the adjudica-
tion of insurance coverage disputes arising from long-
tail toxic torts such as asbestos related disease presents
a number of complex and unique legal questions. The
trial court confronted several of these questions in its
Phase I and Phase II decisions, in which the court sought
to determine what share of the defense and indemnity
costs, respectively, should be borne by Vanderbilt as
the insured and what share should be borne by its
various insurers. In adopting an allocation methodol-
ogy, the court addressed four general questions. First,
in the case of progressive, long latency diseases such
as asbestosis and asbestos related cancers that do not
manifest until years or even decades after exposure to
a toxic agent, when does injury occur so as to trigger
insurance coverage? Second, under a pro rata allocation
approach pursuant to which a policyholder is liable for
periods when it self-insures, should the policyholder
also be held liable for periods when coverage is unavail-
able? Third, what default date of first exposure should
be applied when neither the complaint nor the discovery
process reveals when an underlying plaintiff was first
allegedly exposed to a toxic agent? Fourth, according
to what mathematical formula should the respective
liabilities of the insured and the various insurers be cal-
culated?
In this part of the opinion, we address each of these
substantive questions, as well as related challenges to
the trial court’s specific factual findings, legal conclu-
sions, and evidentiary rulings. We also consider whether
the findings and conclusions adopted by the trial court,
as modified herein, apply to underlying actions alleging
harms arising from exposure to nonasbestos particu-
lates such as silica, and to what extent the court’s find-
ings and conclusions should be applied on a prospective
only basis.
A
Trigger of Coverage
The first task in evaluating the parties’ obligations
with respect to underlying asbestos actions is to deter-
mine what event or events ‘‘trigger’’ an insurer’s defense
and indemnification obligations under the many insur-
ance policies that Vanderbilt has purchased over the
years. The trial court concluded that established Con-
necticut precedent compelled it to adopt a continuous
trigger theory, under which every insurance policy in
effect from the date a claimant is first exposed to asbes-
tos until the date—often decades later—when the
claimant manifests an asbestos related disease is on
the risk for defense and liability costs. On appeal, Mt.
McKinley argues that (1) the trial court was not bound
by Connecticut precedent to adopt any particular trig-
ger theory, (2) the trial court should have allowed
expert medical testimony on the trigger issue, and (3)
this court should adopt an injury-in-fact trigger theory
with respect to asbestos related cancers,14 under which
only those policies in effect when a complainant’s con-
dition becomes malignant must bear a share of liability
and defense costs. We agree that our Supreme Court
has not yet adopted continuous trigger as the law of
Connecticut but, for the reasons discussed hereinafter,
we adopt that theory of coverage as a matter of law
for all asbestos related disease claims.15
Trigger of coverage is a concept used by courts to
determine whether and when an event implicates a
particular insurance policy. The term ‘‘trigger’’ does not
appear in any of the policies, but is instead ‘‘a label for
the event or events that under the terms of the insurance
policy determines whether a policy must respond to a
claim in a given set of circumstances.’’ (Internal quota-
tion marks omitted.) Owens-Illinois, Inc. v. United Ins.
Co., supra, 138 N.J. 447; see also A.W. Chesterton Co.
v. Massachusetts Insurers Insolvency Fund, 445 Mass.
502, 518, 838 N.E.2d 1237 (2005) (‘‘[t]rigger of coverage
is a term of art whereby the court describes what must
occur during the policy period for potential coverage
to commence under the specific terms of an insurance
policy’’ [internal quotation marks omitted]).
The comprehensive general liability policies at issue
in the present case typically obligate the issuers to
reimburse Vanderbilt for defense and indemnity costs
for bodily injuries to third parties caused by an ‘‘occur-
rence.’’16 For example, one typical policy, a March 3,
1983 umbrella policy written by the Gibraltar Casualty
Company (Gibraltar), the predecessor of Mt. McKinley,
provides in relevant part: ‘‘[The insurer] will pay on
behalf of the [i]nsured the [u]ltimate [n]et [l]oss, in
excess of the applicable underlying or retained limit,
which the [i]nsured shall become legally obligated to
pay as damages because of . . . [p]ersonal [i]njury
. . . to which this policy applies, caused by an [o]ccur-
rence.’’ The policy further defines an occurrence as ‘‘an
accident, a happening, an event, or a continuous or
repeated exposure to conditions which results during
the policy period in [p]ersonal [i]njury . . . .’’ (Empha-
sis added.)
According to the plain language of the policy, then,
an insurer is liable only for those costs that result from
injuries sustained while the policy is in effect. Indeed,
it is black letter law that ‘‘[u]nder a liability policy pro-
viding coverage for each [injury] during the policy
period, a risk insured against by the policy must occur
during the policy period in order for coverage to be
triggered.’’ 7 S. Plitt et al., Couch on Insurance (3d Ed.
Rev. 2013) § 102:23, p. 102-73.
In the case of common third party liability claims
such as premises liability, dog bites, and motor vehicle
accidents, there typically is little doubt whether per-
sonal injuries alleged to have resulted from an incident
originated during a particular policy period. See J.
Michaels et al., ‘‘The Avoidable Evils of ‘All Sums’ Liabil-
ity for Long-Tail Insurance Coverage Claims,’’ 64 U.
Kan. L. Rev. 467, 467 (2015). With respect to progressive,
long latency injuries such as asbestos related disease,
by contrast, the trial court recognized that it is far more
difficult to pinpoint exactly when the alleged injuries
occurred and, therefore, whether they trigger coverage
under any particular liability policy. See id.; see also
Continental Casualty Co. v. Employers Ins. Co. of Wau-
sau, 60 A.D. 3d 128, 144–45, 871 N.Y.S.2d 48 (2008),
leave to appeal denied, No. 2009-696, 2009 WL 3428552
(N.Y. October 27, 2009) (decision without published
opinion, 13 N.Y.3d 710, 918 N.E.2d 962, 890 N.Y.S.2d
447 [2009]). This is true for a number of reasons.
First, asbestos exposure has been linked to various
different diseases—asbestosis, mesothelioma, and lung
cancer, among others—each of which has a distinct
etiology, symptomology, and course of progression. See
29 C.F.R. § 1910.1001, App. G; 29 C.F.R. § 1926.1101,
App. I; One Beacon American Ins. Co. v. Huntsman
Polymers Corp., 276 P.3d 1156, 1159 (Utah App.), cert.
denied, No. 20120354, 2012 WL 4466557 (Utah July 30,
2012) (decision without published opinion, 285 P.3d
1229 [Utah 2012]); A. Bernstein, ‘‘Asbestos Achieve-
ments,’’ 37 Sw. U. L. Rev. 691, 706–707 (2008). A claimant
in an underlying action may allege that asbestos expo-
sure resulted in more than one of these diseases, or
may fail to specify the precise nature of the injuries
alleged. See, e.g., Complaint of Catherine Mesker (alleg-
ing that decedent suffered ‘‘asbestosis, carcinoma,
pneumoconiosis and emphysema’’); Complaint of Anto-
nio Ciaramitaro (alleging only that complainant ‘‘suffers
from an ‘asbestos-related disease’ ’’). Accordingly, it
often is difficult to assess at what point the injuries in
any particular case are alleged to have commenced and
it is almost impossible to generalize across thousands
of underlying cases.
Second, the latency period for asbestos related dis-
eases can be extremely long. Mesothelioma, for exam-
ple, may not manifest until forty years or more after
exposure. See 29 C.F.R. § 1926.1101, App. I; Ricigliano
v. Ideal Forging Corp., 280 Conn. 723, 744, 912 A.2d
462 (2006). In addition, many individuals who develop
asbestos related disease are repeatedly exposed to mul-
tiple sources of asbestos over the course of several
years or more. See Continental Casualty Co. v. Employ-
ers Ins. Co. of Wausau, supra, 60 A.D. 3d 144. It
is not well established what threshold of exposure must
be reached in order for disease to manifest. See Keene
Corp. v. Ins. Co. of North America, 667 F.2d 1034, 1040
(D.C. Cir. 1981), cert. denied, 455 U.S. 1007, 102 S. Ct.
1644, 71 L. Ed. 2d 875 (1982); A. Bernstein, supra, 37
Sw. U. L. Rev. 707. This makes it exceedingly difficult,
when all that is known is the date that disease mani-
fested or was diagnosed, to back in to a reasonable
estimate of the date at which exposure crossed a thresh-
old level of toxicity. See Continental Casualty Co. v.
Employers Ins. Co. of Wausau, supra, 148; see also
Green v. General Dynamics Corp., 245 Conn. 66, 72–73,
712 A.2d 938 (1998) (explaining that exact time of origin
of occupational diseases is necessarily obscure); 7 S.
Plitt et al., supra, § 102:24, p. 102-84 (‘‘[t]he problem of
determining when the coverage-triggering event
occurred is particularly acute where there is a lengthy
interval between an injury from a wrongful act and the
manifestation of that injury in ascertainable damage
which forms the basis for a claim against the insured’’).
Third, and perhaps most importantly, the etiology of
the primary asbestos related diseases is complex and
not yet fully understood. See A. Bernstein, supra, 37
Sw. U. L. Rev. 707. As we explain more fully hereinafter,
there continues to be a split of opinion, even among
medical experts, as to what constitutes the initial
‘‘injury’’ in these types of cases.
The determination of which insurance policies are
triggered in a case alleging asbestos related disease
thus requires that courts answer two questions. First,
at what point or points can the injury be said to occur?
If, for example, a hypothetical complainant inhales
asbestos dust in year one; subsequently undergoes a
series of asbestos related genetic mutations; develops
a latent malignancy in year fifteen; and is diagnosed
with asbestos related lung cancer in year twenty when
symptoms begin to appear; should any defense and
indemnity costs be allocated to the insurance policy or
policies in effect in (1) year one, when the complainant
was first exposed to asbestos (the exposure or initial
exposure theory), (2) year fifteen, when malignancy
emerged (the injury-in-fact theory), (3) year twenty,
when the disease manifested and was diagnosed (the
manifestation theory), or (4) every year from one
through twenty (the continuous or multiple trigger the-
ory)? Second, should that question be resolved by a
reviewing court as a matter of law, or by the trier of
fact as a question of medical fact?
1
Whether There Is Controlling
Connecticut Precedent
Before we address these questions, we briefly con-
sider Vanderbilt’s contention that they already have
been resolved by our Supreme Court. Specifically, Vand-
erbilt asserts that, in Security Ins. Co. of Hartford v.
Lumbermens Mutual Casualty Co., 264 Conn. 688, 826
A.2d 107 (2003) (Security), the Supreme Court adopted
the continuous trigger theory as the law governing all
asbestos related bodily injury claims in Connecticut.
Mt. McKinley counters that the question of trigger was
not before the Supreme Court in Security and remains
unresolved. We agree with Mt. McKinley.
Like the present case, Security involved a dispute
over the proper method of allocating defense costs for
underlying asbestos actions alleging long latency bodily
injury claims that potentially implicated multiple insur-
ance policies. Id., 690. The trial court in Security con-
cluded that, under Connecticut law, insurance costs for
long-tail injuries should be allocated according to a pro
rata method rather than a so-called ‘‘all sums’’ or ‘‘joint
and several’’ liability method. Id., 697–98. In jurisdic-
tions that follow an all sums approach, the policyholder
is permitted to collect its total liability, up to the policy
limit, under any policy in effect during the periods in
which the progressive injuries occurred. In re Viking
Pump, Inc., 27 N.Y.3d 244, 255–56, 52 N.E.3d 1144, 33
N.Y.S.3d 118 (2016). The burden then falls to the insurer
from whom the policyholder chooses to recover to seek
contribution from the insurers that issued other trig-
gered policies. Id. Under pro rata allocation, by contrast,
losses are allocated equally at the outset between all
of the years (or months, etc.) during which the long-
tail injuries occurred. Id., 256. Another key difference
between the two allocation methods is that, under the
all sums approach, a policyholder bears no liability for
periods of injury during which it is uninsured; it is free
to call upon one triggered policy and then the next,
seriatim, until all of the policy limits are exhausted. See
Security Ins. Co. of Hartford v. Lumbermens Mutual
Casualty Co., supra, 264 Conn. 701–702. In most pro
rata jurisdictions, by contrast, the insured is liable for
costs attributable to injuries that occurred during any
period when it was uninsured or underinsured. Id.
Having adopted a pro rata allocation scheme, the
trial court in Security further concluded that (1) the
underlying litigation ‘‘involved a continuous trigger situ-
ation such that all asbestos related injury policies issued
during the extended exposure period have been trig-
gered for coverage and all companies that issued such
policies are responsible for defense costs’’; (internal
quotation marks omitted) id., 696–97; and (2) defense
costs should be prorated to the insured with respect
to periods for which the insured had lost or destroyed
its policies or otherwise assumed the obligations of an
insurer. Id., 690. On appeal, the policyholder did not
challenge the former conclusion, but instead challenged
only the trial court’s adoption of a pro rata allocation
scheme. Id., 699–706. Moreover, our Supreme Court,
which delineated the four prevailing trigger theories in
a footnote, took no position as to whether the trial court
had properly adopted the continuous trigger theory. See
id., 697 n.12. Because the question of trigger was not
at issue on appeal and the Supreme Court did not opine
thereon, we agree with Mt. McKinley that Security does
not establish continuous trigger or any other trigger
theory as the law of Connecticut. See Dept. of Public
Safety v. Freedom of Information Commission, 103
Conn. App. 571, 582 n.10, 930 A.2d 739 (‘‘[i]t is axiomatic
that an appellate decision stands only for those issues
presented to, and considered by, the court in that partic-
ular appeal’’), cert. denied, 284 Conn. 930, 934 A.2d
245 (2007).
We also are not persuaded by Vanderbilt’s argument
that our Supreme Court adopted the continuous trigger
theory in Netherlands. Because Netherlands addressed
a fundamentally different sort of underlying claim—the
state of Connecticut sued a masonry contractor, among
other defendants, for water damage resulting from neg-
ligent construction of a public building—it is not clear
that any trigger of coverage theory adopted in that case
would govern long-tail personal injury claims such as
asbestos related disease. See John Crane, Inc. v. Admi-
ral Ins. Co., 991 N.E.2d 474 (Ill. App. 2013) (noting that
different trigger theories may apply to personal injury
and property damage claims), leave to appeal denied,
Nos. 116207, 116209, 116211, 2013 WL 5497780, 5497781,
5497785 (Ill. September 25, 2013) (decisions without
published opinions, 996 N.E.2d 11 and 996 N.E.2d 14
[Ill. 2013]); Trustees of Tufts University v. Commercial
Union Ins. Co., 415 Mass. 844, 855, 616 N.E.2d 68 (1993)
(similar). In any event, we do not read Netherlands as
having definitively adopted any particular trigger
theory.
In Netherlands, the defendant insurance company
maintained that our Supreme Court had adopted an
initial exposure trigger theory in Security, whereas the
plaintiff contended that Security adopted an injury-in-
fact theory. Travelers Casualty & Surety Co. of
America v. Netherlands Ins. Co., supra, 312 Conn. 752.
Consistent with our own analysis, however, the
Supreme Court clarified that, in Security, it merely
‘‘upheld a pro rata allocation based on the trial court’s
unchallenged decision that the continuous trigger the-
ory applied’’; (emphasis added) id., 754–55; and did not
endorse one exposure theory to the exclusion of others.
Id., 754 n.33. It is also noteworthy that, in resolving the
dispute in favor of the plaintiffs, our Supreme Court
stated that ‘‘[the plaintiffs argue] that in [Security] we
actually adopted . . . an injury-in-fact trigger, under
which progressive injuries that span multiple policy
periods trigger all policies in effect during the progres-
sion of the injury . . . . We agree with [the plaintiffs],
and conclude that, consistent with the continuous trig-
ger situation addressed in Security . . . the trial court
properly allocated the insurers’ pro rata shares . . . .’’
(Emphasis added; internal quotation marks omitted.)
Id., 752–53. The court did not explain why it appeared
to conflate two distinct trigger theories—injury-in-fact
and continuous trigger—nor did it purport to adopt, or
provide any rationale for adopting, one theory or the
other as the law of Connecticut. Accordingly, we believe
that the most reasonable interpretation of the Nether-
lands decision is that our Supreme Court merely (1)
upheld the trial court’s use of an injury-in-fact trigger
theory as reasonable under the specific facts of that
case and (2) recognized that the application of an injury-
in-fact trigger by the trial court in Netherlands was not
inconsistent with the application of a continuous trigger
theory by the trial court in Security.17 We therefore
agree with Mt. McKinley that whether continuous trig-
ger or some other trigger theory should govern asbestos
related insurance claims remains an open question in
Connecticut.
2
Whether Trigger of Coverage Is Question of Law
or Fact, and Whether Expert Testimony of
Dr. Kratzke Was Properly Excluded
Although the parties focus their attention on the ques-
tion of which trigger theory should apply to long-tail
personal injury claims, we begin our analysis with the
predicate question of whether that question is one of
fact or law. We conclude that the efficient administra-
tion of justice requires that, like the majority of our
sister courts, we resolve the question as a matter of
law, at least with respect to asbestos related claims.18
For this reason, we conclude that the trial court prop-
erly excluded expert testimony on the subject.
The following additional procedural facts are relevant
to our resolution of this issue. During both the Phase
I and Phase II trials, Mt. McKinley offered the expert
testimony of Robert Kratzke, a medical oncologist, to
educate the court about recent advances in scientific
knowledge regarding the etiology of cancer, including
diseases such as lung cancer and mesothelioma that are
strongly correlated to asbestos inhalation. According
to Mt. McKinley’s expert disclosure and proffers, Dr.
Kratzke would have testified as follows. Since approxi-
mately the turn of the millennium, much has been
learned about the genesis and progression of cancer.
Cancer is largely a disease of acquired genetic muta-
tions. Everyone experiences numerous genetic muta-
tions as a result of random gene transcription errors
during the ordinary cell division process, and people
also can experience mutations as a result of exposure
to carcinogens. The vast majority of mutations caused
by asbestos, even mutations to cancer-relevant genes,
are not harmful and do not result in injury, sickness,
or death. Rather, for cancer to occur there must be
multiple mutations to an individual cell line and, in
Kratzke’s opinion, there is neither injury to the body
nor disease until the final cancer-relevant mutation
takes place.
Kratzke further would have testified that it is impossi-
ble to determine when a cancerous cell line experienced
its first mutation and that, if an individual suffers multi-
ple exposures to asbestos, there is no way to determine
whether any particular exposure, including the first or
last exposure, caused a cancerous mutation. Finally,
he would have testified that, in most cases of mesotheli-
oma, the last necessary mutation that results in malig-
nancy will occur no more than two to five years before
the first cancer symptoms appear. For lung cancer, the
corresponding period is five to ten years. Therefore,
Kratzke would have opined, it is now firmly established
that most types of cancer, including those correlated to
asbestos exposure, do not go through a lengthy latency
period after the cancer comes into existence, as was
previously believed. Rather, the lengthy period between
initial exposure to a carcinogen and manifestation of
disease reflects the fact that initial mutations are not
harmful until combined over time with subsequent
mutations.
Vanderbilt filed a motion in limine to exclude Krat-
zke’s testimony, contending that the proffered testi-
mony was both irrelevant and prejudicial. The trial
court granted Vanderbilt’s motion, ruling that the testi-
mony was either irrelevant or not materially probative
of the issues before the court and, therefore, that it
would not be of assistance to the court.19 See Conn.
Code Evid. § 7-2 (expert testimony is admissible if it
will assist trier of fact in understanding evidence or
determining facts in issue); Conn. Code Evid. § 7-3
(expert testimony as to ultimate issue admissible when
trier needs expert assistance). The court’s ruling
appears to have been predicated on its belief that, in
Security, our Supreme Court adopted a continuous trig-
ger theory as the law of Connecticut and, therefore,
there was no reason for the court to entertain expert
testimony that might provide factual support for alter-
native trigger theories.
On appeal, Mt. McKinley contends that the trial court
committed reversible error by precluding Kratzke’s tes-
timony. As previously discussed, Mt. McKinley main-
tains that our Supreme Court has not adopted any
particular trigger theory as the law of Connecticut. It
further argues that, for there to be any insurance cover-
age for an underlying claim, Vanderbilt bears the burden
of establishing, as a matter of fact, that a particular
policy was triggered by bodily injury during the policy
period. More generally, Mt. McKinley argues that it
would be improper for us to adopt a particular trigger
theory as a matter of law, divorced from contemporary
scientific knowledge of the etiology and progression of
asbestos related diseases. For example, if Kratzke is
correct that initial exposure to asbestos fibers does no
damage to the human body, and that mesothelioma
does not develop until two to five years before the
disease manifests, then, in Mt. McKinley’s view, it would
be improper for us to adopt a theory, such as initial
exposure or continuous trigger, that imposes liability
on insurers who provided coverage (1) at the time of
initial exposure and (2) more than five years prior to the
manifestation of disease. A corollary of this argument is
that, in adopting a trigger of coverage theory to resolve
asbestos related insurance claims, it would be improper
for us to rely on decisions that other courts reached
decades ago, on the basis of medical and scientific
models that may since have been debunked.
Mt. McKinley’s arguments are not without merit and,
as we have explained; see part III A 1 of this opinion;
we agree that the trial court was mistaken in concluding
that it was compelled by Security to apply a continuous
trigger theory. Nevertheless, we are not persuaded that
the question of which trigger theory applies to the
underlying claims is a factual question about which
Kratzke’s testimony would have proved enlightening.20
Two questions are intertwined in Mt. McKinley’s argu-
ment. First, is it appropriate for an appellate court to
adopt a trigger of coverage theory as a matter of law,
rather than allowing the question of when injury occurs
to be resolved as a matter of fact, on a case-by-case
basis, in light of the best available scientific evidence?
Second, if we answer the first question in the affirma-
tive, does current scientific knowledge regarding the
etiology and progression of asbestos related diseases
place any restrictions on which theory or theories we
may adopt? We address each question in turn.
a
Whether Trigger of Coverage Is
Question of Law or Fact
Mt. McKinley contends that the process by which
inhalation of asbestos fibers leads to various forms of
cancer that are not diagnosable until decades later and,
in particular, whether any actual injury occurs upon
initial exposure, is a question of fact that is beyond the
knowledge of any layperson and that can be proven
only by evidence and expert testimony. For this reason,
it argues, the question of what trigger theory should
govern comprehensive general liability policies as
applied to long-tail asbestos related claims also is one
of fact that requires expert testimony. We disagree.
We begin with the standard of review. ‘‘Expert testi-
mony should be admitted when: (1) the witness has a
special skill or knowledge directly applicable to a mat-
ter in issue, (2) that skill or knowledge is not common
to the average person, and (3) the testimony would be
helpful to the court or jury in considering the issues.’’
(Internal quotation marks omitted.) Weaver v.
McKnight, 313 Conn. 393, 405–406, 97 A.3d 920 (2014).
‘‘We review a trial court’s decision to preclude expert
testimony for an abuse of discretion. . . . We afford
our trial courts wide discretion in determining whether
to admit expert testimony and, unless the trial court’s
decision is unreasonable, made on untenable grounds
. . . or involves a clear misconception of the law, we
will not disturb its decision.’’ (Citations omitted; inter-
nal quotation marks omitted.) Id., 405. However,
whether, as a general matter, expert testimony is
required to support a particular type of claim remains
a question of law that we review de novo. See Grimm
v. Fox, 303 Conn. 322, 329, 33 A.3d 205 (2012).
There are three reasons why, in our view, the trial
court properly concluded that it was not necessary to
hear Kratzke’s testimony prior to adopting a trigger of
coverage rule for the underlying actions. First, a trigger
of coverage rule defines what is meant by the policy
terms ‘‘personal injury’’ or ‘‘bodily injury’’ in the context
of a long-tail, progressive disease claim. See Keene
Corp. v. Ins. Co. of North America, supra, 667 F.2d
1043–44. It is well established that experts may not
be called to instruct the court on the meaning of a
nontechnical contract term. See Fuller v. Metropolitan
Life Ins. Co., 70 Conn. 647, 677, 41 A. 4 (1898); see also
Sagamore Group, Inc. v. Commissioner of Transporta-
tion, 29 Conn. App. 292, 299, 614 A.2d 1255 (1992) (defi-
nition of term is question of law to be determined by
court and about which expert witness is incompetent
to testify). In the present case, one typical policy defines
a covered injury simply as ‘‘bodily injury, sickness, or
disease,’’ while another insures against ‘‘bodily injury,
mental injury, mental anguish, shock, sickness, occupa-
tional disease, non-occupational disease, [and] disabil-
ity . . . .’’ There is no indication that the term ‘‘injury,’’
as defined in these policies, is intended to be a medical
term of art either generally or with respect to asbestos
related claims in particular. Accordingly, in construing
the policy language, we must look to the ordinary, dic-
tionary definition of the term. See Heyman Associates
No. 1 v. Ins. Co. of Pennsylvania, 231 Conn. 756, 771–72,
653 A.2d 122 (1995) (Heyman). Indeed, Mt. McKinley
itself appears to recognize that Kratzke was not quali-
fied to opine as to the meaning of ‘‘injury’’ in the Vander-
bilt policies.
Second, to the extent that a background understand-
ing of the nature of asbestos related diseases is helpful
in selecting among trigger of coverage theories, both
courts and commentators have recognized that expert
testimony is not required in this context because the
relevant medical facts—that (1) asbestos harms the
lungs upon inhalation, (2) mesothelioma and lung can-
cer represent the culmination of a series of genetic
mutations that accumulate over a long period of time,
and (3) malignancies emerge and begin to proliferate
upon the completion of the last necessary mutation—
are now so widely understood and incontrovertible that
many courts simply assume their truth when resolving
the trigger of coverage question. See, e.g., Owens-Illi-
nois, Inc. v. United Ins. Co., supra, 138 N.J. 453–54; D.
Ramsey, ‘‘The Trigger of Coverage for Cancer: When
Does Genetic Mutation Become ‘Bodily Injury, Sick-
ness, or Disease’?,’’ 41 Santa Clara L. Rev. 293, 307–28
(2001). Because Kratzke’s proffered testimony was fully
consistent with the accepted understanding of the etiol-
ogy and progression of asbestos related disease, it was
reasonable for the trial court to conclude, in the exer-
cise of its discretion, that no useful purpose would be
served by its admission.
This conclusion is bolstered by the fact that, among
those courts that have considered expert testimony on
the question, radically different conclusions have been
drawn from substantially similar medical evidence.
Compare, e.g., Eagle-Picher Industries, Inc. v. Liberty
Mutual Ins. Co., 682 F.2d 12, 19 (1st Cir. 1982) (adopting
manifestation trigger theory), cert. denied sub nom.
Froude v. Eagle-Picher Industries, Inc., 460 U.S. 1028,
103 S. Ct. 1279, 75 L. Ed. 2d 500 (1983); Ins. Co. of
North America v. Forty-Eight Insulations, Inc., 633
F.2d 1212, 1218–19 (6th Cir. 1980) (Forty-Eight Insula-
tions) (exposure theory), clarified on reh’g, 657 F.2d
814 (6th Cir.), cert. denied, 454 U.S. 1109, 102 S. Ct.
686, 70 L. Ed. 2d 650 (1981); Zurich Ins. Co. v. Raymark
Industries, Inc., 118 Ill. 2d 23, 42–44, 514 N.E.2d 150
(1987) (unique triple trigger theory); Continental Casu-
alty Co. v. Employers Ins. Co. of Wausau, supra, 60
A.D. 3d 128 (injury-in-fact theory).
Third, resolving the injury issue as a question of fact
on a case-by-case basis would create uncertainty and
significantly increase litigation costs. See M. Doherty,
‘‘Allocating Progressive Injury Liability Among Succes-
sive Insurance Policies,’’ 64 U. Chi. L. Rev. 257, 258
(1997). As the United States Court of Appeals for the
Sixth Circuit explained in Forty-Eight Insulations, ‘‘[i]n
each case where a plaintiff sues an asbestos manufac-
turer, a hearing could be held to determine at what
point the buildup of asbestos in the plaintiff’s lungs
resulted in the body’s defenses being overwhelmed. At
that point, asbestosis could truly be said to occur . . . .
From then on, all companies [that] insured the manufac-
turer would be treated as being on the risk . . . .
‘‘The only problem with this Solomonian interpreta-
tion is that no one wants it. The principal reason is
cost. If medical testimony as to asbestosis’ origin would
have to be taken in each of the thousands of asbestosis
cases, the cost of litigation would be prohibitive. This
appears to be especially true since many of the asbesto-
sis cases are settled before trial. In addition, it is almost
impossible for a doctor to look back and testify with
any precision as to when the development of asbestosis
crossed the line and became a disease.
‘‘The only thing on which all parties agree is that
there is a need for us to arrive at an administratively
manageable interpretation of the insurance policies—
one that can be applied with minimal need for litiga-
tion.’’ (Footnote omitted; internal quotation marks omit-
ted.) Ins. Co. of North America v. Forty-Eight
Insulations, Inc., supra, 633 F.2d 1217–18. For similar
reasons, the Sixth Circuit clarified on rehearing that
the same trigger theory should apply both to asbestosis
and to asbestos related cancers, notwithstanding the
different etiologies of those diseases. See Ins. Co. of
North America v. Forty-Eight Insulations, Inc., 657
F.2d 814, 815–16 (6th Cir. 1980), cert. denied, 454 U.S.
1109, 102 S. Ct. 686, 70 L. Ed. 2d 650 (1981); cf. N.
Andrea, ‘‘Exposure, Manifestation of Loss, Injury-in-
Fact, Continuous Trigger: The Insurance Coverage
Quagmire,’’ 21 Pepp. L. Rev. 813, 850 (1994) (absence
of unified approach to trigger of coverage theories
adversely affects insurers and insureds). A number of
other appellate courts also have resolved the trigger
issue as a matter of law, without reliance on expert
testimony. See, e.g., Commercial Union Ins. Co. v.
Sepco Corp., 765 F.2d 1543, 1546 (11th Cir. 1985);
ACandS, Inc. v. Aetna Casualty & Surety Co., 764 F.2d
968, 972 (3d Cir. 1985); Keene Corp. v. Ins. Co. of North
America, supra, 667 F.2d 1044 n.19, 1047 n.25; Owens-
Illinois, Inc. v. United Ins. Co., supra, 138 N.J. 457.
For these reasons, we are persuaded that a trigger
of coverage theory may be adopted as a matter of law
without the assistance of expert medical testimony. We
therefore turn our attention to Mt. McKinley’s argument
that it was nevertheless improper to exclude Kratzke’s
testimony because (1) whichever trigger theory we
adopt must at least be compatible with current medical
research and understanding of the etiology and progres-
sion of asbestos related diseases such as mesothelioma
and lung cancer and (2) Kratzke’s testimony, if credited,
would preclude us from adopting several of the prevail-
ing trigger theories.
b
Whether Current Medical Knowledge Contradicts
Initial Exposure or Continuous
Trigger Theories
We next consider whether, in adopting a trigger the-
ory to govern long-tail asbestos related claims, we are
precluded by contemporary medical knowledge from
selecting any of the four prevailing theories. Specifi-
cally, Mt. McKinley argues that, if Kratzke’s testimony
had been admitted, it would have been clear that neither
the initial exposure nor the continuous trigger theory
provides a medically credible account of the injuries
that actually occur as a result of asbestos inhalation.21
Vanderbilt responds that, even if we were to credit
Kratzke’s testimony, it would still be true, on the basis of
the undisputed medical facts, that bodily injury occurs
immediately upon inhalation of asbestos fibers and con-
tinues to occur until disease manifests. We agree with
Vanderbilt and conclude that current medical knowl-
edge does not preclude this court from adopting an
initial or continuous exposure theory, as well as an
injury-in-fact or manifestation theory.
Vanderbilt draws our attention to a number of key
concessions that Kratzke made during his deposition.
Kratzke acknowledged that, under the prevailing medi-
cal model, the lungs begin to exhibit an inflammatory
response within hours or days of exposure to asbestos
fibers. This inflammation occurs in individuals who
later develop mesothelioma or asbestos related lung
cancer and, importantly, Kratzke opined that the initial
inflammation probably plays a role in causing the
genetic mutations that begin to appear within a few
weeks or months after exposure and ultimately lead to
cancer. This process, by which asbestos related precan-
cerous mutations are formed, takes place throughout
the entire latency period of the disease. In its expert
disclosure, Mt. McKinley also indicated that Kratzke
would testify that this process occurs because asbestos
fibers trapped in and around the lungs provoke cell
division and the release of toxins from macrophages,
causing nearby cells to mutate.
Kratzke also testified in his deposition that, in his
view, individual cells cannot, by definition, be injured,
because ‘‘injury’’ is a term that he reserves for major
systemic diseases and traumas. Nevertheless, he
acknowledged that other physicians do speak in terms
of ‘‘damage’’ being done to cellular DNA. He also agreed
that the term ‘‘injury’’ is too ambiguous to be medically
useful when talking about changes to cellular DNA, and
he acknowledged that the lung cells of a person who
has been exposed to asbestos fibers are not ‘‘normal,’’
even during the pre-malignancy period when cancer
progenitor cells are accumulating mutations.
Kratzke’s opinions, then, were of two types. Empiri-
cally, he conceded that asbestos fibers harm the lungs in
various ways, almost from the outset. Asbestos causes
tissue inflammation, cellular division, and the release
of toxins, all of which contribute to and are a but-for
cause of the eventual development of asbestos related
malignancies in neighboring cells. Semantically, how-
ever, Kratzke indicated that oncologists such as himself
would not characterize such harms as ‘‘injuries’’ or ‘‘dis-
eases’’ until such time as the cellular damage actually
manifests as a malignancy.
As we already have explained, there is no indication
that the term ‘‘injury,’’ as used in a comprehensive gen-
eral liability policy, is intended to be a medical term of
art, much less a term of art specific to the subspecialty
of medical oncology. Moreover, as a number of our
sister courts have recognized, and as Kratzke himself
appeared to acknowledge, at what point cellular dam-
age caused by a carcinogen such as asbestos begins to
qualify as an injury or disease is a matter of perspective
even among medical experts. From the standpoint of
oncologists such as Kratzke, whose job it is to diagnose
and treat active tumors, there is no injury, sickness, or
disease until damage goes beyond the cellular level and
begins to affect entire organ systems. Kratzke explained
that he uses the term ‘‘injury’’ only with reference to
‘‘gross injur[ies] such as . . . [when] somebody has
had their finger cut off [or] somebody has been in a
car accident and tissues have been grossly disrupted.’’
By contrast, cellular biologists and pathologists, whose
job it is to study cellular structures and functions, recog-
nize that the types of damage that asbestos fibers inflict
at the cellular level are also fairly characterized as injur-
ies.22 Because there is no indication that the term
‘‘injury’’ as used in a standard form commercial general
liability policy is intended to be limited to gross injuries
of the type described by Kratzke, we conclude that his
testimony as to the distinctive meaning that clinical
oncologists place on that and other contract terms
would not illuminate our interpretation thereof. Instead,
we look to the ordinary dictionary definitions of those
terms. See Heyman Associates No. 1 v. Ins. Co. of
Pennsylvania, supra, 231 Conn. 772.
Webster’s Third New International Dictionary of the
English Language Unabridged (2002) defines ‘‘injury’’ as
‘‘an act that damages, harms, or hurts . . . .’’ It defines
‘‘sickness’’ as ‘‘the condition of being ill . . . a disor-
dered, weakened, or unsound condition . . . a form of
disease’’; and it defines ‘‘disease’’ as ‘‘an impairment of
the normal state of the living animal . . . or of any of
its components that interrupts or modifies the perfor-
mance of the vital functions . . . .’’ In light of Kratzke’s
acknowledgment that asbestos fibers cause inflamma-
tion, abnormal cellular division, and the release of tox-
ins, and that this ongoing process increases the
likelihood that malignancies will develop, we have no
difficulty concluding that asbestos exposure damages,
harms, hurts, weakens, and impairs the body, beginning
at the time of exposure and continuing throughout the
latency period until the development of malignancy and
the ultimate manifestation of cancer. See Owens-Illi-
nois, Inc. v. United Ins. Co., supra, 138 N.J. 454
(rejecting need for medical evidence because ‘‘we are
satisfied, like most American jurisdictions, that medical
science confirms that some injury to body tissue occurs
on the inhalation of asbestos fibers, and that once
lodged, the fibers pose an increased likelihood of caus-
ing or contributing to disease’’).
Accordingly, we conclude that current medical
understanding of asbestos related cancers, to which
Kratzke would have testified, is not incompatible with
any of the prevailing legal theories of trigger. For that
reason, it was not improper for the trial court to con-
clude, in its discretion, that admission of Kratzke’s
expert testimony would not assist the court in under-
standing evidence or determining facts in issue.
3
What Trigger of Coverage Theory Governs Long-Tail
Asbestos Litigation in Connecticut
Having concluded that we may adopt, as a matter of
law and a question of first impression, any of the four
prevailing trigger of coverage theories, we now consider
which of those theories should govern the pro rata
allocation of insurance obligations with respect to long-
tail asbestos litigation in Connecticut. Consistent with
the majority of our sister states,23 we adopt the continu-
ous trigger theory, under which every policy in effect,
beginning at the time of initial asbestos exposure and
extending through the latency period and up to the
manifestation of asbestos related disease, is on the risk
for defense and liability costs.
Courts that apply the continuous trigger theory to
extended latency, progressive disease claims typically
do so for one or more of three primary reasons, each
of which we find persuasive. First, courts have adopted
continuous trigger as the theory most compatible with
the prevailing understanding of the nature and etiology
of asbestosis and asbestos related cancers. As we dis-
cussed in part III A 2 b of this opinion, it is widely
accepted,24 and Kratzke’s expert testimony would have
confirmed, that asbestos fibers become lodged in the
lungs upon inhalation and, almost from the start, cause
damage of various sorts within the lung tissues: inflam-
mation, the release of toxins, and abnormal cellular
division and mutation. Importantly, asbestos fibers,
unlike many other carcinogens, remain permanently
lodged in the lungs, where they continue to cause injury.
See D. Ramsey, supra, 41 Santa Clara L. Rev. 307, 332,
337. Indeed, ‘‘asbestos-related cancers may be almost
singularly unique in the degree to which they are initi-
ated and promoted by the continuing presence of the
asbestos fibers in the lung.’’ Id., 305; see also Armstrong
World Industries, Inc. v. Aetna Casualty & Surety Co.,
45 Cal. App. 4th 1, 37, 52 Cal. Rptr. 2d 690 (1996) (‘‘[t]he
very quality that has made asbestos useful for so long,
its indestructibility, also accounts for the problems that
result in asbestos-related disease’’ [internal quotation
marks omitted]), review denied, 1996 Cal. LEXIS 4708
(Cal. August 21, 1996). Accordingly, from a purely fac-
tual standpoint, the continuous trigger theory best
reflects the fact that asbestos begins to injure the body
on a cellular level within hours or days of initial expo-
sure and contributes to the progressive worsening both
of asbestosis and of precancerous conditions until the
time that those diseases manifest. See Armstrong World
Industries, Inc. v. Aetna Casualty & Surety Co., supra,
48; J.H. France Refractories Co. v. Allstate Ins. Co.,
534 Pa. 29, 37, 626 A.2d 502 (1993); see also J. Stempel,
‘‘Assessing the Coverage Carnage: Asbestos Liability
and Insurance after Three Decades of Dispute,’’ 12
Conn. Ins. L.J. 349, 445 (2006) (‘‘continuous trigger is
the logical result of the insurance industry’s own adop-
tion of an actual injury trigger combined with the
[relentless] ability of asbestos to inflict injury over many
years’’). Our current knowledge about asbestos related
disease, then, is most consistent with the theory that
the body is continuously injured by the presence of
asbestos and the ongoing progression of disease, from
exposure through manifestation.25
The second reason that our sister courts have
adopted continuous trigger is that that theory of liability
also best expresses what is presently unknown about
the progression of asbestos related disease. Kratzke
conceded in his deposition that, in any particular case,
physicians do not know with certainty: (1) how long
after exposure to asbestos the lungs begin to develop
inflammation; (2) how long the inflammatory response
persists; (3) when precancerous mutations commence;
(4) the time frame over which precancerous mutations
occur; or (5) how long before diagnosis malignancy
develops. As one commenter summarized, ‘‘the issues
involve a series of astonishingly complex events that
unfold through the interactions of vanishingly infinitesi-
mal subcellular molecules over the course of an entire
lifetime.’’ D. Ramsey, supra, 41 Santa Clara L. Rev. 299.
On a micro level, then, there is much about the progres-
sion of asbestos related disease that is not yet fully
understood.
Furthermore, these epistemological gaps are magni-
fied at the macro level, when we are confronted with
a class action or action such as the present case, in
which many individual lawsuits are implicated. The
thousands of claimants in the underlying complaints
allege various different asbestos related diseases, each
of which has its own etiology and course of progression.
It is not always clear from the face of the complaint
which disease or diseases are alleged, and some claim-
ants allege that they were exposed to asbestos supplied
by multiple underlying defendants, at different times,
in varying amounts, and through diverse mechanisms.
See, e.g., Complaint of Joseph A. Campo. Underlying
actions may be settled without any of these questions
being squarely resolved. In most instances, then, we
simply will never know exactly when a particular claim-
ant was exposed to a particular policyholder’s asbestos,
how much of that policyholder’s asbestos was inhaled,
when that claimant contracted an asbestos related dis-
ease or diseases, and the precise relationship between
these events. See One Beacon American Ins. Co. v.
Huntsman Polymers Corp., supra, 276 P.3d 1159. The
continuous trigger theory addresses this conundrum by
assuming that, in each case, every exposure contributed
to the ongoing worsening of the disease throughout the
entire period from initial exposure to manifestation.
See J. Michaels et al., supra, 64 U. Kan. L. Rev. 472
(continuous trigger relieves policyholder of burden of
proving what share of damages from progressive dis-
ease occurred during each policy period); id., 487 (con-
tinuous trigger acknowledges uncertainty inherent in
long-tail toxic tort claims); see also Ins. Co. of North
America v. Forty-Eight Insulations, Inc., supra, 657
F.2d 815 (‘‘[M]any of the underlying plaintiffs’ com-
plaints against the manufacturers allege both cancer
and asbestosis. To [adopt a fact-based trigger theory
that would] treat cancer and asbestosis differently
would needlessly complicate settlement and defense of
the individual lawsuits. We see no reason to create more
difficulties for the parties than already exist in this
complicated case.’’).
Third, our sister courts have selected the continuous
trigger theory as the fairest and most efficient way to
distribute indemnity and defense costs among the vari-
ous policies in effect over the course of a long latency
disease claim. See Keene Corp. v. Ins. Co. of North
America, supra, 667 F.2d 1041; Montrose Chemical
Corp. v. Admiral Ins. Co., 10 Cal. 4th 645, 687, 913 P.2d
878, 42 Cal. Rptr. 2d 324 (1995), as modified on denial
of reh’g (August 31, 1995); see also Owens-Illinois, Inc.
v. United Ins. Co., supra, 138 N.J. 451 (‘‘because it
encourages all insurers to monitor risks and charge
appropriate premiums, the continuous trigger rule
appears to be the most efficient doctrine for toxic waste
cases’’ [internal quotation marks omitted]). A number
of jurists and scholars have observed that repeat players
in the field of asbestos litigation tend to adopt ‘‘fluctuat-
ing positions,’’ alternatively advocating for diametri-
cally opposed initial exposure or manifestation theories
of trigger ‘‘depend[ing] upon their economic interests
in a particular case . . . .’’ Keene Corp. v. Ins. Co. of
North America, supra, 1058 (Wald, J., concurring in
part); accord N. Andrea, supra, 21 Pepp. L. Rev. 850.
From an objective standpoint, however, we believe that
the fairest and most reasonable approach is to share
the burden of defense and indemnity costs among all
those policies on the risk over the full course of the
development and progression of a claimant’s disease.
Cf. J. Rawls, A Theory of Justice (1971) pp. 136–42 (just
distribution of burdens is that which would be adopted
by parties behind ‘‘veil of ignorance’’ as to their position
in particular case). This approach minimizes the likeli-
hood that any one insurer will be forced to shoulder
the full expense for injuries that may predominantly
have occurred either long before or long after its policy
was in effect. See N. Andrea, supra, 815–16. Relatedly,
a number of courts have applied a continuous trigger
because that theory maximizes the total resources avail-
able for recovery. See Quincy Mutual Fire Ins. Co. v.
Bellmawr, 172 N.J. 409, 434, 799 A.2d 499 (2002); 7 S.
Plitt et al., supra, § 102:24, pp. 102-109 through 102-
111; Note, ‘‘Developments in the Law—Toxic Waste
Litigation,’’ 99 Harv. L. Rev. 1458, 1578–81 (1986).
Having thoroughly reviewed the arguments for and
against the alternative theories of trigger, we are per-
suaded to join the majority of our sister courts in adopt-
ing continuous trigger as the rule governing long-tail
asbestos claims in Connecticut. We believe that contin-
uous trigger best accounts for the progressive nature
of asbestos related diseases, as both the layperson and
at least some subset of medical professionals would
consider the tissue damage and other harms imposed
throughout the development of asbestosis and asbestos
related cancers to constitute personal or bodily injuries
as defined in the standard form commercial general
liability policy. We also believe that continuous trigger
represents the fairest and most efficient means of
resolving and administering complex, multiclaimant
asbestos litigation such as the present case. Accord-
ingly, we conclude that the trial court properly applied
a continuous trigger in the present case.
B
Unavailability of Insurance Rule
As we discussed in part III A of this opinion, in Secu-
rity, our Supreme Court adopted a pro rata allocation
method for adjudicating long latency loss claims that
implicate multiple insurance policies. Security Ins. Co.
of Hartford v. Lumbermens Mutual Casualty Co.,
supra, 264 Conn. 720. Under the pro rata approach,
defense and indemnity costs are allocated among insur-
ers on the basis of their time on the risk, but are allo-
cated (prorated) to the insured for periods during which
the insured lost or destroyed its policies or was other-
wise uninsured or underinsured. See id. In this part of
the opinion, we address the parties’26 arguments as to
whether costs should be prorated to the insured for
periods when it was uninsured not by choice or negli-
gence but because insurance coverage was unavailable.
Mt. McKinley contends that there is no authority under
Connecticut law for an unavailability of insurance
exception to the pro rata allocation method and, there-
fore, that the trial court improperly exempted Vander-
bilt from liability for much of the post-1985 period.27 In
the alternative, Mt. McKinley argues that, if we adopt
an unavailability rule, we also should adopt an equitable
exception to that rule pursuant to which companies
that continued to engage in asbestos related business
after 1985, when insurance coverage for third party
asbestos claims became generally unavailable, should
not be able to benefit from that rule. At the very least,
Mt. McKinley contends, the trial court should have
allowed expert testimony on this question. Mt. McKinley
also maintains that the trial court improperly failed to
hold Vanderbilt responsible for its pro rata share of
costs for underlying claims alleging injuries arising from
silica, talc, and other nonasbestos particulate minerals.
In response, Vanderbilt submits that the trial court
adopted the correct legal rules with respect to availabil-
ity of insurance, but that the court applied those rules
improperly in concluding that defense cost coverage
was available to Vanderbilt from March 3, 1993 through
April 24, 2007. We agree with Vanderbilt.
The following additional procedural history is rele-
vant to our resolution of these claims. In its Phase I
decision, the trial court addressed the question of what
insurance coverage block applied to defense costs for
Vanderbilt’s asbestos related liabilities and for what
portions of that coverage block, if any, Vanderbilt
should be held responsible. The court proceeded on
the assumption that, under Connecticut law, a policy-
holder is liable for costs attributed to long-tail losses
alleged to have occurred during periods when it was
self-insured, underinsured, or uninsured, but that costs
should not be prorated to the insured for periods during
which coverage for a particular risk cannot be acquired
(the unavailability rule).
Consistent with those principles, the trial court made
findings as to whether defense cost coverage for asbes-
tos related claims was available to Vanderbilt from 1948
to 2008 and to what extent Vanderbilt availed itself of
such coverage. With regard to availability, the court
found that insurance companies regularly offered
occurrence based defense cost and indemnity coverage
for asbestos related claims until 1985 but that, by 1986,
such policies had become generally unavailable to com-
panies such as Vanderbilt that operated in the mining
and chemical industries. After 1985, comprehensive
general liability coverage generally was available to
companies in those industries only on a claims-made
basis28 and only with an asbestos exclusion. Despite
finding that asbestos coverage was generally unavail-
able to companies such as Vanderbilt after 1985, the
court ultimately found in its Phase I decision that asbes-
tos related defense coverage was available to Vanderbilt
between March, 1993 and April, 2007, during which
time Vanderbilt was able to obtain a limited number of
primary claims-made policies but was otherwise unin-
sured for asbestos related claims. Accordingly, and con-
sistent with its understanding of the unavailability of
insurance rule, the court concluded that Vanderbilt
would be held responsible for defense costs attributable
to the March, 1993 through April, 2007, period, but not
for the remainder of the post-1985 period when insur-
ance was unavailable. In its Phase II decision, by con-
trast, the court found that indemnity coverage was
unavailable to Vanderbilt throughout more or less the
entire 1986–2008 period and, therefore, concluded that
Vanderbilt was not responsible for any pro rata share
of the indemnity costs for that period. The court applied
these same findings with respect to underlying actions
alleging harms arising from talc, silica, and other nonas-
bestos particulates.
1
Unavailability Rule
We begin by addressing Mt. McKinley’s argument that
our state’s appellate courts have never adopted an
unavailability of insurance rule and that we should not
do so at this time. Although we agree with Mt. McKinley
that there is no controlling Connecticut precedent, we
conclude, as a matter of first impression, that the trial
court properly determined that an unavailability rule
comports with the allocation scheme adopted in Secu-
rity. Accordingly, the trial court did not err in declining
to prorate indemnity and defense costs to Vanderbilt
for periods during which insurance was unavailable.
a
Whether There Is Controlling Connecticut Precedent
As an initial matter, the parties disagree as to whether
our Supreme Court adopted an unavailability of insur-
ance rule in Security. Vanderbilt contends that the court
did adopt such a rule, whereas Mt. McKinley maintains
that the issue was not before the Supreme Court in
that case and that it remains an unresolved question
in Connecticut.
There is no question that the trial court in Security
applied an unavailability rule in the context of long-tail
asbestos litigation. Relying on Stonewall Ins. Co. v.
Asbestos Claims Management Corp., 73 F.3d 1178, 1203
(2d Cir. 1995), modified on denial of reh’g, 85 F.3d 49
(2d Cir. 1996), and Keene Corp. v. Ins. Co. of North
America, supra, 667 F.2d 1058 (Wald, J., concurring in
part), the court reasoned that long-tail costs are pro-
rated to the insured only because the insured has
elected to self-insure and thereby assume a portion of
the risk, and that those rationales do not apply when
insurance is not available. See Security Ins. Co. of Hart-
ford v. Lumbermens Mutual Casualty Co., Superior
Court, judicial district of Hartford-New Britain at New
Britain, Docket No. CV-96-0475565S, 1999 WL 545745,
*8 (July 12, 1999) (‘‘[t]he element of choice, and in turn,
the conscious decision of an insured to assume the
risks of being ‘self-insured’ is lost if the insured cannot
realistically acquire the particular coverage desired’’).
The court also opined that ‘‘[i]t is inequitable to require
an insured to assume defense costs for claims [that] it
could not have insured against, when multiple insurers
are already obligated to provide the insured with a
defense in an action.’’ Id.
On appeal, our Supreme Court held that the trial
court had properly applied a pro rata, time-on-the-risk
allocation methodology for long-tail asbestos claims
that implicate multiple policy periods. Security Ins.
Co. of Hartford v. Lumbermens Mutual Casualty Co.,
supra, 264 Conn. 699. In the course of analyzing the
allocation issue, the Supreme Court recognized in a
footnote that the trial court had cut off the allocation
block in 1985, ‘‘at which time asbestos related injury
insurance became unavailable . . . .’’ Id., 698 n.13.
Later in the decision, in a different footnote, the court
concluded that the specific allocation methodology
applied by the trial court was ‘‘reasonable . . . .’’ Id.,
720 n.17. The Supreme Court also suggested that the
trial court had applied the correct ‘‘equitable principles’’
when the trial court concluded that ‘‘[i]t would be
grossly inequitable to make [the insurers] bear the finan-
cial loss of [the policyholder’s] actions or inactions that
have rendered [the policyholder] essentially uninsured
for a period when asbestos related injury insurance
coverage was available.’’ (Emphasis added; internal
quotation marks omitted.) Id., 720. Vanderbilt reads
these portions of Security to mean that our Supreme
Court tacitly approved of the trial court’s unavailabil-
ity rule.
As Mt. McKinley correctly notes, however, the issue
of the unavailability of insurance was not before the
Supreme Court in Security and the court neither dis-
cussed the merits of nor expressly upheld an unavail-
ability rule. Accordingly, any tacit approval of the rule
in that opinion was dictum. Moreover, although certain
of the rationales that the Supreme Court articulated
when adopting a pro rata allocation system would seem
to favor an unavailability exception, others are arguably
in tension with it. Compare, e.g., id., 719 (emphasizing
that policyholder is party best positioned to determine
whether it will be, in essence, self-insured) with id.
(declining to impose on insurer ‘‘defense costs [that
arose] outside of its policy period’’ and for which the
insured never contracted). Because Security did not
expressly adopt or foreclose an unavailability rule, and
because language in the decision could reasonably be
read to support either position, we conclude that the
question remains an open one in Connecticut.
b
Whether Connecticut Applies an Unavailability
of Insurance Rule
Of those jurisdictions that have adopted a pro rata,
time-on-the-risk allocation scheme, a narrow majority
also recognize an unavailability rule.29 If one includes
those jurisdictions that follow the all sums approach,
the vast majority of our sister states do not hold an
insured accountable for a pro rata share of long-tail
losses that occur during periods when insurance is not
available. For the reasons that follow, we agree that
costs should not be prorated to the insured for periods
during which insurance is unavailable.
The primary rationale that other courts have offered
in favor of the unavailability rule is that the justifications
that support prorating costs to a policyholder during
periods of self-insurance or underinsurance simply do
not apply when insurance is not commercially available.
Proration to the insured has been justified on the
grounds that (1) policyholders should be obliged to
accept a share of the risk that they consciously elect to
assume by self-insuring; Stonewall Ins. Co. v. Asbestos
Claims Management Corp., supra, 73 F.3d 1204; (2) a
policyholder would receive an undeserved windfall if
it were to reap the benefits of insurance coverage that
it deliberately declined to purchase; Wooddale Builders,
Inc. v. Maryland Casualty Co., 722 N.W.2d 283, 297
(Minn. 2006); and (3) proration creates an incentive
for policyholders to maintain an unbroken chain of
adequate insurance coverage, which has the socially
desirable benefits of spreading risk, maximizing the
resources available to respond to injuries, and ensuring
that no single policy or insurer is made to shoulder a
disproportionate share of the costs of a long-tail injury.
See United States Fidelity & Guaranty Co. v. Treadwell
Corp., 58 F. Supp. 2d 77, 105 (S.D.N.Y. 1999); Owens-
Illinois, Inc. v. United Ins. Co., supra, 138 N.J. 472–73;
Crossmann Communities of North Carolina, Inc. v.
Harleysville Mutual Ins. Co., 395 S.C. 40, 63, 717 S.E.2d
589 (2011). Those rationales are largely inapplicable,
however, to situations in which a policyholder desires
and attempts to obtain coverage but the insurance
industry declines to supply it. See Keyspan Gas East
Corp. v. Munich Reinsurance America, Inc., 143 Ohio App.
Div. 3d 86, 93, 37 N.Y.S.3d 85 (2016).
Mt. McKinley’s principal argument against the
unavailability rule is that each insurer contracts to pay
only for those losses that occur during its policy period
and that the rule improperly allocates to insurers costs
attributable to losses arising during uninsured years,
for which the insurers have received no premiums. In
pressing this argument, Mt. McKinley relies heavily on
our Supreme Court’s statement in Security that ‘‘[n]ei-
ther the insurers nor the insured could reasonably have
expected that the insurers would be liable for losses
occurring in periods outside of their respective policy
coverage periods.’’ Security Ins. Co. of Hartford v.
Lumbermens Mutual Casualty Co., supra, 264 Conn.
710.
Our Supreme Court made this statement, however,
in discussing policyholders who opt not to procure
insurance for extended periods when insurance is
readily available; see id., 708–10; and there is no indica-
tion that the court intended the statement to apply
beyond that context. If the losses at issue in a case
such as this resulted from traditional accidents such as
a fire or a motor vehicle crash, then it would of course
be true that a policyholder could not expect an insurer
who provided coverage in, say, 1984 to defend or indem-
nify losses arising from a 1986 accident. The flaw in
Mt. McKinley’s reasoning, however, is that it fails to
recognize that progressive, long latency injuries such
as asbestos related disease are fundamentally different
from those sorts of traditional accidents. And because
the standard form comprehensive general liability poli-
cies that the insurance industry issued prior to 1986
did not anticipate or account for those differences; see
Owens-Illinois, Inc. v. United Ins. Co., supra, 138 N.J.
468–71; courts have been forced to develop a distinct
set of rules to adjudicate long-tail claims.
One important distinction is that progressive injuries
caused by asbestos are indivisible and cumulative. Ins.
Co. of North America v. Forty-Eight Insulations, Inc.,
451 F. Supp. 1230, 1242 (E.D. Mich. 1978), aff’d, 633 F.2d
1212 (6th Cir. 1980). This means that it is impossible
to identify what portion of a claimant’s bodily injury
actually occurred during which policy period. Many of
our sister courts, applying an all sums theory, have
concluded that the indivisible nature of progressive
injuries means that any insurer on the risk for any
period of time can be called upon, at the discretion of
the policyholder, to cover the entire claim. Connecticut
has adopted a more insurer friendly pro rata allocation
system, one that operates on the legal fiction that asbes-
tos related disease occurs in equal increments com-
mencing at the time of initial exposure and culminating
with the manifestation of disease. See J. Michaels et
al., supra, 64 U. Kan. L. Rev. 473 (continuous trigger
theory is legal fiction). But this legal convention does
not mean that the policy terms are somehow violated
or coverage impermissibly broadened if the allocation
rules are structured to (1) encourage policyholders to
obtain the broadest possible insurance pool to respond
to long-tail claims but (2) not punish those policyhold-
ers who, through no fault of their own, are unable to
maintain a continuous chain of coverage.
Mt. McKinley also notes that, although most of the
jurisdictions that allocate long-tail insurance costs pro
rata also have adopted an unavailability rule, several
of our sister courts have rejected such a rule. In particu-
lar, Mt. McKinley directs our attention to Boston Gas
Co. v. Century Indemnity Co., 454 Mass. 337, 910 N.E.2d
290 (2009) (Boston Gas), and Sybron Transition Corp.
v. Security Ins. of Hartford, 258 F.3d 595 (7th Cir. 2001)
(Sybron), two of the leading decisions to have rejected
an unavailability of insurance rule. Because those cases
reject the rule for very different reasons, each war-
rants attention.30
In Boston Gas, the Supreme Judicial Court of Massa-
chusetts explained why it disagreed with those courts
that have held that long-tail losses should not be allo-
cated to a policyholder for periods during which insur-
ance for the risk was not commercially available.
Boston Gas Co. v. Century Indemnity Co., supra, 454
Mass. 371. The court reasoned that the unavailability
exception ‘‘effectively provides insurance where insur-
ers made the calculated decision not to assume [a] risk
and not to accept premiums. In effect, because the
policyholder could not buy insurance, it is treated as
though it did by passing those uninsurable losses to
insured periods. This would not be equitable to insurers
if the insured purchased coverage for only a few years
where there was protracted damage.’’ (Internal quota-
tion marks omitted.) Id., 371–72. Massachusetts’ highest
court thus raised both a general concern that the
unavailability rule fails to honor an insurer’s decision
not to provide coverage as well as a specific concern
that the rule may lead to inequitable results in particular
circumstances. We consider each concern in turn.
The court in Boston Gas, considering the issue from
the standpoint of the insurer, concluded that it would
be unfair to allocate to an insurer losses that occurred
after the insurer determined that it was no longer cost
effective to insure against that particular risk. Other
courts, by contrast, have looked at the issue from the
perspective of the policyholder, concluding that it
would not be fair to hold the policyholder responsible
for periods during which insurance could not be pur-
chased. See, e.g., Security Ins. Co. of Hartford v. Lum-
bermens Mutual Casualty Co., supra, 1999 WL 545745,
*8; Owens-Illinois, Inc. v. United Ins. Co., supra, 138
N.J. 479. As we have explained, however, pro rata, con-
tinuous trigger allocation is an artificial judicial con-
struct designed to allocate costs between the various
insurance policies that are on the risk during the time
over which a single, indivisible injury develops. To our
minds, the question of how to allocate uninsurable por-
tions of the allocation block is not so much one of
fairness but, rather, of which party should bear the risk
that the insurance pool will be terminated if substantial
new long-tail risks are identified after significant liabili-
ties already have accrued.
From an equitable standpoint, either party can justifi-
ably be assigned responsibility for ongoing asbestos
related injuries after 1985.31 The policyholder is the one
who allegedly caused the injury and, therefore, who
ultimately will be financially responsible should insur-
ance prove insufficient. At the same time, each insurer
agreed to write an occurrence based policy that affords
‘‘almost unlimited prospective coverage’’ for future
costs arising from injuries that take place during the
policy period. (Internal quotation marks omitted.) Secu-
rity Ins. Co. of Hartford v. Lumbermens Mutual Casu-
alty Co., supra, 264 Conn. 692 n.5. Insurers can and do
cabin that liability by including relevant exclusions in
the policy language and by capping in various ways the
limits that they will pay under the policy. See Champion
Dyeing & Finishing Co. v. Centennial Ins. Co., supra,
355 N.J. Super. 277. Accordingly, we do not think that
it would be fundamentally unfair to hold either the
insurers or the policyholder responsible for portions of
the allocation block during which insurance is
unavailable.
Perhaps a more fruitful way of approaching the issue
is to recognize that it arises only because of a unique
confluence of circumstances. We assume—merely for
the sake of argument—that, at the time they enter into
a contract for a comprehensive general liability policy,
both the policyholder and the insurer reasonably
believe that the policyholder can safely engage in its
chosen line of business, without undue risk of liability.
If an unforeseen catastrophe such as a major oil spill
occurs in a particular year, it is understood what the
respective responsibilities and liabilities of each party
will be for the resulting injuries. Similarly, if a well
understood long-tail accident such as a gradual chemi-
cal leak comes to light, and if the policyholder has
been diligent about maintaining continuous insurance
coverage, then some policy will be on the risk for each
portion of the allocation block. And even if a new risk
associated with the business comes to light—say one
of the chemical compounds utilized by the policyholder
is discovered to be unstable and highly explosive—each
party is free to structure its affairs going forward so as
to manage that risk; insurers can opt not to renew their
policies upon termination and, if the policyholder is
unable to obtain other insurance, it is free either to
proceed on a self-insured basis or to cease using the
chemical in question. None of these conventional cover-
age scenarios poses an unavailability of insurance
problem.
Products such as asbestos and silica, however, pre-
sent a different problem. For decades, insurers provided
and policyholders obtained comprehensive general lia-
bility insurance under the mutual belief that those prod-
ucts could be produced and sold with relative safety.32
By the time they discovered otherwise, and insurers
concluded that they could no longer cost-effectively
insure such risks, it was too late. Because the injuries
involved were (1) long latency diseases that took
decades to manifest, (2) not fully understood at the
time of contracting, and (3) already so numerous and
substantial by 1985 as to render them uninsurable, the
parties faced a unique circumstance that was not antici-
pated or addressed in the policy language. See J. Stem-
pel, supra, 12 Conn. Ins. L.J. 352–54.
The question we must resolve, then, is who should
bear the risk that a new type of long-tail injury will be
discovered and that the insurance market will dry up
midcourse, leaving a substantial backlog of dormant
liability of which the policyholder and its prior insurers
were both unaware at the time of contracting and for
which a continuous chain of coverage will not be avail-
able. Courts and commentators have articulated four
reasons why it is more efficient and reasonable for such
risks to be borne by the insurers rather than the policy-
holder.
First, holding the insurers on the risk collectively
responsible for the full injury, up to the policy limits
for which the insured has contracted, has the desirable
effect of maximizing the resources available to respond
to the multitude of claims facing Vanderbilt and others
similarly situated. See Owens-Illinois, Inc. v. United
Ins. Co., supra, 138 N.J. 472–73. Applying an unavailabil-
ity rule also may encourage insurers who already are
on the risk for long-tail injuries to continue to accept
premiums—which presumably will go up as the risk
becomes more apparent—and to make insurance avail-
able for a longer period of time, thereby spreading the
risk among additional policies and generating additional
resources to compensate victims of injury. See id. By
contrast, a contrary rule that transfers liabilities to the
policyholder as soon as insurance becomes unavailable
would incentivize the insurance industry to stop offer-
ing coverage prematurely when novel risks emerge. The
ensuing race to the exit would further reduce the
resources available to respond to emerging risks. Cf.
note, supra, 99 Harv. L. Rev. 1580.
Second, holding insurers responsible when unfore-
seen risks arise, and not permitting them simply to drop
coverage and cut their losses, creates an incentive for
insurers as well as policyholders continuously to iden-
tify and investigate previously unknown risks associ-
ated with various materials and lines of business.
Proponents of the unavailability rule have pointed to
the public safety benefits that would result. See, e.g.,
M. Doherty, supra, 64 U. Chi. L. Rev. 266 and n.52, 285;
J. Stempel, supra, 12 Conn. Ins. L.J. 468.
Third, an unavailability of insurance rule best com-
ports with the reasonable expectations of the insured.
Insurance involves the transfer of risk. Doucette v.
Pomes, 247 Conn. 442, 459, 724 A.2d 481 (1999). Absent
contractual language to the contrary, a policyholder
will reasonably expect that a comprehensive general
liability policy will provide full coverage, up to the pol-
icy limits, not only for known risks but also for newly
recognized long latency injuries. See Champion Dye-
ing & Finishing Co. v. Centennial Ins. Co., supra, 355
N.J. Super. 277; J. Stempel, supra, 12 Conn. Ins. L.J.
471–72. If a policyholder has been diligent in its efforts
to maintain a continuous stream of coverage, then it
may reasonably expect that it will be able to avail itself
fully of such coverage in the event that unforeseen and
ongoing injuries arise. Relatedly, to the extent that the
relevant standard form policies are silent on the ques-
tion, this ambiguity must be construed against the insur-
ers that drafted the policy and in favor of the
policyholder. See Wentland v. American Equity Ins.
Co., 267 Conn. 592, 601, 840 A.2d 1158 (2004). This
reflects the fact that insurers, who are in the business
of managing risk, are better situated to anticipate such
developments and, if they choose, draft policies that
expressly address them. See J. Stempel, supra, 374–75,
382–83, 465.
Fourth, our sister courts have noted that insurers
have a better ability to manage this sort of risk. They can
continue to accept, pool, and spread the risk, pricing
coverage accordingly. See Owens-Illinois, Inc. v.
United Ins. Co., supra, 138 N.J. 472–73. Or they can
eschew the risk at whatever point it becomes unattrac-
tive to insure, at which time the policyholder is left
with no choice but to effectively self-insure going for-
ward. See J. Stempel, supra, 12 Conn. Ins. L.J. 465–68;
see also Stonewall Ins. Co. v. Asbestos Claims Manage-
ment Corp., supra, 73 F.3d 1204 (noting that insured
cannot bargain around asbestos exclusions). The
unavailability rule recognizes that the policyholder,
unlike the insurer, has little if any ability to manage
its exposure to dormant liabilities with respect to an
emerging long-tail risk. For all of these reasons, we
disagree with Boston Gas that, as a general proposition,
it is unreasonable for insurers to bear the risk that the
insurance industry will at some point cease to offer
coverage for a particular long-tail risk, leaving a cover-
age gap for injuries already in progress.
The court in Boston Gas also was concerned with
what it identified as a more specific source of
unfairness, namely, the situation in which only a few
years of coverage are available to cover a substantial
loss. See Boston Gas Co. v. Century Indemnity Co.,
supra, 454 Mass. 371. This might happen, for instance,
if a hypothetical manufacturer entered the asbestos
business in 1985 and purchased a comprehensive gen-
eral liability policy from Insurer A for that year, after
which time insurance became unavailable. Under those
circumstances, Insurer A would have retained only one
year worth of premiums, but it would be solely responsi-
ble for defending and indemnifying decades of ensuing
injuries sustained by all of the claimants who were
exposed to the manufacturer’s asbestos during that
year.
To reiterate what we already have said, the vast
majority of our sister courts have concluded that, as a
general matter, it is not unfair or unreasonable to allot
to an insurer portions of an allocation block for which
it did not write policies or receive premiums. If Insurer
A insured a petroleum company for a single year during
which that company was responsible for a catastrophic
oil spill, Insurer A could be liable for years of ensuing
cleanup costs, property damage, and other losses,
despite having received only a single premium. See
Champion Dyeing & Finishing Co. v. Centennial Ins.
Co., supra, 355 N.J. Super. 276. It is not apparent, then,
why the insurer should not also have to cover the full
extent of injuries arising from asbestos exposures that
occurred on its watch. Indeed, as we have discussed,
many jurisdictions continue to adhere to the more poli-
cyholder-friendly all sums approach to long-tail alloca-
tion, according to which (1) the insured bears no
responsibility for uninsured coverage blocks, and (2)
any insurer on the risk can be called upon to bear the
full costs of indemnifying and defending a long-tail tort
claim, up to its policy limits. From this standpoint, it
is difficult to see how the insurance industry, having
received the benefits in Connecticut of a pro rata sys-
tem, in which costs are uniformly allocated among poli-
cies and policyholders are responsible for uninsured
periods, is treated unfairly in circumstances in which
only one insurer happens to be on the risk. At worst,
the liabilities of any particular insurer will be no greater
than they would be in an all sums jurisdiction.
We recognize that one consequence of the unavail-
ability rule is that, in particular cases, individual insur-
ers may end up bearing what appears to be a
disproportionate share of the financial burden. But vir-
tually every method of allocating long-tail tort liabilities
will at times result in apparent inequities of one sort
or another. Jurisdictions that apply an initial exposure
trigger place a greater burden on insurers who provided
coverage in the early years, whereas manifestation juris-
dictions call on later insurers to carry more of the load.
Courts that allocate costs by policy limits as well as by
time on the risk33 disadvantage issuers of larger policies,
whereas any insurer on the risk may be singled out
under the all sums approach. See J. Michaels et al.,
supra, 64 U. Kan. L. Rev. 477 (opining that all sums
approach is inequitable). Ultimately, we believe that
the allocation system that we have adopted and that
our Supreme Court has at least implicitly endorsed—
pro rata time-on-the-risk, employing a continuous trig-
ger and an unavailability rule—distributes the burdens
equitably among all parties involved and maximizes the
resources available to respond to claims while minimiz-
ing administrative hassles and transaction costs.
The second case on which Mt. McKinley relies is
Sybron Transition Corp. v. Security Ins. of Hartford,
supra, 258 F.3d 595, in which the United States Court
of Appeals for the Seventh Circuit articulated a very
different critique of the unavailability rule. In Sybron,
Judge Frank Easterbrook, writing for the court, rejected
the basic premise—accepted by most other courts to
have considered the question—that it is possible for
insurance against a particular risk ever to be ‘‘unavail-
able.’’ Id., 599. Instead, he proceeded on the assumption
that insurers will ‘‘cheerfully’’ underwrite any risk at
the right price. Id. This is true, Judge Easterbrook main-
tained, even when, as was arguably the case with asbes-
tos in the mid-1980s, the ‘‘risk [already] has come to
pass and the obligation to pay is certain,’’ so that it is
no longer possible for the insurer to spread the risk
among different policyholders. Id. Under those circum-
stances, he explained, a would-be policyholder still can
participate in insurance claim administration pools,
although likely for a premium in excess of the maximum
outlay. Id. The fact that an insured might have to pay
more than $2 million to obtain a $2 million ‘‘retroactive’’
asbestos policy, for example, reflects the fact that the
underwriter, who actually would provide more of ‘‘a
claims-administration service rather than risk-spread-
ing . . . must be reimbursed for both the expected pay-
ments to victims and the expected costs of evaluating
and resolving claims . . . .’’ Id. Judge Easterbrook
insisted that ‘‘[t]his kind of insurance could have been
purchased for asbestos risks in the mid-1980s,’’ and that
a policyholder who opted not to join such a claims
administration pool should, therefore, be treated as self-
insured. Id.
There are two principal reasons—one factual and
one legal—why we find the reasoning of Sybron to be
unpersuasive in the context of this case. First, as a
purely factual matter, there is nothing in the present
record to support the assertion that, beginning in 1986,
Vanderbilt could have joined the sort of insurance claim
administration pool posited in Sybron. Quite the con-
trary; the trial court expressly found that insurance was
not available to Vanderbilt or any similarly situated
manufacturer. That finding was supported by substan-
tial evidence, and Mt. McKinley does not challenge it
on appeal.
Second, from a legal standpoint, even if such a pool
had been available to Vanderbilt, it would not have
constituted the type of insurance that is relevant for
purposes of the unavailability rule. As we previously
have explained; see parts III A and III A 3 of this opinion;
and as the court in Sybron acknowledged; Sybron Tran-
sition Corp. v. Security Ins. of Hartford, supra, 258
F.3d 601; we apply a continuous trigger, time-on-the-
risk pro rata allocation system to long-tail asbestos
claims in large part for epistemological reasons.
Because asbestos related disease frequently follows
repeated exposure to asbestos fibers, it often is impossi-
ble to know whether fibers inhaled at any particular
time caused a particular disease, or what percentage
of a claimant’s injuries transpired in any given policy
period. See id. When there is a continuous stream of
coverage, then, the fairest and simplest approach is to
divide the costs of defense and indemnity evenly among
all of the policy periods during which injury may
have occurred.
This allocation scheme may theoretically present a
moral hazard problem, however, as it might have been
subject to abuse by a policyholder who attempted to
avoid the cost of continuous coverage. Rather than pur-
chase an excess policy every year, for example, an
asbestos producer might have opted to acquire excess
coverage only once every ten years, on the assumption
that any asbestos related disease will take at least ten
years to manifest and, therefore, at least one excess
insurance policy will be available to respond to any
long-tail claim. The producer could have obtained what
would amount to full coverage at one-tenth of the cost.
Aside from the fact that this outcome arguably would
be unfair to the once-a-decade insurer, such a strategy
would defeat the benefits of a continuous trigger
approach; the risk-spreading function of insurance
would be diminished and the resources available to
respond to potential claims would be significantly
reduced. See Security Ins. Co. of Hartford v. Lum-
bermens Mutual Casualty Co., supra, 264 Conn. 711.
For these reasons, a court might have rightly treated the
policyholder as self-insured under those circumstances.
The situation is fundamentally different, however,
when it becomes clear that virtually every company in
a particular line of business faces a substantial backlog
of dormant liability arising from its past activities, such
that providing insurance to those companies will no
longer perform a risk-spreading function and they are
deemed to be uninsurable with respect to the risk at
issue. Although Judge Easterbrook argues that they still
can obtain insurance of a sort, he acknowledges; see
Sybron Transition Corp. v. Security Ins. of Hartford,
supra, 258 F.3d 599; that the claims administration pools
that he describes are a fundamentally different creature,
insofar as they do not advance what our Supreme Court
has identified as the fundamental purpose of insurance,
namely, to protect against the risk of loss. See Rathbun
v. Health Net of the Northeast, Inc., 315 Conn. 674, 697,
110 A.3d 304 (2015); see also Doucette v. Pomes, supra,
247 Conn. 459 (‘‘transfer of risk . . . is generally con-
sidered to be an essential element of an insurance rela-
tionship’’); Brown v. State Farm Fire & Casualty Co.,
150 Conn. App. 405, 414, 90 A.3d 1054 (‘‘[a] loss that
has already occurred is not fortuitous—and is thus not
insurable’’), cert. denied, 315 Conn. 901, 104 A.3d 106
(2014). Even if such pools had been available to Vander-
bilt after 1985, then, they do not represent the sort of
insurance that is germane to the unavailability rule.
See Goodyear Canada, Inc. v. American International
Cos., Docket No. CV-09-00377269, 2011 ONSC 5422, ¶¶
57–65 (Can. Ont. Sup. Ct. J. September 16, 2011).
We therefore conclude that the cases that have
adopted an unavailability rule are better reasoned, rep-
resent the majority position, and more closely comport
with our Supreme Court’s analysis in Security. Accord-
ingly, it was not improper for the trial court to exclude
Vanderbilt from the allocation block for years in which
asbestos related insurance was unavailable.
2
Equitable Exception and Testimony
of Professor Priest
In the alternative, Mt. McKinley contends that, if Con-
necticut does apply an unavailability of insurance rule,
we should recognize an ‘‘equitable exception’’ to that
rule. Under the proposed equitable exception, costs
would be prorated to the insured if the insured contin-
ues to place allegedly harmful products into the stream
of commerce during a time when no coverage is avail-
able for losses attributed to those products. Under those
circumstances, Mt. McKinley argues, the insured
assumes any risk resulting from the ongoing produc-
tion, sale, or installation of a product that is recognized
to be so harmful as to be uninsurable. Although the
question may be a close one, we conclude that the trial
court properly declined Mt. McKinley’s invitation to
apply an equitable exception under the circumstances
of the present case. We also conclude that the trial
court did not abuse its discretion in precluding expert
testimony on the issue.
The following additional procedural history is rele-
vant to our analysis of these issues. During the Phase
II trial, Mt. McKinley argued that, if the trial court
applied an unavailability of insurance rule, the court
also should apply an equitable exception and treat Vand-
erbilt as self-insured for the period from March 3, 1986,
through 2008, during which Vanderbilt continued to sell
talc while uninsured or underinsured. In light of the
‘‘considerable credible evidence’’ that Vanderbilt made
a business decision to continue selling talc beyond 1986
even though it was aware of the potential legal expo-
sure, the trial court opined that ‘‘Mt. McKinley’s equita-
ble argument possesses appeal.’’ Nevertheless, the
court declined to apply an equitable exception for three
reasons. First, after reviewing the relevant case law,
the court concluded that there was no authority for
considering Vanderbilt’s post-1985 conduct when
determining whether costs should be prorated to it for
that period. Second, the court reasoned that Vander-
bilt’s pre-1986 insurers were contractually bound to
provide coverage for injuries arising from exposures
prior to 1986, and that nothing in the policy language or
the insurers’ course of dealing with Vanderbilt indicated
that that coverage would be nullified if Vanderbilt con-
tinued to sell talc after 1986. Third, the court found
that, even if it were free as a matter of law to apply an
equitable exception, the equities of the case did not
support it. Specifically, the court found that (1) Vander-
bilt consistently took the position both before and after
1985 that its talc did not contain asbestos; (2) there
was no evidence in the record demonstrating that talc
does contain asbestos; (3) the federal government in
1992 reinforced Vanderbilt’s position in this regard by
excluding talc from regulation under the Occupational
Safety and Health Administration’s new asbestos regu-
lations; and (4) Vanderbilt made every effort to obtain
insurance after 1986 by representing to insurers that
its products did not contain asbestos. In light of these
findings, the court concluded that Vanderbilt had a good
faith basis on which to continue selling its talc from
1986 until 2008 and, therefore, there was no equitable
justification for treating the company as self-insured
and allocating it a pro rata share of the post-1985 costs
arising from claims alleging a first exposure before
1986.
a
Whether Connecticut Recognizes
an Equitable Exception
Whether to recognize an equitable exception to the
unavailability rule is a question of first impression in
Connecticut and one that, to our knowledge, only a
few of our sister courts have confronted. Vanderbilt
emphasizes that there is no authority, in Connecticut
or elsewhere, supporting the adoption of an equitable
exception. Mt. McKinley counters that this dearth of
authority simply reflects the fact that other purveyors
of asbestos and related carcinogens largely ceased pro-
duction and distribution of those products by the mid-
1980s and, therefore, our sister courts have not been
confronted with the question of whether companies
that intentionally continue to sell harmful products after
the risks become apparent and insurance becomes
unavailable should be able to benefit from the unavail-
ability rule. Mt. McKinley further notes that, in one of
the few cases in which a court has considered whether
to adopt the equitable exception, Pneumo Abex Corp.
v. Maryland Casualty Co., Civil Action No. 82-2098
(JGP), 2001 WL 37111434 (D.D.C. October 9, 2001), the
insured continued to sell asbestos related products for
only two years after insurance became unavailable. Id.,
*4. Notably, the court in that case, while declining to
apply an equitable exception, expressly reserved the
question of whether an equitable exception might be
appropriate if a company continued to manufacture
asbestos products for five or ten years after coverage
ceased to be available. Id., *10. Mt. McKinley empha-
sizes that Vanderbilt continued to sell its talc for more
than two decades after insurance for asbestos related
injuries became unavailable.
In the most recent case to address the issue, however,
the Appellate Division of the New Jersey Superior Court
declined to apply an equitable exception even though
the policyholder had continued to manufacture materi-
als containing asbestos for fourteen years after insur-
ance coverage became unavailable.34 See Continental
Ins. Co. v. Honeywell International, Inc., Docket Nos.
A-1071-13T1, A-1100-13T1, 2016 WL 3909530, *11–12
(N.J. Super. App. Div. July 20, 2016) (Honeywell), cert.
granted, Docket No. 078152, 2016 WL 7665452 (N.J.
December 12, 2016). The court in Honeywell rejected as
illogical the argument that the policyholder’s continued
sale of asbestos related products after 1987 might have
increased its exposure to claims that triggered its pre-
1987 policies and thereby imposed a greater financial
burden on its insurers. Id., *12. Like the policyholder
in Honeywell, Vanderbilt has accepted that it bears full
responsibility for all costs arising from claims alleging
a date of first exposure after insurance became unavail-
able, but it contends that there is no reason why its
post-1985 talc sales should increase its liability for
claims arising from pre-1986 exposure to its products.
We agree with Vanderbilt that, in most instances, the
fact that a policyholder continues to sell a potentially
dangerous product after the dangers become known
and after insurance ceases to be available has no bear-
ing on the question whether that policyholder should
be treated as self-insured with respect to injuries that
arose from previous exposures, when insurance was in
place. However, we are not as confident as the court
in Honeywell that there is no possibility that continued
sale of asbestos related products on an uninsured basis
after 1985 had the potential to adversely impact Vander-
bilt’s pre-1986 insurers.35 Two possible scenarios come
to mind.
The first scenario would be if a new underlying com-
plaint were filed in, say, 2017 that failed to allege a
date of first exposure to Vanderbilt’s talc. Given that
asbestos related diseases typically manifest between
twenty to forty years after first exposure, initial expo-
sure in that scenario plausibly could have occurred
either before or after March 3, 1986, thirty-one years
prior to the date of this opinion. Although Vanderbilt
contends that the vast majority of the underlying com-
plaints to date have alleged a first exposure prior to
1986, it is reasonable to assume that that share will
decline over time as individuals who were first exposed
to asbestos related materials in the late 1980s and 1990s
begin to exhibit symptoms of asbestosis and asbestos
related cancers. In cases wherein the date of first expo-
sure is not alleged and cannot readily be determined,
it would be unfair always to assume that first exposure
occurred before 1986; see part III C 2 of this opinion;
and to hold the defendant insurers liable for all of the
defense and indemnity costs, when it is quite possible
that the claimants were not exposed until after 1985 and
then only because Vanderbilt continued to sell asbestos
related products after insurance became unavailable.
Accordingly, on remand, the trial court, in devising a
method for calculating a default date of first exposure
for new and pending claims; see id.; is instructed to do
so with a mind toward the concerns discussed herein.36
The second scenario of concern would arise if a hypo-
thetical complainant were initially exposed to asbestos
related products in, say, late 1985, but continued to
undergo significant and protracted asbestos exposure,
solely via Vanderbilt’s talc, after 1985. To the extent
that the risk of developing asbestos related disease and
the severity of that disease are proportional to the dura-
tion and extent of asbestos exposure, it is conceivable
that, by continuing to sell talc after 1985, Vanderbilt
increased the likelihood that the hypothetical complain-
ant would develop such a disease. If so, then Mt. McKin-
ley is correct that applying the unavailability rule
without an equitable exception would afford Vanderbilt
a windfall at its insurers’ expense. The insurers might
have to defend and indemnify claims for injuries that
would not have occurred, or that would have been less
severe, but for Vanderbilt’s decision to continue to sell
talc on an uninsured basis.
We do not foreclose the possibility that such an argu-
ment might justify the application of an equitable excep-
tion under appropriate circumstances. We agree with
the conclusion of the trial court, however, that the
record does not support its application in the present
case. The court found that Vanderbilt had a long-stand-
ing and good faith belief that its talc did not contain
asbestos and that the underlying actions were ground-
less. That belief appeared to be validated by federal
regulators, who exempted talc from asbestos regula-
tions; see ‘‘Occupational Exposure to Asbestos, Tremo-
lite, Anthophyllite and Actinolite,’’ 57 Fed. Reg. 24,310,
Department of Labor, Occupational Safety and Health
Administration (June 8, 1992); and by certain insurers,
who agreed to insure Vanderbilt after 1993 on the basis
of its representations that its talc did not contain asbes-
tos. On the record before us, we have no basis to con-
clude that those representations were false or that
Vanderbilt’s continued sale of talc after 1985 did or will
in fact increase the financial burdens on any of its
pre-1986 insurers. Accordingly, we do not believe that
applying the unavailability rule in the present case
would afford Vanderbilt an underserved windfall. For
the same reasons, one of the arguments in favor of the
equitable exception—that the law should not reward
policyholders for continuing to engage in risky conduct
on an uninsured basis after the risks have become
apparent—holds less sway in a case such as this in
which the court found that Vanderbilt operated under
a good faith belief that its talc was not unreasonably
dangerous.37 We therefore conclude that the trial court
properly determined that equity does not require the
carving out of an exception to the unavailability rule and
the treatment of Vanderbilt as self-insured for allocation
purposes from 1986 through 2008.
b
Priest Testimony
We next consider Mt. McKinley’s claim that the trial
court improperly excluded the expert testimony of
George Priest, a professor of law and economics at Yale
Law School. We conclude that the trial court did not
abuse its discretion in excluding Priest’s testimony.
The following additional procedural facts are relevant
to our resolution of this issue. During the Phase I and
Phase II trials, Mt. McKinley offered Priest’s testimony
to educate the court about insurance allocation and
availability issues and, in particular, about the economic
and insurance bases of pre-1986 comprehensive general
liability policies and the methods of allocating defense
and indemnity costs after 1985. According to Mt. McKin-
ley’s expert disclosure and proffers, Priest would have
testified that there is no contractual basis for allocating
to Vanderbilt’s pre-1986 insurers any liability for post-
1985 injuries. He further would have opined that
applying an unavailability rule to the period after 1985
would overturn the regulatory and gatekeeping function
that insurers perform with respect to risky behavior
and, therefore, would encourage policyholders to
engage in economically irresponsible conduct. In a nut-
shell, Priest’s opinion would have been that, absent an
equitable exception, applying the unavailability rule in
the present case will send other producers of harmful
products the unfortunate message that they can con-
tinue to sell such products with impunity, even after
the dangers become known and even after insurers
deem them too risky to insure.
Vanderbilt filed a motion in limine to preclude Priest’s
testimony, contending that the proffered testimony
merely offered a legal analysis of the meaning of the
relevant insurance policies and, therefore, was not a
proper subject of expert testimony and would not be
helpful to the trial court in resolving the issues before
it. The trial court agreed and granted that motion.
As previously noted; see part III A 2 a of this opinion;
we review for abuse of discretion the trial court’s deter-
mination whether an expert’s proffered testimony
would impart knowledge that is not common to the
average person and would be helpful to the trier of
fact in considering the issues. See Weaver v. McKnight,
supra, 313 Conn. 405–406. To the extent that Priest
intended to testify as to the meaning or proper interpre-
tation of the standard form comprehensive general lia-
bility contract, his testimony was properly excluded. It
is well established that interpretation of an insurance
policy is a question of law within the exclusive province
of the court. Auto Glass Express, Inc. v. Hanover Ins.
Co., 293 Conn. 218, 231, 975 A.2d 1266 (2009). Expert
testimony is relevant to that endeavor only when it is
necessary to shed light on contractual terms of art. See
Pratt v. Dunlap, 85 Conn. 180, 186–87, 82 A. 195 (1912).
There is no indication in the present case that terms
of art were at issue with respect to the unavailability
rule. Priest’s testimony as to the meaning of Vanderbilt’s
insurance policies was thus inadmissible. See Lone Star
Steakhouse & Saloon, Inc. v. Liberty Mutual Ins.
Group, 343 F. Supp. 2d 989, 1013 (D. Kan. 2004) (exclud-
ing Priest’s testimony with respect to public policy goals
that underlie comprehensive general liability policy
because case did not present need to clarify or define
any terms of art).
On the other hand, to the extent that Priest intended
to testify as to the sorts of equitable and public policy
considerations that a court might consider in fashioning
rules for allocating long-tail toxic tort liabilities, we
believe that the trial court reasonably exercised its dis-
cretion in excluding the testimony. The opinions that
Priest would have offered—for example, that permit-
ting a company to sell dangerous products with impu-
nity will incentivize other companies to do the same—
are matters of common sense that do not require the
counsel of a law professor. Indeed, the fact that Mt.
McKinley articulates throughout its briefs the very argu-
ments that it indicates Priest would have offered sup-
ports the conclusion that the proffered testimony would
have amounted merely to legal argument, for which
expert testimony is unnecessary. See Bank of America
Corp. v. SR International Business Ins. Co., Docket
No. 05 CVS 5564, 2007 WL 4480057, *11 (N.C. Super.
December 19, 2007) (excluding Priest’s testimony
because determination of public policy is matter for
courts and legislature). For these reasons, we conclude
that the trial court did not abuse its discretion in exclud-
ing Priest’s testimony.
3
Whether Trial Court Properly Applied
Unavailability Rule
In the preceding parts of this opinion, we concluded
that the trial court properly determined that (1) Con-
necticut applies an unavailability of insurance rule
when allocating liabilities for defense and indemnity
costs to the policyholder in the context of long-tail toxic
tort claims that implicate multiple policy periods, and
(2) it would not be appropriate to apply an equitable
exception to that rule according to which Vanderbilt
would be liable for a pro rata share of the costs for the
period during which it continued to produce talc after
coverage for asbestos related liabilities had become
unavailable. We turn now to the question of whether
the trial court properly applied the unavailability rule
to the facts of the present case. Vanderbilt contends
that the court improperly determined that (1) defense
cost coverage was available to Vanderbilt from March
3, 1993 through April 24, 2007, (2) Vanderbilt failed to
obtain sufficient available insurance during that time,
and (3) Vanderbilt was thus responsible for a pro rata
share of defense costs for that fourteen year period.
We agree with Vanderbilt that it should not have been
allocated any post-1985 defense costs for claims with
a date of first exposure prior to March 3, 1986.
The following additional facts are relevant to our
resolution of this claim. During the Phase I trial, the
court held an evidentiary hearing to determine, among
other things, whether defense cost coverage for asbes-
tos related claims was available to Vanderbilt between
1948 and 2008 and, if so, whether Vanderbilt fully
availed itself of such coverage. On the basis of that
hearing, the court found as follows.
‘‘Beginning in the 1970s and up through 1986, there
was a dramatic increase nationwide in the number of
claims for injuries related to exposure to asbestos. Up
through 1985, insurance companies had regularly
offered and provided occurrence based defense cost
and indemnity coverage for such claims. However, by
1986, such policies became generally unavailable to
companies in the mining and chemical industries, as
the insurance industry had found the number of, and
potential exposure for, [long-tail] loss claims to be
financially unattractive to insure. The insurance indus-
try responded to the increase in such claims by offering
policies that contained exclusions for asbestos related
claims. Moreover, it moved to offer to companies that
carried a risk of exposure to asbestos, such as those
in the mining and chemical industries, only claims-made
policies rather than occurrence based policies. Occur-
rence based coverage remained available to other com-
panies . . . that did not actively engage in the
production or distribution of asbestos-containing mate-
rials, but not to those that were directly or indirectly
involved. Both [parties’] experts credibly testified that
by 1986, insurance coverage was generally available to
companies within those industries but only on a claims-
made basis and with an asbestos exclusion. . . .
‘‘Since it started mining talc [in 1948, Vanderbilt] has
purchased or attempted to purchase insurance to cover
the defense and indemnity of asbestos related claims.
[Vanderbilt] claims [to have] purchased occurrence
based policies for asbestos related claims for the period
1948–195538 . . . [and it obtained multiple primary]
umbrella [and] excess policies from various defendants
. . . from 1956 through 1985. . . .
‘‘Beginning in 1986, because it could not find a carrier
to offer it any occurrence based policies without an
asbestos exclusion, [Vanderbilt] began purchasing
claims-made policies (also with exclusions for asbestos
related claims). This was true until 1993, when, despite
the change in the industry, [Vanderbilt] was able to
obtain a limited number of claims-made insurance poli-
cies in the period March, 1993 through April, 2003, that
provided defense cost coverage for asbestos related
claims. This coverage included policies purchased
through Gerling America Insurance Co. (Gerling) cov-
ering the period March 3, 1993 to July 31, 1996, and
Commerce and Industry Insurance Co. (Commerce)
covering the period July 31, 1996 to April 3, 2003. . . .
In 2003, [Vanderbilt] was able to purchase a policy
through [American International] for the period April
24, 2003 to April 24, 2004, [that] provided coverage for
asbestos and for which it was also able to later obtain
an extended reporting endorsement effective to April
24, 2007. . . . However, the endorsement was offered
due to the insurer electing to exclude asbestos coverage
at the end of the initial term of the policy.’’39 (Citations
omitted; footnotes added.)
In addition to the testimony of the parties’ experts,
the trial court credited the testimony of several fact
witnesses as to the availability of insurance after 1985.
The court credited the testimony of Mac Nadel, Vander-
bilt’s insurance broker, that one other insurer, ECS
Reliance, offered a primary defense cost coverage pol-
icy to Vanderbilt for the year 1999–2000, the terms of
which would have been consistent with the terms of
the Commerce policy that Vanderbilt purchased that
year. Notably, however, the court also credited testi-
mony that Vanderbilt (1) ‘‘made strong attempts to
obtain as much asbestos related coverage as possible
between 1986 and 2007,’’ and (2) never turned down
any coverage that would have provided it with broader
coverage than what it had been able to obtain pre-
viously. In addition, the court credited Nadel’s testi-
mony that only primary defense cost coverage for
asbestos related third party liability was available to
Vanderbilt after 1986 and that Vanderbilt was unable to
obtain umbrella or excess policies for asbestos liability
during that time.
On appeal, Vanderbilt does not challenge the trial
court’s factual findings. Instead, it argues that the court
erred as a matter of law when it concluded, on the
basis of those findings, that Vanderbilt could not take
advantage of the unavailability rule and was responsible
for a pro rata share of defense costs for the period from
March 24, 1993 through April 24, 2007. Accordingly, we
now turn our attention to the trial court’s legal analysis.
The court’s analysis proceeded in three stages, the sec-
ond and third of which Vanderbilt challenges on appeal.
In the first stage of its analysis, the trial court consid-
ered whether the unavailability rule applies whenever
the relevant insurance is generally unavailable to com-
panies in a particular industry or, rather, whether there
must be evidence demonstrating that insurance was
unavailable to the particular policyholder. Finding no
express authority for the former standard either in Con-
necticut or among other jurisdictions that follow the
unavailability rule, the trial court adopted the latter
standard. Because Vanderbilt does not challenge this
conclusion on appeal,40 we assume without deciding
that unavailability of insurance should be assessed rela-
tive to a particular policyholder, rather than as to the
insurance market in general.
In the second stage of its analysis, the trial court
considered whether, in light of its factual findings,
defense cost coverage was available to Vanderbilt.
Although it found that coverage for asbestos related
defense costs was generally unavailable during the
entire post-1985 period, the court nevertheless con-
cluded that coverage was available to Vanderbilt
between 1993 and 2007. The court’s rationale for this
conclusion was simply the fact that Vanderbilt had in
fact been able to obtain limited primary claims-made
coverage during that time.
In the third stage of its analysis, the trial court con-
cluded that Vanderbilt failed to take advantage of all
available defense cost coverage. The court’s reasoning
in this respect is not entirely clear. The court expressly
found (1) that Vanderbilt made strong attempts to
obtain as much asbestos related coverage as possible
between 1986 and 2008, and (2) that Vanderbilt never
turned down any coverage that would have provided
it with broader coverage than what it obtained. Never-
theless, the court ultimately concluded that Vanderbilt
‘‘shall be considered self-insured for the period March,
1993 through April, 2007, in that it was knowingly under-
insured for that period of time.’’ Although the court did
not articulate its rationale for concluding that Vander-
bilt was knowingly underinsured, it may be inferred
from the memorandum of decision that the court relied
solely on the facts that (1) there was no evidence in the
record that Vanderbilt accepted ECS Reliance’s offer to
furnish it with a policy for the year 1999–2000, and
(2) from 1999 to 2003, Vanderbilt annually obtained
approximately $100 million in claims-made coverage
with asbestos exclusions but only obtained approxi-
mately 5 percent of that amount in policies that pro-
vided asbestos related defense cost coverage.
With respect to the second stage of the trial court’s
analysis, Vanderbilt contends that the court mixed
apples and oranges in concluding that the availability
of certain claims-made policies after 1993 was relevant
to the allocation of liabilities arising from pre-1985
occurrence based policies. We agree. As we explained
in part III A of this opinion, the challenges and complexi-
ties that surround the allocation of insurance liabilities
with regard to long-tail toxic tort claims arise primarily
from a distinct feature of occurrence based comprehen-
sive general liability policies: although covered claims
must result from an occurrence, such as exposure to
the policyholder’s asbestos related products, the event
that triggers coverage under a particular policy term is
not the occurrence itself but rather the resulting injury.
Because progressive, long latency diseases such as
asbestosis and mesothelioma continually reinjure the
body for decades after initial exposure, and because
those injuries are considered to be indivisible—their
progression and magnitude during any particular policy
period are impossible to quantify—we have adopted the
continuous trigger theory and the rule that insurance
liabilities are allocated pro rata on a time-on-the-risk
basis. It is this judicial solution to the problems created
by the intersection of long-tail disease claims with
occurrence based insurance policy language that gives
rise to the question of to what extent an insured should
be liable for a pro rata share of the costs for periods
during which no insurance is available.
By contrast, if all comprehensive general liability poli-
cies operated on a claims-made basis, there would be
no need for such allocation rules. For example, if a
hypothetical plaintiff brought a claim in 1997 alleging
asbestos related disease, then the relevant policies in
effect in 1997—and only those policies—would be on
the risk, regardless of when exposure occurred and
how the disease developed and manifested over time.
In light of this distinction, courts and commentators
have recognized that the fact that a policyholder may
or may not have purchased claims-made asbestos cover-
age in 1997 has no bearing on whether the policyholder
should be treated as self-insured with respect to long-
tail illnesses that originated before 1986, when occur-
rence based policies were in place, so long as the under-
lying action is not brought in 1997. In Champion, for
example, the court considered how to allocate liability
for progressive injuries—in that case environmental
damage—that commenced while coverage was avail-
able on an occurrence basis but continued into a period
in which coverage was offered, if at all, only on a claims-
made basis. Champion Dyeing & Finishing Co. v. Cen-
tennial Ins. Co., supra, 355 N.J. Super. 264. Because
claims-made policies would only have been available
to defend claims brought during their policy years, the
court concluded that the policyholder’s failure to obtain
such coverage was not relevant to the unavailability
determination and did not render the policyholder
responsible for a pro rata share of the costs for the
intervening years. See id., 276–77; see also J. Hogg, ‘‘The
Tale of a Tail,’’ 24 Wm. Mitchell L. Rev. 515, 555–57
(1998) (explaining how applying unavailability rule
across transition from occurrence to claims-made poli-
cies would be anomalous and would create ‘‘ ‘disap-
pearing coverage’ ’’ problem pursuant to which diseases
that take longer to manifest would be increasingly
underfunded).
We agree and conclude that the trial court improperly
considered the availability of claims-made coverage
when allocating to Vanderbilt liability for the 1993–2007
period. Absent any evidence that occurrence based cov-
erage was available during that period, defense costs
for claims originating before 1986 should not have been
prorated to the insured. But see part III D of this opinion,
addressing allocation rules for claims brought while a
claims-made policy is in effect.
With respect to the third stage of the court’s analysis,
Vanderbilt contends, and we agree, that, even if the
availability of claims-made policies were relevant to
the pro rata allocation methodology, the trial court’s
implicit findings that Vanderbilt (1) declined to pur-
chase a claims-made policy from ECS Reliance in 1999
and (2) obtained a relatively small amount of asbestos
related defense cost coverage from 1999 to 2003 do not
support the court’s conclusion that Vanderbilt know-
ingly chose to underinsure during those four years, let
alone during the entire period from 1993 through 2007.
Notably, the court found that excess and umbrella cov-
erage were unavailable for asbestos related claims after
1985, and also that Vanderbilt sought to obtain as much
primary asbestos related coverage as possible and never
turned down any policy that would have provided it
with broader coverage than what it already obtained.
In light of those findings, we fail to understand the
relevance of the fact that Vanderbilt was able to obtain
only approximately $5 million in primary asbestos
related coverage and that it did not purchase a policy
in 1999 that only would have replicated its existing
coverage. Absent any specific findings by the trial court
that Vanderbilt could have obtained broader coverage
between 1993 and 2007 but chose not to, it should not
have treated Vanderbilt as underinsured and assigned
it a pro rata share of defense costs for those years.
4
Nonasbestos Particulates
In this opinion, we have adopted an unavailability of
insurance rule with respect to the pro rata allocation
of comprehensive general liability obligations for long-
tail asbestos claims. As an ancillary matter, Mt. McKin-
ley contends that resort to that rule in the present case
should be foreclosed when an underlying action
includes allegations of injury from exposure to nonas-
bestos particulates such as talc and silica because, it
argues, occurrence based coverage for such injury was
available to, but not procured by, Vanderbilt from 1986
to 2004. In both its Phase I and Phase II decisions,
however, the trial court found that no occurrence based
coverage was available to Vanderbilt during that period.
To prevail under its interpretation of the unavailability
of insurance rule, Mt. McKinley must therefore establish
that the court’s factual finding was clearly erroneous.
See part II C of this opinion.
The following undisputed facts and procedural his-
tory govern our resolution of this claim. The record
before us contains a sampling of underlying actions.
The court admitted into evidence 134 complaints that
set forth various allegations against diverse defendants
in addition to Vanderbilt. While some contain allega-
tions of injury solely from exposure to asbestos; see,
e.g., Complaint of Robert Jeter, Jr.; many allege injuries
from both asbestos and nonasbestos particulates. The
complaint filed in California in 2010 by Maria Olivares,
Diane Cano-Casas, and Gerardo Olivares (Olivares com-
plaint) is illustrative. Paragraph 16 of that complaint
alleges in relevant part that a Vanderbilt product known
as Nytal ‘‘contained [t]alc, silica, and asbestos.’’ The
Olivares complaint further alleges that those materials
‘‘entered the decedent’s body through absorption and
inhalation, and were a substantial factor in causing [the]
decedent’s lung cancer . . . .’’
At least one underlying action involves a complaint
that lacks any express allegations of an asbestos injury.
Nowhere in the complaint filed in Texas in 2003 by Jack
W. Byrom (Byrom complaint) does the word ‘‘asbestos’’
appear. Rather, that complaint alleges in relevant part
that the plaintiff ‘‘while working as a kiln operator . . .
was exposed to harmful airborne concentrations of sil-
ica, silica-containing products, and other toxic and/or
carcinogenic chemicals, which caused his injuries and
disease. . . . [T]he products mined, manufactured or
distributed by the defendants when used in the intended
manner emit harmful airborne concentrations of silica
dust and other toxic and/or carcinogenic chemicals into
the air which were inhaled by [the] [p]laintiff causing
damage and harm to his body. . . . [A]t all relevant
times . . . the defendants were aware of the fact that
[the] [p]laintiff and others similarly situated were regu-
larly being exposed to the hazards of silicosis and other
lung diseases.’’ The underlying actions thus include alle-
gations that the complainants (1) were exposed to non-
asbestos particulates as well as asbestos, and (2)
developed not only asbestos related diseases such as
asbestosis and mesothelioma, but also diseases such
as silicosis that are unique to nonasbestos particulates.41
Mindful that an insurer’s duty to defend is triggered
if even one allegation of a complaint potentially falls
within the policy’s coverage; Capstone Building Corp.
v. American Motorists Ins. Co., 308 Conn. 760, 805, 67
A.3d 961 (2013); Mt. McKinley posits that the alleged
availability of occurrence based coverage for nonasbes-
tos particulate claims precludes the operation of the
unavailability of insurance rule when the underlying
action includes allegations of injury from exposure to
nonasbestos particulates. That is to say, if a comprehen-
sive general liability policy had been issued to Vander-
bilt at some point after 1986 that provided occurrence
based coverage for nonasbestos particulate injuries, the
insurer would be obligated to defend with respect to
injuries such as those alleged in the Olivares and Byrom
complaints, irrespective of whether the complaints also
alleged an injury due to asbestos exposure. See Schur-
gast v. Schumann, 156 Conn. 471, 490, 242 A.2d 695
(1968) (‘‘[when] a complaint in an action against one
to whom a policy of liability insurance has been issued
states different causes of action or theories of recovery
against the insured, and one such cause is within the
coverage of the policy but others may not be within
such coverage, the insurer is bound to defend with
respect to those which, if proved, are within the cover-
age’’ [internal quotation marks omitted]); 14 L. Russ &
T. Segalla, Couch on Insurance (3d Ed. 2007) § 200:11,
p. 200-20 (‘‘[a]n insurer’s duty to defend is expansive
and arises when any part of the claim is potentially or
arguably within the scope of the policy’s coverage, even
if the allegations of the suit are false, fraudulent, or
groundless’’ [footnote omitted]). Because, under the
pro rata allocation system that we have adopted, a poli-
cyholder that declines to obtain available coverage is
required to assume the obligations of the insurer for
periods during which it opts to self-insure, Mt. McKinley
contends that Vanderbilt is likewise required to shoul-
der its share of defense costs for underlying actions
alleging post-1985 nonasbestos particulate claims.
Mt. McKinley’s claim hinges principally on the testi-
mony of its expert witness, Donald W. Bendure, an
insurance underwriter. Bendure testified that occur-
rence based liability coverage for claims alleging bodily
injury from exposure to silica, talc, and other nonasbes-
tos particulates was ‘‘generally available’’ in the insur-
ance industry ‘‘up until 2005 . . . .’’42
Although the trial court credited that testimony, that
determination is not dispositive of the issue before us.
In its Phase I and Phase II decisions, the court repeat-
edly emphasized that the critical issue for purposes of
applying the unavailability of insurance rule was not
whether occurrence based coverage was generally
available, but rather whether such coverage was, in fact,
available to Vanderbilt. Mt. McKinley has not challenged
the propriety of that determination on appeal.
Fatal to the claim advanced by Mt. McKinley is the
trial court’s finding that Vanderbilt was unable to pro-
cure any occurrence based coverage following the sea
change in insurance industry practices in 1986.43 As the
court noted, that change was precipitated by ‘‘the flood
of asbestos related injury claims’’ throughout the indus-
try. By 1986, the court continued, ‘‘the insurance indus-
try had found the number of, and potential exposure
for, long-tail latency loss claims to be financially unat-
tractive to insure’’ with respect to ‘‘companies in the
mining and chemical industries . . . . [The insurance
industry] moved to offer . . . only claims-made poli-
cies rather than occurrence based policies’’ ‘‘to compa-
nies that carried a risk of exposure to asbestos, such as
those in the mining and chemical industries . . . .’’44
(Emphasis added.) It is undisputed that Vanderbilt was
such a company.45 The court thus found that occurrence
based coverage was unavailable to Vanderbilt during
the post-1985 period.
That finding is substantiated by evidence in the
record before us. The court heard the testimony of
Joseph Denaro, a Vanderbilt employee since 1973, who
served as the company’s vice president, chief financial
officer, and treasurer. Denaro testified that he was
involved in the procurement of insurance for Vander-
bilt. When asked whether, ‘‘in connection with [his]
efforts to secure insurance,’’ he was ‘‘given the opportu-
nity after 1986 to buy occurrence based insurance,’’
Denaro replied, ‘‘that was never offered as an opportu-
nity. . . . That was unavailable.’’ Denaro explained
that, had it been available, Vanderbilt would have been
‘‘[v]ery much’’ interested in obtaining occurrence based
coverage because it offers ‘‘greater coverage, especially
for the kinds of claims we may have encountered, which
are long-tail type where you don’t know an injury’s
occurred until many years later.’’
The court also was presented with testimony from
Nadel, a chartered property casualty underwriter at the
commercial risk management insurance brokerage firm
of Marsh & McLennan Companies. In 1997, Nadel began
working on behalf of Vanderbilt to obtain insurance.
Nadel testified that he could not secure occurrence
based coverage for Vanderbilt’s products because it
‘‘was not available . . . .’’ Nadel further confirmed that
at no time thereafter was such coverage ‘‘available in
the marketplace’’ for Vanderbilt. Nadel explained that
‘‘[b]ased upon the class of business that [Vanderbilt]
was engaged in,’’ only ‘‘a claims made policy . . . had
been [available to Vanderbilt] since 1986 . . . .’’
Jeffrey Posner, an expert witness with more than
thirty-five years of experience in the field of insurance
and risk management, further corroborated that testi-
mony. Posner testified that ‘‘occurrence based insur-
ance was available in the marketplace after 1986 for
certain clients and not available for others. Based upon
the fact that Vanderbilt . . . had long-tail claims, I
would suspect it was probably unavailable to them,
although I can’t state that definitively because I wasn’t
there. . . . I think it was probably unavailable based
upon my knowledge of the industry and what I’ve seen
in this case.’’ The trial court expressly credited the
testimony of Denaro, Nadel, and Posner, as was its
exclusive prerogative. See United Technologies Corp.
v. East Windsor, 262 Conn. 11, 26, 807 A.2d 955 (2002)
(in case tried before court, trial judge is sole arbiter of
credibility of witnesses and weight to be afforded to
specific testimony).
The court likewise was free to reject Bendure’s opin-
ion to the contrary. At trial, Bendure opined that occur-
rence based coverage ‘‘would have been generally
available to [Vanderbilt] . . . . There is not anything
remarkable about [Vanderbilt] that would have pre-
cluded them from being able to obtain occurrence based
products liability’’ coverage after 1985. In his testimony,
Bendure confirmed that an underwriter considers many
factors prior to making a judgment whether to issue a
policy, including the manufacturer’s class of business,
loss history, and financial integrity. In addition, an
underwriter would consider whether asbestos related
claims previously were brought against the manufac-
turer. On cross-examination, Bendure acknowledged
that thousands of asbestos related claims had been filed
against Vanderbilt over the years. Although he stead-
fastly maintained that whether a policy ultimately issues
‘‘would depend on the underwriter and the type of cov-
erage provided,’’ he acknowledged that an ‘‘average
underwriter’’ would not provide coverage to a manufac-
turer in Vanderbilt’s predicament. In addition, despite
his years of experience as an underwriter, Bendure
conceded that he had no experience dealing with insur-
ance policies that involved talc. Moreover, he admitted
that he had no information as to whether Vanderbilt in
fact had been offered any occurrence based coverage
after 1985. In light of the foregoing, the trial court rea-
sonably could discount Bendure’s testimony that such
coverage was available to Vanderbilt. See Kervick v.
Silver Hill Hospital, 309 Conn. 688, 717–18, 72 A.3d 1044
(2013) (trial court free to accept or reject testimony in
whole or in part).
Last, we note that no party offered any testimonial
or documentary evidence from an insurer indicating
that it would have offered occurrence based coverage
to Vanderbilt during the years in question. Although
dozens of insurance companies from around the world
are involved in this litigation, none submitted such evi-
dence at trial.
The evidence credited by the trial court supports its
finding that occurrence based coverage was unavailable
to Vanderbilt from 1986 until it ceased production of
industrial talc in 2008. That finding, therefore, is not
clearly erroneous. Mt. McKinley thus cannot demon-
strate that a departure from the unavailability of insur-
ance rule is warranted in this case.46
C
Default Date of First Exposure
and Pre-1962 Liabilities
In part III A of this opinion, we determined that third
party liability claims alleging a long-tail toxic tort such
as asbestos related disease trigger defense and liability
coverage running continuously from the date of first
exposure to the alleged toxin until the manifestation
of disease. In this part, we address two related questions
raised by Mt. McKinley. First, did the trial court properly
enforce a 2002 settlement agreement between Vander-
bilt’s primary insurers pursuant to which pre-1962 liabil-
ities were allocated to the post-1962 period? Second,
what date of first exposure applies when an underlying
complaint does not allege a date and when it would
not be possible or practical to establish the date through
discovery? We answer the former question in the affir-
mative. With respect to the latter question, we affirm
in part and reverse in part the ruling of the trial court
that a default date of first exposure of January 1, 1962,
shall apply to all asbestos related claims against Vander-
bilt. Although we agree that it was reasonable to adopt
that default date with regard to underlying claims that
already have been paid by Vanderbilt’s primary insurers,
we conclude that it is not reasonable to do so indefi-
nitely for future claims. Accordingly, we remand the
case to the trial court with direction to adopt a more
reasonable default rule for pending and future claims.
The following additional facts—as found by the trial
court unless otherwise noted—and procedural history
are relevant to these issues. It is undisputed that Conti-
nental and Hartford, respectively, provided occurrence
based primary coverage to Vanderbilt from January 1,
1962 until March 3, 1977, and from March 3, 1977 until
March 3, 1986. Although Vanderbilt consistently has
contended that Continental began providing primary
coverage on January 1, 1956, Vanderbilt has been unable
to locate copies of any Continental policies covering
the 1956 through 1961 period and, prior to the com-
mencement of the present action, the existence and
terms of those policies were unresolved and disputed
factual issues. During the first two phases of the trial,
however, Continental and Vanderbilt entered into two
stipulations pursuant to which Continental acknowl-
edged that it had issued primary policies to Vanderbilt
covering the period from January 1, 1956 to January
1, 1962.
For many decades, Hartford and Continental inde-
pendently defended and indemnified Vanderbilt in vari-
ous underlying actions alleging bodily injury resulting
from exposure to Vanderbilt’s talc. In 1995, Continental
filed an action against Hartford seeking contribution for
costs that it had incurred defending and indemnifying
Vanderbilt for asbestos related injury claims. Hartford
and Continental settled their dispute in 2002, executing
an agreement in which they reallocated between them-
selves various defense and indemnity payments that
they had made to Vanderbilt as of that date. For underly-
ing complaints that had alleged a date of first exposure
to Vanderbilt’s talc between January 1, 1962 and March
3, 1986, the allocation agreement provided that Hartford
and Continental would allocate defense and indemnity
obligations on a pro rata, time-on-the-risk basis running
from the alleged date of first exposure until March 3,
1986. The primary insurers also agreed that, for underly-
ing claims wherein the alleged date of first exposure
to Vanderbilt’s product was before January 1, 1962, or
was unknown, the pro rata allocation coverage block
for their purposes would run from January 1, 1962 to
March 3, 1986. In other words, under the agreement,
Continental did not assume responsibility for defense
or indemnity costs arising between 1948 and 1961
(because coverage could not be established), nor did
the primary insurers assign any liability to Vanderbilt for
the pre-1962 period (because they were unsure whether
proration to the insured was permitted under Connecti-
cut law).
In addition to reallocating payments that Hartford
and Continental had made on behalf of Vanderbilt, the
2002 allocation agreement also provided that the pri-
mary insurers would negotiate in good faith to establish
an allocation arrangement for future defense and
indemnity costs. Although the trial court made no
express findings with respect to this allocation arrange-
ment, there was undisputed testimony that, pursuant
to that provision, the primary insurers did in fact reach
an informal understanding according to which they con-
tinued to allocate payments on pending and future
claims according to the 2002 methodology, that is, on
the basis of a 1962–1986 allocation block.
During the Phase II trial, the question of whether the
primary insurers had properly allocated responsibility
for Vanderbilt’s pre-1962 asbestos liabilities arose with
respect to (1) underlying actions for which the primary
insurers already have provided coverage, and (2) pend-
ing and future underlying actions for which insurance
funds are yet to be expended. As to the former, Conti-
nental and Hartford contended that their respective
primary insurance policies running from 1968 to 1977
and from 1977 to 1986 had been exhausted as a result
of past payments, and they asked the trial court to find
accordingly. Vanderbilt’s excess and umbrella insurers,
whose policies are not triggered until the primary poli-
cies are exhausted, objected. They argued that, under
the continuous trigger, pro rata allocation system, the
primary insurers should have applied a default date of
first exposure of 1948, when Vanderbilt began produc-
ing talc. They further argued that Hartford and Conti-
nental wrongfully failed to allocate a pro rata share of
indemnity costs to Vanderbilt for the 1948 through 1956
period and to Continental for the 1956 through 1961
period. By artificially compressing the potential alloca-
tion block into a twenty-four year period running from
1962 to 1986, the secondary insurers argued, the primary
insurers prematurely exhausted certain policies in
effect during that time and thus prematurely brought
the secondary insurers on the risk.47
The trial court rejected the argument of the secondary
insurers. The court concluded that the primary insurers
had acted reasonably in adopting a default date of first
exposure of January 1, 1962, and it declined to reallo-
cate any payments already allocated under that
agreement. On the basis of that decision, the court also
found that all of Vanderbilt’s primary policies in effect
between January 1, 1968 and March 3, 1986, had
been exhausted.
As to pending and future actions for which insurance
funds have yet to be expended, the parties asked that
the trial court provide guidance as to the appropriate
allocation methodology. The court did not expressly
address this issue in its Phase II decision. However, the
court’s ultimate conclusion as to the default date of
first exposure is worded broadly enough that it appears
to encompass pending and future underlying actions as
well as actions already resolved by Vanderbilt’s primary
insurers: ‘‘As to any claims [that] have an unknown date
of first exposure, the default date of first exposure
shall be January 1, 1962, consistent with the allocation
agreement entered into by and between Hartford and
[Continental], which agreement the court has found to
be reasonable.’’48 The secondary insurers challenge both
determinations on appeal. We consider each issue in
turn.
1
Allocation of Past Payments under
2002 Allocation Agreement
We first consider whether the trial court properly
enforced the 2002 allocation agreement pursuant to
which Hartford and Continental allocated all of their
payments on Vanderbilt’s asbestos related liabilities
over the 1962 to 1986 period. Mt. McKinley contends
that, with respect to underlying actions that alleged a
date of first exposure prior to 1962, it was unreasonable
and unfair for the primary insurers to allocate pre-1962
liabilities to the 1962 to 1986 coverage block, resulting
in the premature exhaustion of primary policies in effect
during that period. We are not persuaded.
The following additional facts and procedural history
are relevant to our resolution of this issue. At trial,
representatives of the primary insurers testified regard-
ing the genesis of and rationales for the 2002 allocation
agreement. They testified that, at the time that Hartford
and Continental entered into the settlement agreement,
they did not have complete copies of any Continental
policies issued to Vanderbilt between 1956 and 1961,
and they were unable to confirm the existence or terms
of any such policies. In addition, as of 2002, our
Supreme Court had not yet published its Security deci-
sion, and the primary insurers were then of the opinion
that it would be improper for them to allocate to Vander-
bilt a pro-rata share of indemnity costs for the pre-
1962 period. For those reasons, they proceeded on the
assumption that Vanderbilt did not have any compre-
hensive general liability insurance prior to 1962 and
that the coverage block for long-tail claims against
Vanderbilt could not begin until that time.
The trial court also heard testimony from several
expert witnesses as to the reasonableness of this
agreement. The experts opined that, although the allo-
cation agreement did not strictly adhere to the pro rata
allocation rules that our Supreme Court later estab-
lished in Security, the agreement was fair and reason-
able under the circumstances, given what Hartford and
Continental knew and believed to be true at the time.
The experts reached that conclusion notwithstanding
their awareness that Continental had written several
letters during the 1980s and 1990s in which it acknowl-
edged that it had insured Vanderbilt from 1956 through
1977. This expert testimony was unchallenged.
Consistent with those expert opinions, the trial court
concluded that the allocation scheme adopted under
the 2002 settlement agreement was objectively reason-
able at the time of adoption. Accordingly, the court
enforced the agreement and the consequent allocations,
despite the fact that the allocation scheme did not fully
comport with the pro-rata allocation methodology that
the court established.
The court offered several justifications for its deci-
sion to uphold and enforce the settlement agreement.
First, the court credited the testimony of Continental’s
witnesses that, as of 2002, they were unable to verify
the terms of any pre-1962 policies issued to Vanderbilt.
The court expressly found that there was no evidence
that Continental took any action to conceal the exis-
tence of those policies, and that both parties entered
into the agreement in good faith. The court also found
that, as of the time of trial, the parties still had been
unable to locate copies of any pre-1962 policies, and
that there continued to be a dispute over the terms of
those policies. Moreover, the court credited the expert
testimony of two insurance risk management consul-
tants, Donald Huffer and Jeffrey Posner, both of whom
opined that the allocation method that the primary
insurers adopted in 2002 was reasonable and consistent
with industry standards.
Second, the trial court recognized that ‘‘it is the sound
public policy of Connecticut to encourage parties to
settle their disputes and to avoid protracted litigation.’’
Monti v. Wenkert, 287 Conn. 101, 125, 947 A.2d 261
(2008). Relying on Metropolitan Life Ins. Co. v. Aetna
Casualty & Surety Co., 249 Conn. 36, 55 n.21, 730 A.2d
51 (1999), the court assumed that the reasonableness
of an insurance settlement is to be assessed on the
basis of the objective facts known to the parties at
the time. The court therefore concluded that the 2002
allocation agreement could not have been rendered
unreasonable by subsequent developments, including
the release of the Security decision in 2003 and the
parties’ stipulations at trial regarding the Continental
policies issued between 1956 and 1961.
Third, the court concluded that it would be unreason-
able and impracticable to compel Hartford and Conti-
nental to retroactively reallocate the millions of dollars
that the primary insurers already had paid to resolve
thousands of underlying actions over the course of sev-
eral decades. The court explained that ‘‘[t]o effectuate
a reallocation to include, for example, the period 1956–
1962 would require the court and the parties to engage
in mathematical calculations that would not only be
extremely arduous, time-consuming, and to some
degree subjective, they would also be of marginal utility
and ultimately undermine the prior significant efforts
of the parties to compromise their differences over the
allocation of the payments between themselves and
which were made for the benefit of their insured.’’ ‘‘Such
an undertaking,’’ the court concluded, ‘‘would lie
between arduous and Sisyphean.’’
On appeal, Mt. McKinley focuses on several pur-
ported defects in the trial court’s reasoning. Mt. McKin-
ley argues that the record does not support the
conclusion of the trial court that it was reasonable for
the primary insurers to agree in 2002 to allocate all
of their indemnity payments to the post-1961 period.
Specifically, Mt. McKinley points to several documents
in the record that indicate that, during the 1980s and
1990s, Continental repeatedly confirmed the existence
and limits of its 1956-to-1961 policies. Relatedly, Mt.
McKinley argues that neither the trial court nor any of
the experts whose testimony the court credited were
able to explain how it could be reasonable for the pri-
mary insurers to enter into an agreement by which
they effectively transferred their own obligations to
the secondary insurers. Because those expert opinions
were wholly conclusory, Mt. McKinley contends, it was
improper for the trial court to rely on them. Finally,
Mt. McKinley emphasizes that Hartford and Continental
agreed only among themselves to allocate liabilities
exclusively to the post-1962 period, and that none of
the secondary insurers were party to that agreement.
a
Standard of Review
Whether the trial court properly determined that the
scheme established by the 2002 allocation agreement
was reasonable and enforceable presents a mixed ques-
tion of fact and law. To the extent that the court’s
determination hinged on its finding credible the expert
testimony of Huffer and Posner regarding insurance
industry standards, that determination will not be dis-
turbed unless clearly erroneous. See Wyszomierski v.
Siracusa, 290 Conn. 225, 243–44, 963 A.2d 943 (2009).
Whether the court applied the correct legal standard
with regard to the enforceability of settlement
agreements, however, is a question of law subject to
plenary review. Costantino v. Skolnick, 294 Conn. 719,
730, 988 A.2d 257 (2010).
b
Whether Court’s Reliance on Expert Testimony
Was Clearly Erroneous
With respect to the expert testimony, Mt. McKinley
relies on the principle that ‘‘[n]o weight may be
accorded to an expert opinion [that] is totally conclu-
sory in nature and [that] is unsupported by any discern-
ible, factually based chain of underlying reasoning
. . . .’’ (Internal quotation marks omitted.) Commis-
sioner of Transportation v. Larobina, 92 Conn. App.
15, 26, 882 A.2d 1265, cert. denied, 276 Conn. 931, 889
A.2d 816 (2005); see also State v. Asherman, 193 Conn.
695, 716, 478 A.2d 227 (1984) (‘‘[i]n order to render an
expert opinion . . . there must be a factual basis for
the opinion’’), cert. denied, 470 U.S. 1050, 105 S. Ct.
1749, 84 L. Ed. 2d 814 (1985). Mt. McKinley contends
that neither Huffer nor Posner offered any support for
their opinions that the allocation agreement was reason-
able. Mt. McKinley further argues that the experts failed
to explain how it could have been reasonable for Conti-
nental and Hartford to proceed on the assumption that
there was no coverage before 1962 when Continental
had acknowledged in several letters, written prior to
the allocation agreement, that it provided coverage to
Vanderbilt beginning in 1956.
We disagree that the expert testimony on this subject
was so conclusory as to render the trial court’s reliance
on it clearly erroneous. At least one of the experts,
Donald Huffer, was aware of the various letters written
during the 1980s and 1990s in which representatives of
Continental had acknowledged that Continental pro-
vided liability insurance to Vanderbilt beginning in 1956.
Nevertheless, it was Huffer’s opinion that, according to
the customs, practices, and standards of the insurance
industry, it was not unreasonable for the primary insur-
ers to agree in 2002 to use an allocation block commenc-
ing in 1962. Huffer based his opinion on the principle
that, according to industry standards, Hartford and Con-
tinental were obligated to allocate payments over con-
firmed coverage periods only and that, without having
in hand an actual policy by which the precise terms of
coverage can be ascertained, a mere acknowledgement
letter stating in general terms that an insurer provided
coverage during a particular year does not suffice to
confirm coverage for the types of claims at issue.
Although Huffer’s testimony in this respect was some-
what tentative and not as specific as it might have been,
he did proffer a factually based chain of reasoning for
his opinion. Accordingly, we cannot say that Huffer’s
testimony was so conclusory that the court’s reliance
thereon was clearly erroneous.49
c
Whether Allocation Agreement Was Enforceable
Against Secondary Insurers
We next consider whether, as a matter of law, the
trial court properly concluded that it was not improper
for the primary insurers to allocate payments in a man-
ner that may have prematurely triggered Vanderbilt’s
excess and umbrella policies, notwithstanding that the
secondary insurers were not party to the allocation
agreement. The following principles govern our resolu-
tion of this claim.
As a general rule, a secondary insurer is not bound
by the coverage decisions of a primary insurer; it
remains free to contest coverage under its own policy.
See, e.g., Allmerica Financial Corp. v. Certain Under-
writers at Lloyd’s, London, 449 Mass. 621, 633, 871
N.E.2d 418 (2007) (explaining that ‘‘[a]n excess carrier’s
intent to incorporate the same words used in a separate
agreement between the primary insurer and the insured
does not imply an intent by the excess carrier to accept
decisions made by the primary carrier about the extent
of its obligations under its own agreement’’). At the
same time, however, ‘‘an excess liability insurer cannot
avoid or reduce liability under its own policy by chal-
lenging a separate insurer’s decision to settle or pay
out claims at a prior layer of insurance. In the absence of
a specific contractual arrangement, the primary insurer
owes no duty to the excess insurer with respect to
claims within the parameters of [the] excess carrier’s
coverage. . . . An excess liability insurer, particularly
a follow-form insurer, assumes the risk that the primary
insurer will adjust claims in a certain manner and in
such a way that triggers the potential for liability . . .
under the excess policy.’’ (Citation omitted; internal
quotation marks omitted.) Edward E. Gillen Co. v. Ins.
Co. of Pennsylvania, Docket No. 10-C-564, 2011 WL
1694431, *4 (E.D. Wis. May 3, 2011); see also Allmerica
Financial Corp. v. Certain Underwriters at Lloyd’s,
London, supra, 634 (recognizing right of insurer to make
coverage and settlement decisions independent of third
parties, including other insurers).
Nevertheless, when a primary insurer negotiates set-
tlement of a claim in an amount that invades excess
coverage, it ‘‘owes a duty of good faith to the excess
carrier . . . . It must consider in good faith the inter-
ests of the excess insurer . . . and must conduct the
defense of the litigation, including settlement negotia-
tions, so as not to expose the excess insurer to unwar-
ranted liabilities.’’ (Internal quotation marks omitted.)
RLI Ins. Co. v. Superior Court of Ventura County,
Docket No. B173316, 2004 WL 1171649, *5 (Cal. App.
May 26, 2004); cf. Infinity Ins. Co. v. Worcester Ins.
Co., Superior Court, judicial district of Hartford, Docket
No. CV-00-0597436 (December 4, 2000) (28 Conn. L.
Rptr. 478) (suggesting that excess insurer may maintain
action for equitable subrogation against primary insurer
stemming from primary insurer’s settlement with
insured).
We find the reasoning of the District Court in E.R.
Squibb & Sons, Inc. v. Accident & Casualty Ins. Co.,
860 F. Supp. 124 (S.D.N.Y. 1994), to be persuasive on
this point. The plaintiff in that case brought an action
against its excess carriers for coverage in connection
with product liability claims arising out of injuries
incurred by users of the product diethylstilbestrol. The
plaintiff and its primary carriers entered into a number
of settlement agreements, which resulted in the exhaus-
tion of the primary policies. The excess insurers chal-
lenged these agreements, but the court enforced them,
holding that ‘‘exhaustion [of primary insurance] may
occur by payment or settlement, provided the settle-
ment is noncollusive and at arm’s length.’’ Id., 126. The
court offered the following illustration to clarify its
holding: ‘‘[A]ssume that insurer A agrees with [a plain-
tiff] in a settlement agreement that in return for various
immediate payments or other consideration, only mani-
festation or diagnosis will trigger that insurer’s cover-
age. No other insurer, excess or otherwise, can avoid
coverage because of this restriction on A’s liability in
the settlement between [the plaintiff] and insurer A.’’
(Emphasis added.) Id.
Consistent with these principles, our sister courts
have refused to enforce agreements among primary
insurers or between primary insurers and the insured
when it is apparent that the intent of the agreement is
to transfer to excess insurers costs that clearly should
have been borne by the primary coverage. For example,
in Rees v. Viking Ins. Co., 77 Wash. App. 716, 718–19, 892
P.2d 1128 (1995), the plaintiffs and the primary insurer
agreed to a settlement according to which liability was
stipulated to be $600,000 but the primary insurer was
required to pay only $421,250 of a $500,000 policy limit,
leaving the excess insurer on the hook for the balance.
Concluding that the agreement was ‘‘little more than
an artifice designed to support a claim against [the]
excess policy,’’ the Court of Appeals of the state of
Washington affirmed the judgment of the trial court
dismissing the plaintiffs’ claim against the excess
insurer. Id., 719–20; see also New York Dock Co. v.
Ernest W. Brown, Inc., 272 N.Y. 176, 180, 5 N.E.2d
190 (1936). Noncollusive settlements, by contrast, have
been enforced as promoting the public policy in favor
of settlement. See, e.g., United States Fidelity & Guar-
anty Co. v. Treadwell Corp., supra, 58 F. Supp. 2d 107
(‘‘treating a primary insurer’s settlement with an insured
as binding for allocation purposes, at least in the
absence of evidence of collusion to defraud an excess
insurer, furthers the strong public interest in promot-
ing settlement’’).
In the present case, although there was some evi-
dence that Continental previously had acknowledged
providing coverage to Vanderbilt prior to 1962, the trial
court found that neither the coverage nor the parame-
ters thereof could be confirmed as of 2002.50 The court
also found that Continental and Hartford entered into
the allocation agreement in good faith. Absent any evi-
dence that the primary insurers intentionally allocated
payments so as to shift their obligations onto the sec-
ondary insurers, we cannot conclude that it was
improper for the trial court to uphold and enforce the
allocation agreement.
2
Default Date of First Exposure for
Pending and Future Actions
We next consider what default date of first exposure
should apply to pending and future claims against Vand-
erbilt. Mt. McKinley contends that, even if it was reason-
able for the primary insurers to use a 1962 default date
for purposes of their 2002 settlement agreement, it is not
reasonable to continue to use that date going forward
in light of (1) Continental’s recent stipulations that it
provided coverage from 1956 through 1961, and (2) our
Supreme Court’s determination in Security that, under
Connecticut law, defense and indemnity costs should
be prorated to the insured for any periods during which
the policyholder loses its policy or opts to self-insure.
Mt. McKinley emphasizes that the principal rationales
on which the trial court relied in upholding the 2002
agreement—the public policy favoring settlement and
the practical difficulties that would attend reallocating
past insurance payments using a different default
date—do not apply with respect to pending or future
claims for which payments have yet to be made. For
purposes of those claims, Mt. McKinley contends, there
simply is no reason to continue to bind all of the parties
to the terms of a settlement agreement that was predi-
cated on an erroneous understanding of Connecticut
law and to which only the primary insurers were party.
Rather, Mt. McKinley submits that obligations to defend
and indemnify pending and future claims should be
allocated on the basis of a 1948 default date of first
exposure because that is the earliest date that a claim-
ant could have been injured by Vanderbilt’s talc. We
agree with Mt. McKinley’s premises but not with its con-
clusion.
The trial court’s determination that the 2002 settle-
ment agreement reasonably adopted a 1962 default date
of first exposure was predicated on the fact that, at the
time of the agreement, Vanderbilt could not prove that
Continental had issued any policies prior to 1962 and
it was not yet established that Vanderbilt, as the policy-
holder, was responsible for a pro rata share of the costs
for years in which it was uninsured. However, if it had
been understood at that time that Vanderbilt could be
held accountable for the 1948 to 1955 period and Conti-
nental for the 1956 to 1961 period, then it would not
have been reasonable for the primary insurers to enter
into an agreement that would absolve Vanderbilt and
Continental of their responsibility for fourteen years
worth of defense and indemnity costs and, by transfer-
ring those costs to the 1962–1986 primary policies, pre-
maturely exhaust those policies and shift the burden
to the secondary insurers. See, e.g., New York Dock Co.
v. Ernest W. Brown, Inc., supra, 272 N.Y. 180; Rees v.
Viking Ins. Co., supra, 77 Wash. App. 719. By the same
logic, now that the parties’ respective responsibilities
for the pre-1962 period have been established, we see
no reason why they should continue to rely for pending
and future actions on a 1962 default date that (1) was
chosen only because that was when the coverage block
was believed to commence, and (2) would continue to
benefit Vanderbilt and the parties to the 2002 settlement
agreement at the expense of secondary insurers who
did not consent to be bound thereby.
On the other hand, we perceive no rationale for mov-
ing the default date of first exposure for future claims
fourteen years further into the past, to 1948, as Mt.
McKinley proposes. If an underlying plaintiff is diag-
nosed in 2017, a default exposure date of 1948 would
imply a latency period of nearly seventy years, which
far exceeds the typical latency period for any asbestos
related disease. Moreover, if that hypothetical plaintiff
was first exposed to Vanderbilt’s talc at the age of
twenty-five and his disease in fact took forty years to
manifest, then Mt. McKinley’s proposed rule would
require that we apply a presumptive date of first expo-
sure before he was even born. The absurd consequences
of such a rule would be amplified over time, as it will
become increasingly unlikely that any new claim origi-
nated with an exposure during the Truman adminis-
tration.
Mt. McKinley’s principal argument in favor of a
default date of first exposure of 1948—the year that
Vanderbilt entered the talc business—is that in Security
our Supreme Court chose as a default date 1951, which
was the year that the defendant in that case began
applying fireproofing materials containing asbestos.
See Security Ins. Co. of Hartford v. Lumbermens
Mutual Casualty Co., supra, 264 Conn. 691. We read
Security differently. The question of the default date
of first exposure was not at issue in that appeal. Rather,
our Supreme Court merely noted that the parties had
agreed that the defendant’s potential liability com-
menced on the date that it entered the asbestos busi-
ness. The court neither analyzed the reasonableness of
that agreement nor established that, as a general rule,
the default date of first exposure in a long-tail asbestos
related disease claim should be the date that the defen-
dant entered the business, even when that date is
decades earlier than a claimant reasonably could have
been exposed. We therefore reject Mt. McKinley’s argu-
ment that the trial court should have adopted a default
date of 1948.
The question, then, is what constitutes a reasonable
default date of first exposure for pending and future
claims against Vanderbilt that do not allege a date of
first exposure and for which a date cannot be readily
established through discovery. Continental proposes
that we adopt an approach whereby the default date
for underlying actions would simply be the average of
the dates that are alleged in all of the underlying actions
brought during the preceding five years. Under that
approach, the default date of first exposure would con-
tinue to refresh for newly filed claims and could be
expected to remain reasonably accurate.
Although Continental’s proposal appears sensible,
neither the other parties nor the trial court have
addressed it in any depth,51 and the record before us is
inadequate to assess its merits vis-a``-vis other possible
approaches. It would be helpful, for example, to know
the following: (1) whether a statistically meaningful
comparator could be obtained by consulting only those
peer cases brought during the year or two preceding
the claim at issue, rather than going back five years;
(2) whether it would be preferable simply to consult and
average the exposure dates alleged in some statistically
meaningful number of immediately preceding actions,
rather than averaging all of the actions filed during
some arbitrary time period; (3) whether only actions
alleging the same disease as that alleged in the claim
at issue should be included; and (4) whether it would
be preferable to back into a default date of first expo-
sure on the basis of expert testimony as to the average
latency period for the disease alleged. We believe that
these and other questions; see, e.g., part III B 2 a of
this opinion; can best be answered in the first instance
by the trial court. Accordingly, we remand the matter to
the trial court to take additional testimony if warranted,
make any necessary findings, and articulate what it
considers to be the most reasonable method of estab-
lishing a default date of first exposure for pending and
future underlying actions in which a date is not alleged
and cannot practically be established through dis-
covery.
D
Mathematical Allocation Formula
and Orphan Shares
The next set of issues concerns the mathematical
formula that the trial court used during the Phase II
trial to calculate Vanderbilt’s pro rata share of defense
and indemnity costs. Almost all of the parties share
the belief that the trial court miscalculated Vanderbilt’s
share, but they offer differing proposals as to the proper
formula. We take this opportunity to clarify the
proper approach.52
The following additional procedural history is rele-
vant to our analysis. In its decisions following the Phase
I and Phase II trials, the trial court determined during
which years between 1948 and 2008 Vanderbilt should
be treated as self-insured for purposes of allocating
asbestos related defense and indemnity obligations,
respectively. Having made those determinations, the
court then proceeded to outline the general formula by
which Vanderbilt’s total liability was to be calculated.
The court’s starting point was footnotes 13 and 17 in
Security, in which our Supreme Court concluded that
the following allocation method was reasonable: ‘‘[P]ro-
ration-to-the-insured [is determined] by obliging [the
policyholder] to pay a share of each claim represented
by a fraction that has as its denominator the number
of years of the injury up to 1985, [the time at which
insurance companies ceased providing asbestos related
comprehensive general liability coverage], and as its
numerator the number of those years in which [the
policyholder] was uninsured . . . .’’ (Internal quota-
tion marks omitted.) Security Ins. Co. of Hartford v.
Lumbermens Mutual Casualty Co., supra, 264 Conn.
698 n.13; see id., 720 n.17. To determine a policyholder’s
pro rata share of defense and indemnity obligations,
then, Security instructs the trier of fact to determine
two numbers: (1) the number of months in the coverage
block and (2) the number of those months that the
policyholder is effectively self-insured.53 The policy-
holder’s obligations are then calculated by dividing the
latter (the numerator) into the former (the denomina-
tor), and multiplying the result by the judgment or set-
tlement amount in a particular case. The same approach
applies to calculating the obligations of the policyhold-
er’s various insurers; each is responsible, up to the
policy limits, for a percentage share of the total alloca-
tion block corresponding to its time on the risk.
Applying these rules to the present case, the trial
court determined that the coverage block for asbestos
related claims against Vanderbilt runs from 1948
through 2008—a total of 720 months.54 This represents
the denominator in the allocation formula. With respect
to defense costs, the court determined that Vanderbilt
is responsible for at least 265 of these 720 months, or
36.8 percent. With respect to indemnity costs, the court
determined that Vanderbilt is responsible for at least
ninety-six of these 720 months, or 13.3 percent. The
difference reflects the court’s finding that Vanderbilt
was responsible for defense but not indemnity costs
between 1993 and 2007, a period during which asbestos
related coverage was generally unavailable but when
Vanderbilt was able to obtain some limited claims-made
coverage. The court also concluded that, in addition to
those self-insured months, Vanderbilt would be held
responsible for a gap period between March 25, 1978
and April 26, 1978, when the company was underin-
sured, as well as for any period during which its insurers
had become insolvent.55
On appeal, we review the trial court’s legal conclu-
sions de novo and its factual determinations for clear
error. We note at the outset that, with respect to the
general allocation formula for long-tail toxic tort claims,
we agree with the trial court that Security provides the
proper framework for allocating costs between insurers
and policyholders. Defense and indemnity costs are to
be allocated evenly over the period of injury pursuant
to a continuous trigger theory, and each insurer is then
responsible, up to its policy limits, for the periods during
which it was on the risk. For its part, the policyholder
is liable for those periods during which it was effectively
self-insured, as well as for any residual amounts after
the primary and secondary policies in any given year
have been exhausted. See Champion Dyeing & Finish-
ing Co. v. Centennial Ins. Co., supra, 355 N.J. Super.
277; M. Doherty, supra, 64 U. Chi. L. Rev. 281.
With respect to the numerator in the allocation for-
mula, and specifically as to Vanderbilt’s share of the
costs, Vanderbilt does not challenge the court’s finding
that it is responsible for both defense and indemnity
costs for the ninety-six month lost policy period from
1948 through 1955, as well as for the 1978 gap period
and any periods of insurer insolvency. As we explained
in part III C of this opinion, however, Vanderbilt con-
tends, and we agree, that the trial court went astray in
concluding that Vanderbilt was liable for a pro rata
share of defense costs for the years 1993 through 2007.
The court’s conclusion in Phase II that Vanderbilt was
liable for 265 months of defense costs, which includes
the 1993–2007 period, was thus incorrect.
Turning next to the denominator, the parties gener-
ally agree that the trial court, having adopted a continu-
ous trigger theory of injury and an unavailability of
insurance rule, should not have used an allocation block
running from 1948 through 2008. They contend that the
allocation block applied by the trial court (1) would
result in the creation of ‘‘orphan shares’’ for which no
party is responsible and (2) represents the maximum
possible range of injury but will exceed the actual allo-
cation block to be applied in most cases. We agree with
both contentions.
1
Orphan Shares
We first address the issue of orphan shares. With
respect to the period after March 3, 1986, when Vander-
bilt’s comprehensive general liability policies expired
and asbestos coverage was generally unavailable, the
trial court concluded that Vanderbilt was not self-
insured as to indemnity insurance at any time and, with
respect to defense cost coverage, that Vanderbilt was
to be deemed self-insured only from March 3, 1993
through April 24, 2007. In part III C of this opinion, we
held that the trial court incorrectly determined that
Vanderbilt was self-insured for defense costs from
March 3, 1993 through April 24, 2007. Therefore, with
respect to underlying actions alleging a date of first
exposure prior to March, 1986, Vanderbilt should not
be assigned any share of the post-1985 allocation block.
It is also the case, however, that, with a few limited
exceptions, none of Vanderbilt’s insurers issued poli-
cies for the post-1985 period that covered asbestos
related claims. Accordingly, if the court were to employ
a pro rata allocation scheme in which the allocation
block runs from 1948 through 2008, then there would
be a period of more than twenty-two years, from 1986
to 2008, in which costs were allocated to months for
which neither Vanderbilt nor any of its insurers bore
responsibility. In other words, more than 37 percent of
the total costs would be orphan shares.
For this reason, we agree with the parties that periods
during which no insurer issued coverage and the policy-
holder is not treated as self-insured should not be
included in the total allocation block. This approach
comports with the methodology that our Supreme Court
adopted in Security; see Security Ins. Co. of Hartford
v. Lumbermens Mutual Casualty Co., supra, 264 Conn.
698 n.13; and we believe that it is a necessary corollary
of the unavailability of insurance rule. Accordingly, with
certain exceptions to be discussed hereinafter, no
indemnity or defense costs arising from pre-1986 expo-
sures should be allocated to the post-1985 period. The
total allocation block should run from January 1, 1948,
when Vanderbilt began producing talc, until its occur-
rence based policies expired on March 3, 1986, or just
over 458 months. Vanderbilt is responsible for at least
ninety-six months—roughly 21 percent—of that period,
representing its period of self-insurance from 1948
through 1955. Vanderbilt also will be responsible for any
additional periods of self-insurance or underinsurance,
including periods of insurer insolvency, as determined
by the trial court.
2
Maximum Coverage Block
Turning to the parties’ second contention, we also
agree with Vanderbilt and many of the defendants that
this allocation represents the maximum period of injury
for allocation purposes, and Vanderbilt’s share of that
maximum,56 but that the actual allocation block and the
parties’ shares thereof will vary on a case-by-case basis.
That is to say, in the event that an underlying plaintiff
was first exposed to Vanderbilt talc on January 1, 1948,
and did not manifest asbestos related disease until after
March 3, 1986, then that plaintiff’s injuries as defined
by the continuous trigger theory would span the entire
allocation block, and each party’s respective share of
liability for that particular plaintiff would be the same
as its share of the total allocation block. In most
instances, a particular plaintiff’s injuries will span only
a portion of the total allocation block, either because
they will have been exposed after January 1, 1948, or
because they will have manifested disease before March
3, 1986. The shares of defense and liability costs attribut-
able to Vanderbilt and to its various insurers in such
instances are not fixed; they will vary in each case. For
example, Vanderbilt, which is treated as self-insured
for the 1948 through 1955 period, would be responsible
for the lion’s share of costs arising from an underlying
action alleging a date of first exposure in 1949 and
manifestation of disease in 1959, whereas Hartford
would shoulder more of the responsibility for a claim
alleging first exposure in 1980 and manifestation some-
time after 1986.
3
Additional Allocation Issues
Finally, we address three additional issues that the
parties have raised with respect to the allocation for-
mula and that are likely to confront the trial court on
remand or during the next phase of the trial. First, the
parties dispute whether and how the allocation block
should be expanded to account for the fact that Vander-
bilt was able to obtain claims-made coverage between
1993 and 2007. As we explained in part III B 3 of this
opinion, the fundamental differences between occur-
rence based and claims-made policies imply that it
would not be appropriate to include in the total alloca-
tion block all of the years in which Vanderbilt obtained
claims-made policies after occurrence based coverage
for asbestos related disease had become unavailable.
A question arises, however, as to how costs should be
allocated when an underlying plaintiff is first exposed
to a potential toxin prior to 1986, while occurrence
based policies were in effect, but is diagnosed with
asbestos related disease and files suit after 1985, in a
year in which a claims-made policy was in effect. Under
those circumstances, there is no doubt that the claims-
made policy is also on the risk. As our sister courts
have recognized, ‘‘the issue [of pro rata allocation of
long-tail tort liabilities] becomes infinitely more compli-
cated when a risk is covered by a succession of policies
written first on an occurrence and, in later years, on a
claims-made basis . . . .’’ Champion Dyeing & Fin-
ishing Co. v. Centennial Ins. Co., supra, 355 N.J.
Super. 268.
In such a scenario, Vanderbilt contends, and we
agree, that the most sensible approach is simply to
expand the allocation block to include the claims-made
policy period during which the claim is brought. For
example, if an underlying plaintiff brought an action
in January, 1995, alleging a date of first exposure to
Vanderbilt’s talc in January, 1965, then the allocation
block would comprise approximately 266 months—the
period from January, 1965 through March, 1986, plus the
twelve months of 1994–1995 during which the Gerling
policy was in effect. This approach is fair to all parties,
comports with their reasonable expectations, and maxi-
mizes the resources available to respond to claims.57
Second, and relatedly, the parties disagree as to how
the allocation formula is to be applied to years such as
2003, when Vanderbilt was able to obtain a primary
insurance policy but when excess and umbrella insur-
ance covering asbestos related claims was not available.
Vanderbilt submits that no costs should be allocated
to that year because the only coverage it obtained—
the 2003 American International primary policy—has
been exhausted. In any event, Vanderbilt argues, no
costs should be allocated to it for 2003 because it pur-
chased all available insurance for that year. Mt. McKin-
ley, by contrast, contends that 2003 should be treated
the same as any other year in which insurance was
available, and that whether the policy has exhausted is
irrelevant to the allocation formula.
As a general rule, Mt. McKinley is correct that long-
tail liabilities are allocated evenly across the relevant
allocation block without regard to whether particular
policies in particular years have been exhausted. Once
a sum has been allocated to a particular year or policy
period, then any policies on the risk for that period
must absorb the costs, pursuant to the policy terms,
until exhausted, and once all policies are exhausted the
insured is liable for any remainder.
The present case presents a problem, however, inso-
far as Vanderbilt was able to obtain limited primary
coverage but no secondary coverage in 2003. We already
have concluded that it would be improper to treat Vand-
erbilt as self-insured for that year because it obtained
all available insurance. See part III B 3 of this opinion.
But if we were to allocate to 2003 an equal share of
the liabilities for claims brought in that year, the effect
would be the same. Once the relatively low primary
policy limit exhausts, Vanderbilt would be liable for a
potentially sizable residual. This would run counter to
the rationales that underlie the unavailability rule, and
also would create a disincentive for policyholders to
make every effort to obtain any insurance coverage
during periods when adequate coverage is not readily
available. Cf. Olin Corp. v. Ins. Co. of North America,
221 F.3d 307, 327 (2d Cir. 2000).
In general, then, we believe that the fairest and most
reasonable approach, ab initio, would have been to
include 2003 in the allocation block up to the policy
limits for that year, but then to divide the remainder
among the years for which insurance was fully avail-
able.58 In the present case, however, because the 2003
American International policy is already exhausted, the
outcome effectively will be that sought by Vanderbilt:
2003 should not be included in the allocation block with
respect to pending and future liabilities.
Third, we consider Vanderbilt’s argument, raised in
its reply brief, that, if the trial court determines that it
was uninsured or underinsured during certain months
or years prior to 1986, it should be held responsible for
a pro rata share of the costs for those periods only if
the defendants can prove that insurance was generally
available. Vanderbilt contends that the defendants bear
the burden of establishing the availability of insurance
and that they have failed to satisfy that burden. There-
fore, because Vanderbilt’s failure to obtain insurance
during certain pre-1986 periods might simply reflect the
fact that insurance was unavailable at the time, there
should be no proration to the insured for those periods.
We are not persuaded.
In its Phase I and Phase II decisions, the trial court
found that it was undisputed that insurance for the
defense and indemnification of asbestos related injury
claims was available through 1985, and noted that the
parties had stipulated accordingly. The court specifi-
cally noted that it was in 1985 that asbestos exclusion
clauses were first incorporated into the standard form
comprehensive general liability policy. Other courts and
commentators likewise have observed that there was
no issue with respect to the availability of coverage for
asbestos related claims prior to the mid-1980s. See, e.g.,
Stonewall Ins. Co. v. Asbestos Claims Management
Corp., supra, 73 F.3d 1204 n.18; J. Stempel, supra, 12
Conn. Ins. L.J. 464–65. We therefore disagree with Vand-
erbilt that its insurers bore the burden of establishing
the availability of insurance coverage prior to 1986.59
Moreover, prior to filing its reply brief in this court,
Vanderbilt repeatedly conceded the accuracy of the
court’s findings. Both at trial and in its initial appellate
brief, Vanderbilt acknowledged that the trial court was
correct in finding that insurance for the defense of
claims of asbestos related injury was available from
1948 until March, 1986. Having permitted the trial court
to rely on that representation, Vanderbilt will not now
be heard to contradict it. See Dougan v. Dougan, 301
Conn. 361, 372–73, 21 A.3d 791 (2011). Accordingly, we
will not disturb the finding of the trial court that cover-
age for asbestos related injuries was available prior to
1986, nor its conclusion that Vanderbilt must be treated
as self-insured for any portion of that time for which
it was uninsured or underinsured.
E
Prospective Application of Court’s Rulings
We next consider claims by certain insurers that the
trial court improperly determined that its findings and
allocation rules would be applied on a prospective basis
from the date of the Phase II memorandum of decision.
Such an approach would result, among other things, in
freeing Vanderbilt from any responsibility for a pro rata
share of its past defense and indemnity costs. Although
we agree that a prospective only application of the
court’s rulings in the present case would be presump-
tively improper, we do not understand that to have been
the court’s intention.
The following additional procedural history is rele-
vant to this issue. At the end of its Phase II decision,
the court ruled that its ‘‘findings in Phases I and II lead
the court to the conclusion that the allocation of defense
and indemnity costs shall be applied prospectively, and
consistent with the principles set forth in Security
. . . .’’ The court did not elaborate on its meaning or
intent in stating that its findings would be applied in a
prospective manner.
In a counterclaim it filed, Mt. McKinley had requested
that the court reallocate prior defense and indemnity
expenditures on a pro rata basis and order reimburse-
ment by Vanderbilt in accordance therewith.60 Follow-
ing the release of the Phase II decision, Mt. McKinley
filed a motion to ‘‘reargue, reconsider and/or clarify’’
that decision, in which it asked the court to clarify its
prospectivity ruling in light of ‘‘the fact that all payments
for defense and indemnity Mt. McKinley has made over
the past several years [have] been subject to a full and
express reservation of rights . . . .’’ Mt. McKinley
averred that ‘‘nowhere does the Phase II decision iden-
tify or define what is meant by ‘prospectively.’ Nor
does the Phase II decision identify any legal basis for
‘prospective’ application.’’ Mt. McKinley further argued
that ‘‘there certainly is no basis in law or fact to apply
pro rata allocation’’ from the date of the Phase II
decision.
In denying the motion, the court reiterated that ‘‘[t]he
issues as to . . . any claim of damages for recovery
from the plaintiff for the overpayment of defense and
indemnity costs by [Continental] and other carriers, or
any claims of reimbursement between carriers, were
reserved to later phases of the trial. . . . Any claims
and defenses relative to the obligation of specific poli-
cies that have not already been addressed by the court
in . . . Phases I and II . . . remain under consider-
ation pending the completion of the later phases of the
trial.’’ With particular respect to its prospectivity ruling,
the court stated only that it contained no ambiguity
‘‘that would necessitate clarification.’’ That ruling did
not address the issue of Mt. McKinley’s reservation
of rights.
On appeal, Vanderbilt contends—and many of the
defendants agree—that the use of the term ‘‘prospec-
tively’’ indicates the court’s intention that its pro rata,
time-on-the-risk allocation methodology will apply only
to future defense and indemnity expenditures. The par-
ties disagree, however, as to whether such a prospective
only application of the court’s findings and allocation
methods would be appropriate. Vanderbilt contends
that to go back and reallocate past payments on thou-
sands of underlying claims would be impracticable. Mt.
McKinley, by contrast, contends that application of the
correct allocation methodology solely from the date
of the court’s Phase II decision would eviscerate its
reservation of rights and confound a central purpose
of the pending Phase III proceeding. Mt. McKinley thus
argues that the allocation methodology should apply
retroactively, rather than from the March 28, 2014 date
of the Phase II decision. For its part, Hartford argues
that, regardless of what the trial court intended, the
court’s allocation rules should be applied retroactively
to December 2, 2011—the date when Hartford’s primary
policies exhausted—to assure that Hartford’s policy
limits are not reopened.61
The proper application of the allocation methodology
adopted by the trial court, as refined by this court on
appeal, presents an issue of law over which we exercise
de novo review. Despite the breadth of that review, we
are mindful of the trial court’s observation that the
present case is decided in ‘‘the unique context of mass
long latency losses, a situation which . . . requires a
specialized response insofar as allocation is con-
cerned.’’
1
Whether Trial Court Intended to Apply
its Allocation Rules Prospectively
We first consider whether the parties have correctly
construed the court’s Phase II decision and, specifically,
whether the court intended that all of its findings and
rulings would apply on a prospective only basis. Viewed
in light of the entirety of the Phase II decision and
related orders, we conclude that the court intended oth-
erwise.
Relying primarily on the common usage of the term,
Vanderbilt argues that ‘‘prospectively,’’ as that term is
used in the court’s decision, ‘‘means from the date of
the Phase II decision . . . .’’ The common understand-
ing of the term ‘‘prospective’’ is not in dispute, which
is defined as ‘‘relating to or effective in the future.’’
Merriam-Webster’s Collegiate Dictionary (11th Ed.
2003) p. 998; see also Black’s Law Dictionary (9th Ed.
2009) p. 1342 (defining ‘‘prospective’’ as ‘‘[e]ffective or
operative in the future’’); Ballentine’s Law Dictionary
(3d Ed. 1969) p. 1014 (defining ‘‘prospective’’ as ‘‘[l]ook-
ing to the future’’). In Vanderbilt’s view, the court’s use
of that term in the concluding sentence of its seventy-
seven page memorandum of decision indicates that all
of the court’s allocation rulings are to be applied on a
prospective only basis, thereby foreclosing reimburse-
ment claims for defense and indemnity expenditures
incurred prior to March 28, 2014.
It is well established, however, that, ‘‘an opinion must
be read as a whole, without particular portions read
in isolation, to discern the parameters of its holding.’’
Fisher v. Big Y Foods, Inc., 298 Conn. 414, 424–25, 3
A.3d 919 (2010); see also Matza v. Matza, 226 Conn.
166, 187, 627 A.2d 414 (1993) (‘‘[t]he two sentences upon
which the defendant hangs her hat must be read in
the context of the entire memorandum of decision’’);
McGaffin v. Roberts, 193 Conn. 393, 408, 479 A.2d 176
(1984) (‘‘[t]he memorandum of decision must be read
as a whole to put these statements in fair context’’),
cert. denied, 470 U.S. 1050, 105 S. Ct. 1747, 84 L. Ed.
2d 813 (1985). Vanderbilt’s reading of the sentence at
issue is in tension with multiple other portions of the
Phase II decision, as well as with the court’s prior and
subsequent procedural rulings.
The principal infirmity in Vanderbilt’s interpretation
is that it largely ignores the unique procedural posture
of this multiphase litigation. From the outset, various
defendants have asserted claims for reimbursement for
past payments stemming from their participation in the
defense and indemnity of Vanderbilt with respect to
the underlying actions. Some, such as Mt. McKinley;
see footnote 60 of this opinion; specifically requested
that the court reallocate the respective obligations of
Vanderbilt and the insurers on a pro rata basis and
order reimbursement accordingly. In response, the
court repeatedly apprised the parties that it would adju-
dicate claims for reimbursement of past defense and
indemnity payments in a future phase of this litigation,
and entered orders to that effect.
On June 4, 2012, for example, the court entered the
first of many bifurcation orders. In its order, the court
noted in relevant part that ‘‘all claims relative to the
issues of allocation . . . reimbursement and/or over-
payment of defense costs . . . shall . . . be tried to
the court.’’ Continental thereafter filed a motion ‘‘to
further bifurcate from the court trial any evidence
regarding claims for damages on the issue of recovering
from [Vanderbilt] any reimbursement and/or the over-
payment of defense and indemnity costs by all parties.’’
The court granted that motion and ordered that ‘‘[t]hose
issues shall be tried at a later dated to be scheduled
by the court.’’ In its July 18, 2012 order, the court con-
firmed that ‘‘[u]pon resolution of the coverage block
issue through the written opinion of the court, the par-
ties shall then . . . try the remaining issues left for
trial to the court,’’ including ‘‘the claims of damages for
the recovery of overpayments by [insurers] of [Vander-
bilt’s] defense and indemnity costs . . . .’’ (Citations
omitted.) Approximately two months after issuing its
Phase I decision, the court again noted that such claims
would remain the focus of later proceedings. In its May
3, 2013 order, the court stated: ‘‘[I]t is ordered that
the issue of damages, including reimbursement and/or
overpayment of indemnity and defense costs, shall be
tried (in a third phase) . . . following the court’s ruling
on all other nonjury issues to be heard in the second
phase of the trial . . . .’’
That the court intends in Phase III to address reim-
bursement claims for defense and indemnity expendi-
tures incurred prior to March 28, 2014, is further
evidenced throughout the Phase II decision itself. At
the outset of the decision, the court emphasized that
‘‘[t]he issues as to . . . any claim of damages for recov-
ery from [Vanderbilt] for the overpayment of defense
and indemnity costs by [Continental] and other carriers,
or any claims of reimbursement between carriers, have
been reserved to later phases of the trial.’’ Later in the
opinion, the court noted that ‘‘any specific ruling as to
the exact financial obligation for defense or indemnity
costs under the individual policies issued by each car-
rier is left to Phase III of this trial as part of the calcula-
tion of damages and reimbursement of such costs. . . .
[S]uch issues [will] be fully addressed in Phase III. That
latter phase shall necessarily determine the scope of
any defense or indemnity obligations in order to deter-
mine the amounts due, if any, under any policy not
already addressed by the court in this phase.’’ (Empha-
sis added.) Even further into the decision, the court
clarified that ‘‘the claims set forth in [Continental’s]
cross claim and [American International’s] counter-
claim are matters intended to be left for a later phase
of the trial dealing with claims of reimbursement for
overpayment of indemnity/defense costs/expenses
. . . .’’62 The court likewise stated in the concluding
sentence to that decision that ‘‘[c]onsistent with the
court’s prior order . . . Phase III of this trial on the
issue of damages, including the liability for and amount
of reimbursement and/or overpayment of indemnity and
defense costs, shall commence no later than forty-five
days from the date hereof.’’ Thus, the court’s decision
undoubtedly contemplates consideration of claims of
overpayment and reimbursement for past defense and
indemnity payments during the Phase III proceeding.
Most significant is the court’s August 21, 2014 order—
issued almost five months after its Phase II decision.
In responding to a motion for reargument and reconsid-
eration filed by Continental, the court indicated that
the pending claims regarding overpayment and reim-
bursement for past defense and indemnity expenditures
would be addressed at the upcoming Phase III trial. As
the court’s order states: ‘‘The issues as to . . . any
claim of damages for recovery from [Vanderbilt] for
the overpayment of defense and indemnity costs by
[Continental] and other carriers, or any claims of reim-
bursement between carriers, were reserved to later
phases of the trial. Upon motion of the parties, the court
agreed to bifurcate Phase II of the trial so as to remove
the issues of damages and reimbursement of any over-
payment of defense and indemnity costs which the
court had directed be addressed. Those issues are to
be considered following the completion of Phase II.’’
(Emphasis added.)
Vanderbilt’s interpretation of the court’s prospecti-
vity ruling is difficult to reconcile with the court’s
repeated orders expressly deferring consideration of
the issue of overpayment and reimbursement for past
payments until the Phase III proceeding. If Vanderbilt’s
reading is correct, and the allocation methodology
adopted by the court has no application to defense and
indemnity costs incurred prior to the March 28, 2014
Phase II decision, then little remains of the reimburse-
ment and overpayment claims reserved for the Phase
III trial. The court’s August 21, 2014 order demonstrates
in convincing fashion that the court intended otherwise.
Vanderbilt’s interpretation of the court’s prospecti-
vity ruling also is in tension with the legal authorities
on which the court relied in its Phase II decision. In
the ruling at issue, the court stated that its ‘‘findings in
Phases I and II lead the court to the conclusion that
the allocation of defense and indemnity costs shall be
applied prospectively, and consistent with the princi-
ples set forth in Security . . . .’’ (Emphasis added.)
Certain principles enunciated in Security, therefore,
merit additional attention.
In Security, our Supreme Court adopted a pro rata
allocation method for adjudicating long latency loss
claims that implicate multiple insurance policies. Secu-
rity Ins. Co. of Hartford v. Lumbermens Mutual Casu-
alty Co., supra, 264 Conn. 720. Significantly, the
Supreme Court held, among other things, that the trial
court in that case ‘‘properly recognized a cause of action
for equitable contribution and reimbursement by an
insurer against its insured.’’ Id., 699. As the court
explained, ‘‘[a] cause of action for reimbursement is
cognizable to the extent required to ensure that the
insured not reap a benefit for which it has not paid and
thus be unjustly enriched. Where the insurer defends
the insured against an action that includes claims not
even potentially covered by the insurance policy, a
court will order reimbursement for the cost of
defending the uncovered claims in order to prevent the
insured from receiving a windfall. Consistent with the
pro rata method of allocation, we have concluded that
time on the risk is a reasonable means of prorating
defense costs for periods of self-insurance. Those costs
allocable to periods of self-insurance are not even
potentially covered by the insurer’s policies. . . .
Thus, the insured would be unjustly enriched were we
to conclude that there is no claim for reimbursement
for the cost expended by the insurers in defending peri-
ods of self-insurance. Accordingly, we conclude that,
where the pro rata method of apportionment applies,
there is a cause of action for reimbursement by an
insurer against its insured.’’ Id., 717–18. It is precisely
such claims that the trial court reserved for the Phase
III proceeding in the present case.
Moreover, as the Supreme Court noted, the trial court
in Security ‘‘allocated [past] defense costs to [the manu-
facturer] on a pro rata basis and ordered contribution
and reimbursement’’ to the plaintiff insurer. Id., 699. Our
Supreme Court upheld the propriety of that retroactive
application of the pro rata allocation methodology, stat-
ing in relevant part that ‘‘the trial court properly ordered
[the manufacturer] to reimburse [the plaintiff insurer]
for its pro rata share of the cost of defending the . . .
asbestos litigation’’ for certain time periods. Id., 718;
accord Continental Casualty Co. v. Indian Head
Industries, Inc., No. 15-2217, 2016 WL 7321362, *8 (6th
Cir. December 16, 2016) (pro rata allocation appropriate
for previously incurred defense costs). Security thus
instructs that a trial court employing pro rata allocation
among multiple insurance policies properly may apply
that methodology in retroactive fashion by entertaining
claims for reimbursement by insurers. The trial court’s
express reliance on Security throughout its Phase II
decision provides further evidence that the court did
not intend all of its allocation rulings to apply on a
prospective only basis.
What, then, was the court’s intention with respect to
prospectivity? We perceive at least two possibilities.
First, the court may have used the term ‘‘prospectively’’
merely in a procedural sense, to indicate that it planned
to address those matters that remained pending and
apply the new allocation rules in future phases of this
multiphase litigation. On this reading, the court’s use
of the term ‘‘prospectively’’ is synonymous with ‘‘effec-
tive or operative in future phases of these proceedings.’’
That construction comports with the express reliance
in the court’s prospectivity ruling on ‘‘the principles set
forth in Security,’’ which recognized an insurer’s right
to reimbursement for past defense and indemnification
payments. It further acknowledges the numerous
orders and rulings of the court dedicating that issue to
the future Phase III proceeding. Finally, that construc-
tion explains the court’s silence on the substance of Mt.
McKinley’s reservation of rights, as that issue involves a
question of overpayment and Mt. McKinley’s corres-
ponding right to reimbursement.
Alternatively, the court’s reference to prospective
application may have been limited to payments that
were made pursuant to the primary insurers’ 2002 settle-
ment agreement, which the court previously had deter-
mined would not be retroactively reallocated. As we
explained in part III C 1 of this opinion, in 1995, more
than one decade prior to the commencement of the
present litigation, Continental filed an action against
Hartford seeking contribution for defense and indem-
nity payments that it had made on underlying claims
involving Vanderbilt. Those parties settled that dispute
by executing the allocation agreement in 2002, an
agreement that the trial court concluded was reason-
able and enforceable. The court’s only analysis of retro-
active versus prospective application in the Phase II
decision was in that context.63 Accordingly, it is reason-
able to assume that the court’s concluding, unelabo-
rated reference to prospective application also was
intended to apply in that specific context.64 Tellingly,
the court concluded its discussion of the exhaustion
issue by noting that ‘‘the liability of any umbrella or
excess carriers above those [primary] policies are to
be determined consistently with the pro rata allocation
principles set forth in Security.’’ In so doing, the court
implicitly distinguished the allocation of obligations
among the primary insurers pursuant to the allocation
agreement—which the court refused to ‘‘compel Hart-
ford and [Continental] to retroactively reallocate’’—
from the allocation of obligations of the secondary
insurers, to which, the court determined, it would apply
the pro rata allocation methodology.
We reiterate that this is an interlocutory appeal. On
remand the court will have an opportunity to clarify
its intentions in this regard, consistent with the legal
principles discussed in part III E 2 of this opinion.
2
Whether Prospective Only Application Would Be
Permissible under Connecticut Law
In the event that we have misperceived the court’s
intentions, and it intended to apply its allocation find-
ings and rules solely to future defense and indemnity
payments, we now turn our attention to the question
whether Connecticut law would permit the court to
apply its findings and conclusions on a prospective only
basis. We conclude that such an approach would run
afoul not only of the general presumption that judicial
decisions apply retroactively but also of our law’s spe-
cific sanctioning of reservations of rights in insurance
coverage disputes.
a
Judicial Decisions Are Presumptively Retroactive
In Connecticut, ‘‘[t]he general rule is that judicial
decisions apply retroactively to pending cases . . . .’’
(Citations omitted.) Campos v. Coleman, 319 Conn. 36,
62, 123 A.3d 854 (2015); accord Harper v. Virginia
Dept. of Taxation, 509 U.S. 86, 94, 113 S. Ct. 2510, 125
L. Ed. 2d 74 (1993) (discussing ‘‘fundamental rule’’ of
retrospective operation of rulings in civil cases); Kuhn
v. Fairmont Coal Co., 215 U.S. 349, 372, 30 S. Ct. 140,
54 L. Ed. 228 (1910) (Holmes, J., dissenting) (‘‘[j]udicial
decisions have had retrospective operation for near a
thousand years’’). In light of that general rule of retroac-
tivity, our Supreme Court in the civil context has
rejected a litigant’s contention that the court ‘‘should
not make [its ruling] available to the parties in the
present case but should apply it prospectively only.’’
Campos v. Coleman, supra, 61; see also George v. Eric-
son, 250 Conn. 312, 326, 736 A.2d 889 (1999) (‘‘[w]hen
this court renders a decision, the general rule is that
the decision will apply to the parties involved in the case
in which the decision was reached’’); accord Harper
v. Virginia Dept. of Taxation, supra, 97–98 (judicial
opinion ‘‘is properly understood to have followed the
normal rule of retroactive application and must be read
to hold . . . that its rule should apply retroactively to
the litigants then before the Court’’ [internal quotation
marks omitted]); Bradley v. Richmond School Board,
416 U.S. 696, 711, 94 S. Ct. 2006, 40 L. Ed. 2d 476 (1974)
(‘‘a court is to apply the law in effect at the time it
renders its decision’’).
Our Supreme Court nonetheless has, on multiple
occasions, applied a three part test for determining
whether prospective application is appropriate. ‘‘A com-
mon-law decision will be applied nonretroactively only
if: (1) it establishes a new principle of law, either by
overruling past precedent on which litigants have relied
. . . or by deciding an issue of first impression whose
resolution was not clearly foreshadowed . . . (2) given
its prior history, purpose and effect, retrospective appli-
cation of the rule would retard its operation; and (3)
retroactive application would produce substantial ineq-
uitable results, injustice or hardship.’’ (Citation omitted;
internal quotation marks omitted.) Ostrowski v. Avery,
243 Conn. 355, 378 n.18, 703 A.2d 117 (1997); see also
Campos v. Coleman, supra, 319 Conn. 61–64; Neyland
v. Board of Education, 195 Conn. 174, 179–83, 487 A.2d
181 (1985); cf. In re Daniel N., 323 Conn. 640, 653,
A.3d (2016) (describing three part test as ‘‘the usual
test for retroactivity’’). Notably, our Supreme Court has
described this test as ‘‘an exception to [the] general
rule’’ that judicial decisions ‘‘apply retroactively to
pending cases . . . .’’ (Citations omitted; emphasis in
original.) Campos v. Coleman, supra, 62; accord Garcia
v. Pasquarell, 117 Fed. Appx. 337, 339 (5th Cir. 2004)
(‘‘retroactive application of judicial decisions is over-
whelmingly the norm, and any exceptions to this rule
that might still exist are limited to the extremely unusual
and unforeseeable case’’ [internal quotation marks
omitted]); Stonehill College v. Massachusetts Commis-
sion Against Discrimination, 441 Mass. 549, 569–70,
808 N.E.2d 205 (applying similar three part test for
exception to general rule of retroactivity and specifi-
cally considering ‘‘[p]rinciples of equity and fairness’’),
cert. denied sub nom. Wilfert Bros. Realty Co. v. Massa-
chusetts Commission Against Discrimination, 543
U.S. 979, 125 S. Ct. 481, 160 L. Ed. 2d 356 (2004).
In the present case, the Phase I and II proceedings
involved several issues of first impression whose resolu-
tion was not clearly foreshadowed, including the adop-
tion of the unavailability of insurance rule and the
continuous trigger theory of coverage, a point under-
scored by their extensive treatment in this opinion.
Thus, we may assume that the first prong of the retroac-
tivity exception test is satisfied.
Nevertheless, the trial court has not articulated any
basis on which we can conclude that the second and
third prongs of that test are satisfied. The court’s lengthy
and thorough Phase II decision contains no legal analy-
sis or explication of the court’s prospectivity ruling.
Furthermore, when asked to clarify the basis of that
ruling, the court declined to do so. In ruling on Mt.
McKinley’s motion to ‘‘reargue, reconsider and/or clar-
ify’’, the court stated simply that, in its view, no ambigu-
ity was present that necessitated clarification of its
decision.
Nor do we perceive any rationale for concluding that
retroactive application of the court’s rulings would
retard their operation or produce substantial inequita-
ble results, injustice or hardship.65 Given the multifac-
eted nature of this litigation, and the court’s consistent
reservation of ‘‘any claim of damages for recovery from
[Vanderbilt] for the overpayment of defense and indem-
nity costs by [Continental] and other carriers, or any
claims of reimbursement between carriers’’ to the Phase
III proceeding, it is difficult to fathom how application
of the allocation methodology to such claims would
impair its operation or produce inequitable results. This
is particularly true in light of the fact that parties such
as Mt. McKinley furnished a defense and indemnifica-
tion of Vanderbilt pursuant to a reservation of rights.
Thus, an exception to the general rule of retroactivity
does not appear to be warranted with respect to the
obligations of the secondary insurers and Vanderbilt.
b
Prospective Only Application Would Vitiate
Mt. McKinley’s Reservation of Rights
Mt. McKinley also contends, and we agree, that
applying the trial court’s findings and rulings on a solely
prospective basis would eviscerate the reservation of
rights that Mt. McKinley issued when it came on the
risk and began defending and indemnifying Vanderbilt.
The following additional undisputed facts and proce-
dural history are relevant to this issue.
At trial, Mt. McKinley offered documentary and testi-
monial evidence indicating that it undertook the
defense and indemnification of Vanderbilt subject to a
reservation of rights. Lillian Philburn, a claims manager
who handled Vanderbilt’s account on behalf of Mt.
McKinley, testified at the Phase II trial. Philburn con-
firmed that Mt. McKinley began ‘‘defending and indem-
nifying [Vanderbilt] with regard to underlying talc
claims’’ in late 2011, though always subject to ‘‘a com-
plete and full reservation of rights . . . .’’ As she
explained, ‘‘[w]e advised [Vanderbilt] that we will par-
ticipate in their defense and indemnity under a reserva-
tion subject to certain terms and conditions, such as
we reserve the right to reallocate any payments that
we have made, to recover any payments that we have
made. We reserve the right to confirm that there has
been bodily injury resulting in occurrence during our
policy period. We also reserved on proper allocation
of any payments that have been made in the past and
going forward.’’66 Philburn’s testimony was corrobo-
rated by Thomas Radcliffe, an attorney who served as
Vanderbilt’s national coordinating counsel for underly-
ing actions. Radcliffe confirmed in his testimony that
Mt. McKinley had agreed to defend Vanderbilt pursuant
to a reservation of rights. Consistent with this undis-
puted testimony, the trial court found that Mt. McKinley
had, in fact, proceeded subject to a reservation of rights.
‘‘A reservation of rights agreement serves to furnish
temporary protection to an insured, even though . . .
it may turn out that the insured was not entitled to
such protection.’’ (Internal quotation marks omitted.)
Signature Development Cos., Inc. v. Royal Ins. Co. of
America, 230 F.3d 1215, 1220 (10th Cir. 2000); see also
Globecon Group, LLC v. Hartford Fire Ins. Co., 434
F.3d 165, 176 (2d Cir. 2006) (unasserted defenses not
waived where insurer ‘‘repeatedly and expressly
reserved its rights in its communications’’ with insured).
Reservations of rights exist ‘‘to protect both the insurer
and the insured by allowing an insurer who is uncertain
of its obligations under the policy to undertake a
defense while reserving its rights to ultimately deny
coverage following its investigation or to file a declara-
tory judgment action to determine its obligations.’’ 14
L. Russ & T. Segalla, Couch on Insurance (Cum. Supp.
2016) § 202:38, p. 350 n.71. We share Mt. McKinley’s
concern that to apply the trial court’s findings and rul-
ings on a solely prospective basis would essentially
eviscerate its reservation of rights and, as a result, dis-
courage other insurers from defending their insureds
under reservation.67 At the very least, the fact that Mt.
McKinley defended Vanderbilt under an express reser-
vation of rights suggests that it would not be inequitable
to apply the court’s pro rata allocation rules to Vander-
bilt on a retroactive basis.
3
Guidance on Remand
In the preceding parts of this opinion, we concluded
on the basis of the record before us that prospective
only application of the trial court’s findings and alloca-
tion rulings would offend both the general presumption
in favor of retroactivity and the law’s specific prefer-
ence for reservations of rights in insurance coverage
disputes. Nevertheless, in light of the interlocutory
nature of these appeals and unique character of long-
tail toxic tort litigation, prudence dictates that we not
foreclose further consideration of these issues by the
trial court. We are particularly mindful of the trial
court’s superior vantage point as fact finder and gate-
keeper in this quintessential example of complex litiga-
tion. In this case, the trial court has made it abundantly
clear that ‘‘any specific ruling as to the exact financial
obligation for defense or indemnity costs under the
individual policies issued by each carrier is left to Phase
III of this trial as part of the calculation of damages
and reimbursement of such costs.’’ The precise nature
of those obligations, and the attendant claims of over-
payment and entitlement to reimbursement, all entail
factual determinations. Given those critical unresolved
issues of fact, we believe it would be imprudent at this
stage to foreclose the possibility that the retroactivity
exception might be implicated at a later date. Should
the trial court, therefore, become convinced that a
departure from the rule of retroactivity is warranted
with respect to the parties’ overpayment and reimburse-
ment claims, then further analysis of the latter two
prongs of that test will be appropriate. Because these
appeals are interlocutory in nature, an avenue of further
appellate review of any such determination remains
following the completion of the proceedings before the
trial court.
IV
SCOPE OF COVERAGE AND POLICY EXCLUSIONS
We next consider claims relating to three types of
clauses contained in certain of Vanderbilt’s primary
and secondary insurance policies. First, Mt. McKinley68
contends that the trial court improperly determined
that pollution exclusions in its policies do not apply so
as to bar coverage for most asbestos related disease
claims. Second, National Casualty challenges the
court’s determination that occupational disease exclu-
sions in its policies preclude coverage only for claims
brought by Vanderbilt’s own employees. Third, Vander-
bilt contends that the trial court improperly determined
that certain of Continental’s secondary insurance poli-
cies do not provide for a duty to defend when the
underlying insurance has exhausted. For the reasons
that follow, we affirm the rulings of the trial court with
respect to the pollution exclusion and duty to defend
clauses but reverse with respect to the occupational
disease exclusions.
In addition to the legal principles discussed in part
II of this opinion, the following principles govern our
resolution of these claims. The ‘‘rule of construction
favorable to the insured extends to exclusion clauses.’’
(Internal quotation marks omitted.) Travelers Ins. Co.
v. Namerow, 257 Conn. 812, 827, 778 A.2d 168 (2001),
superseded in part on other grounds, 261 Conn. 784,
807 A.2d 467 (2002). The insurer bears the burden of
proving that an exclusion clause applies. Capstone
Building Corp. v. American Motorists Ins. Co., supra,
308 Conn. 788 n.24. The insured, however, has the bur-
den of proving that an exception to an exclusion rein-
states coverage. Id.; Buell Industries, Inc. v. Greater
New York Mutual Ins. Co., 259 Conn. 527, 551, 791 A.2d
489 (2002).
A
Pollution Exclusions
We first consider the applicability of the so-called
pollution exclusion clause to claims arising from alleged
asbestos exposure. Most of Vanderbilt’s policies written
after 1970 contain a clause that excludes coverage for
bodily injury or property damage resulting from the
release of pollutants. Mt. McKinley contends that the
plain language of these exclusions unambiguously
applies to and bars coverage for the underlying claims.
Vanderbilt responds that the pollution exclusions, on
their face, apply only to ‘‘traditional’’ environmental
pollution and do not bar coverage for asbestos related
claims, most of which allege harms arising from expo-
sure to asbestos dust released in indoor environments
in the course of routine manufacturing or construction
activities. In the alternative, Vanderbilt contends that
the trial court properly concluded that the contractual
language is ambiguous with respect to alleged asbestos
related disease and that the policies should, therefore,
be construed in favor of coverage. The question whether
a pollution exclusion clause in a comprehensive general
liability policy bars coverage for claims arising from
exposure to toxic substances such as asbestos in indoor
environments and/or in the course of their intended use
is one of first impression for Connecticut’s appellate
courts. Recognizing that the question is a close one,
over which our sister courts are sharply divided, we
conclude that the pollution exclusions bar coverage
only when the exposure arises from traditional environ-
mental pollution, such as when the dumping of waste
materials containing asbestos causes asbestos fibers to
migrate onto neighboring properties or into the natu-
ral environment.
The following additional procedural history is rele-
vant to this claim. In 2010, a number of the secondary
insurers moved for summary judgment, contending that
pollution exclusion clauses contained in their Vander-
bilt policies exclude coverage for asbestos related
claims and that all of the underlying actions fall within
the scope of the exclusions. In a preliminary decision
issued in July, 2011, the trial court denied the defen-
dants’ motions, concluding that, at least with respect
to one representative underlying action, the policy lan-
guage did not unambiguously apply to claims of asbes-
tos related disease. The court affirmed this result in its
Phase II decision, concluding that the various exclu-
sions at issue were ambiguous as applied to the underly-
ing actions and, therefore, must be construed in favor
of coverage.
1
Standard Pollution Exclusion
Most of the policies at issue in this case contain
what has come to be known as the standard pollution
exclusion. The language of one typical policy69 reads:
‘‘Exclusion (Contamination or Pollution)
‘‘It is agreed that the insurance does not apply to
personal injury or property damage arising out of the
discharge, dispersal, release or escape of smoke,
vapors, soot, fumes, acids, alkalis, toxic chemicals, liq-
uids or gases, waste materials or other irritants, contam-
inants or pollutants into or upon land, the atmosphere
or any watercourse or body of water; but this exclusion
does not apply if such discharge, dispersal, release or
escape is sudden and accidental.’’
We first consider whether the trial court properly
concluded that this standard pollution exclusion does
not apply so as to bar coverage for the types of claims
typically raised in the underlying complaints. We then
consider whether a different result obtains with respect
to the nonstandard pollution exclusion clauses con-
tained in several of the defendants’ policies, which con-
tain language that differs materially from the
standard exclusion.
a
Connecticut Precedent
As an initial matter, we address the dispute between
the parties as to whether the resolution of this question
is dictated by the decision of our Supreme Court in
Heyman Associates No. 1 v. Ins. Co. of Pennsylvania,
supra, 231 Conn. 756. In Heyman, the defendant insur-
ers denied coverage to the plaintiff, on the basis of a
pollution exclusion clause, for damages caused when
a large quantity of fuel oil leaked from the plaintiff’s
property into Stamford Harbor, potentially impacting
the water, shoreline, and wildlife, and creating liability
under the Federal Water Pollution Control Act, 33 U.S.C.
§ 1251 et seq. Heyman Associates No. 1 v. Ins. Co.
of Pennsylvania, supra, 759–60. The precise question
before our Supreme Court was ‘‘whether the language
of each policy clause clearly and unambiguously defines
‘pollutant’ to include fuel oil released into a waterway
such as the Stamford Harbor.’’70 Id., 771. To answer
this question, the court began by reviewing the plain
language of each policy provision and looked to three
sources to construe its meaning: (1) dictionary defini-
tions of the ordinary meaning of ‘‘pollutant’’ and related
contract terms; id., 772; (2) statutory definitions of these
terms; id., 773; and (3) decisions from courts in other
jurisdictions that addressed the question of whether a
fuel oil spill constitutes pollution for purposes of a
pollution exclusion clause. Id., 774. Because each of
these sources indicated that a fuel oil spill into a public
waterway constitutes pollution, the Supreme Court con-
cluded that the policy language clearly and unambigu-
ously applied to bar coverage for the claims at issue.
Id., 774–76. Accordingly, the court declined to consider
extrinsic evidence, such as the drafting history of the
pollution exclusion clauses, that might vary or distort
the plain meaning of the policy language. Id. On three
separate occasions, however, the court in Heyman
emphasized that the language of the pollution exclusion
was clear and unambiguous ‘‘as applied to the facts of
[that] case.’’ (Emphasis added.) Id., 779, 781, 788; see
also Schilberg Integrated Metals Corp. v. Continental
Casualty Co., 263 Conn. 245, 276–78, 819 A.2d 773 (2003)
(Schilberg) (declining to consider parol evidence
because language of pollution exclusion was ‘‘clear and
unambiguous as applied to the present facts’’).
Vanderbilt contends, and the trial court agreed, that
the present case is factually distinguishable from Hey-
man. Whereas a large oil spill into a public waterway
in violation of federal environmental legislation repre-
sents a classic example of environmental pollution,
Vanderbilt argues, it is at best ambiguous whether the
types of harms alleged in the underlying complaints,
such as that of a woman who inhales or otherwise
ingests asbestos while washing her husband’s work
clothing, can be said to arise from the release of a
pollutant.71 See, e.g., Complaint of Alan C. Thorp, Sr.
The defendants counter that in Yale University v.
Cigna Ins. Co., 224 F. Supp. 2d 402 (D. Conn. 2002)
(Yale), the federal District Court interpreted Heyman
more broadly to mean that a pollution exclusion clause
bars coverage for any harm arising from the inhalation
of any substance that satisfies the general dictionary
definition of a ‘‘pollutant,’’ ‘‘irritant,’’ or ‘‘contaminant.’’
(Internal quotation marks omitted.) Id., 421–22. In Yale,
as in the present case, the question was whether a
pollution exclusion barred coverage for asbestos
related damage. Reasoning that ‘‘there can be little
doubt that’’ asbestos poses a health threat and that the
release of asbestos dust renders a building ‘‘ ‘unfit for
use by the introduction of unwholesome or undesirable
elements’ and/or ‘physically impure or unclean,’ ’’ the
District Court concluded that ‘‘[a] straightforward appli-
cation of Heyman . . . to the facts of this case mili-
tates against coverage for Yale’s asbestos abatement
costs.’’ Id., 422. The federal court further interpreted
Heyman as having rejected the conclusion, reached by
courts in other jurisdictions, that a pollution exclusion
clause in a comprehensive general liability policy bars
coverage only for traditional environmental pollution
such as oil spills or the dumping of hazardous waste
into the natural environment. Id., 422–23.
Yale, however, was decided prior to our Supreme
Court’s decision in Allstate Ins. Co. v. Barron, 269 Conn.
394, 848 A.2d 1165 (2004) (Barron). In Barron, the
Supreme Court concluded; id., 420–24; that poisoning
resulting from the inhalation of carbon monoxide gas
released during a residential fire did not fall under the
auspices of a pollution exclusion clause that expressly
barred coverage for bodily injury arising from the ‘‘dis-
charge, dispersal, release or escape of vapors, fumes
. . . toxic gasses . . . or other irritants, contaminants
or pollutants.’’ (Internal quotation marks omitted.) Id.,
420 n.17. That conclusion arguably was dicta in Barron;
see id., 420 n.18; and, in any event, the court reached
its conclusion on the basis of other policy provisions
that are not contained in any of the policies at issue in
the present case. See id., 422–23 (explaining that policy
expressly covered smoke damage and that reasonable
policyholder would not expect policy to cover injuries
caused by smoke but not by toxic fumes and chemicals
that can be components of smoke). Importantly, how-
ever, the court also addressed in a footnote the general
question of the scope of the pollution exclusion with
respect to toxic chemicals. See id., 421–22 n.19. In that
footnote, the Supreme Court acknowledged that courts
in other jurisdictions have concluded that toxic sub-
stances such as carbon monoxide, formaldehyde, and
lead paint are not pollutants within the meaning of a
pollution exclusion clause because (1) such clauses are
intended to exclude coverage only for environmental
damage caused by active or intentional industrial pollut-
ers, and (2) dispersal of those substances within the
confines of a building does not constitute release into
the ‘‘ ‘atmosphere,’ ’’; id., 422 n.19; as required by the
standard pollution exclusion. Id., 421–22 n.19. Having
set forth this more limited interpretation of the pollution
exclusion, our Supreme Court concluded the discussion
by expressly leaving open the question whether that
interpretation is the proper one: ‘‘[b]ecause we con-
clude that, under the specific terms of the policy at
issue in the present case, a reasonable policyholder
would believe that ‘smoke’ was expressly excepted
from the pollution exclusion clause, we need not con-
sider whether a reasonable policyholder would believe
that smoke from a house fire or carbon monoxide con-
tained in that smoke would be excluded pollutants in
the absence of such an exception.’’ Id., 422 n.19.
In light of this discussion in Barron, we agree with
the trial court that Heyman stands only for the limited
and uncontroversial proposition that a pollution exclu-
sion clause bars coverage for an oil spill in a public
waterway. See Island Associates, Inc. v. Eric Group,
Inc., 894 F. Supp. 200, 203 (W.D. Pa. 1995) (cases
applying pollution exclusion to prototypical environ-
mental pollution do not resolve whether exclusion also
applies to chemical exposure within confined work-
site). We further conclude that our Supreme Court has
left open the question whether such clauses apply only
to traditional environmental pollution, such as the
dumping of hazardous waste, or whether they apply
more broadly to circumstances such as the release of
asbestos dust and similar toxic industrial products
within a building when used as intended. Accordingly,
it falls now to us to answer this question.
We begin by looking at the plain language of the
standard pollution exclusion clause through the three
lenses used by the court in Heyman: the ordinary mean-
ing of the contract language, any technical meaning as
expressed in relevant statutes and regulations, and the
legal conclusions drawn by our sister courts upon
review of similar policy language. Only if we conclude
from this tripartite analysis that the language of the
standard pollution exclusion is ambiguous as applied
to asbestos exposure may we proceed to consider parol
evidence, such as the history and purpose of the pollu-
tion exclusion.
b
Ordinary Meaning
We first examine the ordinary meaning of the contract
terms. See Heyman Associates No. 1 v. Ins. Co. of
Pennsylvania, supra, 231 Conn. 771. As previously
noted, the defendants, in arguing for a broad interpreta-
tion of the standard pollution exclusion, rely on our
Supreme Court’s analysis of a similar pollution exclu-
sion clause in Heyman. The court’s analysis of the con-
tract language in that case was succinct, relying on the
primary definitions of two key terms in a 1986 diction-
ary: ‘‘The plain language of the absolute pollution exclu-
sion clause . . . makes clear that a liquid is an
excluded ‘pollutant’ if it may be characterized as an
‘irritant’ or ‘contaminant.’ The dictionary defines ‘con-
taminant’ as ‘something that contaminates,’ and it
defines ‘contaminate’ as ‘to soil, stain, corrupt, or infect
by contact or association’ or ‘to render unfit for use by
the introduction of unwholesome or undesirable ele-
ments.’ Webster’s Third New International Dictionary
(1986). Similarly, the dictionary defines ‘pollutant’ as
‘something that pollutes . . . a polluting substance,
medium, or agent,’ and it defines ‘pollute’ as ‘to . . .
impair the purity of . . . to make physically impure or
unclean.’ Id.
‘‘There is no question that the introduction of fuel
oil into a waterway such as Stamford Harbor ‘soils,’
‘corrupts,’ ‘infects,’ and/or ‘renders unfit for use’ the
affected water. . . . Moreover, it cannot seriously be
disputed that the introduction of fuel oil served to
‘impair the purity of’ the water in the harbor. . . . Thus,
an ordinary, lay definition of ‘pollutant’ includes fuel
oil spilled in a waterway such as Stamford Harbor.’’
Heyman Associates No. 1 v. Ins. Co. of Pennsylvania,
supra, 231 Conn. 772–73. The defendants in the present
case contend that friable asbestos dust, which is undis-
putably a toxic substance, likewise soils and renders
impure any air into which it may be released, and thus
constitutes a pollutant as defined in Heyman.
The defendants’ argument, although facially attrac-
tive, falters upon closer scrutiny. As we have explained,
the basis for the underlying claim in Heyman—a large
oil spill into a public waterway—was a classic case of
environmental pollution that fell squarely within any
reasonable definition of the policy terms ‘‘pollution’’
and ‘‘contamination.’’ Accordingly, there simply was no
need for the Supreme Court in that case to conduct a
probing analysis of the policy language. By contrast,
cases such as the present appeals, in which reasonable
minds may differ as to the applicability of the pollution
exclusion; see part IV A 1 d of this opinion; require
that we conduct a more comprehensive analysis and
consider factors and issues that fell beyond the ambit
of the Heyman decision. To understand whether the
language of the pollution exclusion unambiguously
applies to the underlying complaints, we must, for
example: (1) look to dictionary definitions from the
period when the standard pollution exclusion was ini-
tially drafted; (2) evaluate the ordinary meaning of
terms such as ‘‘pollution’’ not only in isolation but also
within the context of the full pollution exclusion clause
and related policy provisions; (3) consider not only
whether asbestos dust constitutes a pollutant, contami-
nant, or irritant, but also whether the circumstances
alleged in the underlying complaints constitute the ‘‘dis-
charge, dispersal, release or escape [of asbestos] into
or upon land, the atmosphere or any watercourse or
body of water’’; and (4) consider whether adopting the
defendants’ proposed interpretation of the policy lan-
guage would yield unreasonable or absurd results.
Accordingly, we now turn our attention to the key pol-
icy terms.
i
‘‘Pollutants’’
Following the lead of our Supreme Court in Heyman,
we begin by defining the key term ‘‘pollutant,’’ as well
as cognate terms such as ‘‘pollute’’ and ‘‘pollution.’’ It
is well established that ‘‘[t]o ascertain the commonly
approved usage of a word, it is appropriate to look to the
dictionary definition of the term.’’ (Internal quotation
marks omitted.) Buell Industries, Inc. v. Greater New
York Mutual Ins. Co., supra, 259 Conn. 539. Further-
more, because we seek to discern the intent of the
parties at the time the policies were drafted, we refer
to dictionaries in print at that time. Id.; see also State
v. Menditto, 315 Conn. 861, 866, 110 A.3d 410 (2015).
Although it was not unreasonable for the court in Hey-
man, in construing insurance policies issued in 1989;
see Heyman Associates No. 1 v. Ins. Co. of Pennsylva-
nia, supra, 231 Conn. 760 n.3; to rely on dictionary
definitions from 1986, in the present case we must look
to dictionaries published fifteen years prior. It was,
after all, in 1970 that the standard pollution exclusion
was initially drafted,72 and policies issued in the present
case began to incorporate that language as early as 1971.
Although it is true that the most generic definition
of ‘‘pollute’’ is simply ‘‘to make impure or unclean,’’
dictionaries published during the late 1960s and early
1970s—the period during which Congress enacted sev-
eral of the landmark federal environmental statutes—
invariably offered an example, parenthetical, or second-
ary definition that called to mind what has come to be
thought of as traditional environmental pollution, such
as the knowing release of exhaust or hazardous waste
into public air, water, or soil resources. The following
represents a sampling of such definitions:73
• pollutant: ‘‘something that pollutes; a polluting sub-
stance, medium, or agent ’’ Webster’s Third New International Dic-
tionary of the English Language Unabridged
(1971).
• pollute: ‘‘1: to render ceremonially or morally
impure . . . 2: to make physically impure or
unclean: befoul, dirty, taint ’’ Id.
• polluted: ‘‘1: made unclean or impure: morally cor-
rupt or defiled: physically tainted ’’ Id.
• pollution: ‘‘2: the action of polluting or the state of
being polluted: defilement, desecration, impurity,
uncleanness ’’ Id.
• pollutant: ‘‘that which pollutes: Rivers are full of
banks.’’ Random House Dictionary of the English
Language (1966).
• pollute: ‘‘1. to make foul or unclean; dirty: to pollute
the air with smoke.’’ Id.
• pollutant: ‘‘Anything that pollutes; especially, any
gaseous, chemical, or organic waste that contami-
nates air, soil, or water.’’ American Heritage Dic-
tionary of the English Language (1969).
• pollution: ‘‘1. The act or process of polluting or the
state of being polluted. 2. The contamination of
soil, water, or the atmosphere by the discharge of
noxious substances.’’ Id.
• ‘‘pollute: Destroy the purity or sanctity of; make
foul or filthy; contaminate or defile (man’s environ-
ment) . . . .’’ Concise Oxford Dictionary (6th
Ed. 1976).
In addition, the Oxford English Dictionary provides
the following examples of typical usages from that
time period:
• ‘‘1970 . . . Mercury is now the most dangerous
environmental pollutant.’’ 12 Oxford English Dic-
tionary (2d Ed. 1991).
• ‘‘1966 . . . The absence of sulphur ensures that
the products of combustion are non-corrosive
[and] do not pollute the atmosphere.’’ Id.
• ‘‘1969 . . . The danger of ‘thermal pollution’ is
greatest where electric and other power plants
return to rivers and streams water that has been
heated by between six and 16 degrees Centigrade.
This often proves deadly to fish.’’ Id.
• ‘‘1970 . . . At American universities, pollution has
been a student rallying cry for some months
now.’’ Id.
It is clear, then, that at that time in our nation’s history
the principal connotation of the terms ‘‘pollutant’’ and
‘‘pollution’’ was with reference to contamination of the
natural environment by industrial and other hazardous
wastes. Accordingly, we conclude, consistent with the
decisions of a number of our sister courts,74 that it is
at best ambiguous whether the use of these terms in
the standard pollution exclusion clause was intended
and would reasonably have been understood to extend
beyond those contexts, to scenarios such as the inhala-
tion or ingestion of asbestos dust released in small
quantities in an indoor environment during everyday
activities such as manufacturing, laundering, or
remodeling.
ii
Other ‘‘Irritants’’ and ‘‘Contaminants’’
Nor are we persuaded that asbestos unambiguously
qualifies as ‘‘smoke, vapors, soot, fumes, acids, alkalis,
toxic chemicals, liquids or gases, waste materials or
other irritants [or] contaminants’’ in the context of the
exclusion language to be applied to the allegations of
the underlying complaints. Once again, on the most
general level there is little doubt that asbestos is a toxic
substance that may irritate the lungs and the ingestion
of which can be said to contaminate the human body.75
To that extent, it plainly falls under the policy language.
On the other hand, a strong argument can be made that
this list is merely intended to provide examples of the
sorts of substances that constitute ‘‘pollutants’’ and,
therefore, that our previous determination that asbestos
is not unambiguously a pollutant when applied to the
allegations of the underlying complaints is dispositive.
We begin by recognizing that, in construing the lan-
guage of a contract, ‘‘[m]eaning is inevitably dependent
on context. A word changes meaning when it becomes
part of a sentence, the sentence when it becomes part
of a paragraph.’’ 2 Restatement (Second), Contracts
§ 202, comment (d), p. 88 (1981); see also MacKinnon
v. Truck Ins. Exchange, 31 Cal. 4th 635, 649, 73 P.3d
1205, 3 Cal. Rptr. 3d 228 (2003) (courts that construe
pollution exclusion as unambiguous commit fallacy of
examining key policy terms in isolation, divorced from
context); 17A Am. Jur. 2d 362–63, Contracts § 375 (2004)
(‘‘A contract must be construed as a whole, and the
intention of the parties is to be ascertained from the
entire instrument. The contract’s meaning must be gath-
ered from the entire context and not from particular
words, phrases, or clauses, or from detached or isolated
portions of the contract.’’). In particular we recognize
that, ‘‘[when] a provision contains two or more words
grouped together, we often examine a particular word’s
relationship to the associated words and phrases to
determine its meaning pursuant to the canon of con-
struction noscitur a sociis [a word is known by the
company it keeps].’’ Cantonbury Heights Condomin-
ium Assn., Inc. v. Local Land Development, LLC, 273
Conn. 724, 740, 873 A.2d 898 (2005); see also Smedley
Co. v. Employers Mutual Liability Ins. Co. of Wiscon-
sin, 143 Conn. 510, 514–15, 123 A.2d 755 (1956) (finding
ambiguity upon applying noscitur a sociis canon to
insurance policy exclusion).
In the present case, when we consider the language
of the standard pollution exclusion as a whole, and in
the context of neighboring policy provisions, there are
at least five reasons to believe that the parties did not
intend to exclude coverage for harms inflicted by all
toxic chemicals, irritants, and contaminants in the most
broadly literal sense of those words. First, as several
of our sister courts have recognized, the various sub-
stances enumerated in the exclusion, ‘‘smoke, vapor,
soot, fumes, acids, alkalis, chemicals, and waste—are
either products used to operate equipment or machin-
ery or byproducts of the operation of equipment or
machinery.’’ Lefrak Organization, Inc. v. Chubb Cus-
tom Ins. Co., 942 F. Supp. 949, 956 (S.D.N.Y. 1996). One
plausible interpretation of the policy language, then, is
that it was intended to exclude only those harms and
injuries resulting from the dross of industrial produc-
tion. See, e.g., Westchester Fire Ins. Co. v. Pittsburg,
768 F. Supp. 1463, 1470 (D. Kan. 1991) (‘‘[t]he terms
‘irritant’ and ‘contaminant,’ however, cannot be read in
isolation, but must be construed as substances gener-
ally recognized as polluting the environment’’).
Second, we note that most of the standard pollution
exclusion clauses at issue in the present case have titles
such as ‘‘seepage & pollution endorsement clause’’ or
‘‘pollution and contamination exclusion.’’ The fact that
the term ‘‘pollution’’ appears in the title of each exclu-
sion clause and that the parties—consistent with indus-
try practice—refer to such clauses as ‘‘pollution
exclusions’’ suggests that pollution represents the pri-
mary concern of these provisions.76 See Connecticut
Ins. Guaranty Assn. v. Drown, supra, 314 Conn. 204
(McDonald, J., dissenting) (title of insurance provision
illuminates meaning).77
Third, in a number of the relevant policies, the stan-
dard pollution exclusion language previously cited is
merely the first paragraph of a two paragraph ‘‘contami-
nation or pollution’’ or ‘‘seepage & pollution’’ exclusion.
The second paragraph of one of those exclusions reads:
‘‘It is further agreed that, if with respect to operations
described in this endorsement there is a discharge, dis-
persal, release or escape of oil or other petroleum sub-
stance or derivative (including any oil refuse or oil
mixed with wastes) into or upon any watercourse or
body of water, the insurance does not apply to bodily
injury or property damage arising out of such discharge,
dispersal, release or escape whether or not sudden and
accidental.’’ In other words, whereas the first paragraph
of the standard exclusion provides that sudden and
accidental releases of pollutants into the air, water, or
land are covered under the policy, this second para-
graph carves out an additional exclusion for waterborne
oil spills, even accidental incidents of which are
exempted from coverage. Pursuant to the noscitur a
sociis canon of construction, the fact that the second
paragraph of the exclusion is addressed specifically to
oil spills is further indication that the standard exclu-
sion is directed toward traditional types of environmen-
tal contamination, rather than to routine exposure to
potentially harmful building materials such as asbestos.
Fourth, in many of the policies at issue in these
appeals, the pollution exclusion immediately precedes
or follows other exclusions directed toward other types
of environmental harms. For example, the pollution
exclusion clause in the Fireman’s 1976 policy directly
follows a ‘‘Nuclear Energy Liability Exclusion Endorse-
ment’’ that bars coverage for personal injuries and
destruction caused by the hazardous properties of
nuclear materials contained in spent fuel or waste. Simi-
larly, the pollution exclusion clause in a 1978 policy
issued by the Puritan Insurance Company, the predeces-
sor of Westport, immediately precedes a clause exclud-
ing coverage for property damage arising from the
subsidence of land, while the Lloyd’s policies from the
1970s place the pollution exclusion on the same policy
page as a ‘‘Radioactive Contamination Exclusion
Clause.’’ Once again, the noscitur a sociis canon of
construction suggests that the scope of the pollution
exclusion may be limited to these sorts of federally
regulated environmental dangers.
Fifth, we agree with those courts that have concluded
that a literal interpretation of the list of substances in
the standard pollution exclusion language would render
the clause so broad as to be meaningless, and would
lead to irrational and absurd consequences. Many
courts reaching this conclusion cite to the following
analysis from the United States Court of Appeals for the
Seventh Circuit: ‘‘The terms irritant and contaminant,
when viewed in isolation, are virtually boundless, for
there is virtually no substance or chemical in existence
that would not irritate or damage some person or prop-
erty. . . . Without some limiting principle, the pollu-
tion exclusion clause would extend far beyond its
intended scope, and lead to some absurd results. To
take but two simple examples, reading the clause
broadly would bar coverage for bodily injuries suffered
by one who slips and falls on the spilled contents of a
bottle of Drano, and for bodily injury caused by an
allergic reaction to chlorine [splashed from] a public
pool. Although Drano and chlorine are both irritants
or contaminants that cause, under certain conditions,
bodily injury or property damage, one would not ordi-
narily characterize these events as pollution.’’ (Citation
omitted; internal quotation marks omitted.) Pipefitters
Welfare Educational Fund v. Westchester Fire Ins. Co.,
976 F.2d 1037, 1043 (7th Cir. 1992).
We need not resort to hypotheticals, however, to
recognize the absurd consequences that would result
from a broadly literal reading of the pollution exclusion.
In fact, a number of our sister courts have confronted
exactly the sort of scenario envisioned by the Seventh
Circuit. In Regent Ins. Co. v. Holmes, 835 F. Supp. 579
(D. Kan. 1993), for example, the insurer sought to deny
coverage pursuant to a pollution exclusion when a three
year old girl accidentally spilled a bottle of the policy-
holder’s carpet-testing acid, resulting in burns to her leg.
Id., 580. Notwithstanding that the provision in question
barred coverage for bodily injuries arising out of the
release of any pollutant, defined to include irritants
and acids, the court held the exclusion inapplicable,
reasoning that the policy language in question reason-
ably could be construed to apply only to releases of
toxic chemicals into the natural environment. Id., 581–
82. Similarly, in Mellin v. Northern Security Ins. Co.,
167 N.H. 544, 115 A.3d 799 (2015), the Supreme Court
of New Hampshire declined to apply a pollution exclu-
sion to damage resulting from the migration of cat urine
odor in the air between two condominiums, despite the
fact that such damage was encompassed under a literal
reading of the policy language. ‘‘Applying these defini-
tions in a purely literal interpretation . . . surely
stretch[es] the intended meaning of the policy exclu-
sion,’’ the court reasoned, ‘‘and could lead to absurd
results contrary to any reasonable policyholder’s expec-
tations . . . .’’ (Citation omitted; internal quotation
marks omitted.) Id., 552; see also MacKinnon v. Truck
Ins. Exchange, supra, 31 Cal. 4th 648, 650–56 (exclusion
did not bar coverage for death of tenant exposed to
pesticides sprayed to eradicate yellow jackets at her
apartment building because few individuals would con-
sider such injuries to arise from ‘‘pollution,’’ and literal
interpretation of policy language would lead to absurd
and overbroad results).
The fact that the standard pollution exclusion bars
coverage for damage and injuries resulting from the
release or dispersal of both ‘‘acids’’ and ‘‘alkalis’’ is
especially noteworthy in this respect, and strongly
counsels against a strictly literal interpretation of the
enumerated terms. We may take judicial notice of the
scientific fact that most liquid solutions are either acidic
or alkaline (base) to some extent. Accordingly, if read
literally, the pollution exclusion would bar coverage for
harms resulting from virtually any liquid spill. Moreover,
the fact that pure water is pH neutral, and hence neither
acidic nor basic, points to additional absurd results that
would flow from a literal reading of the exclusion. For
instance, the policy would provide coverage for burns
caused by the release of aqueous steam from a pipe,
but not burns caused if the same pipe contained chlo-
rine gas (an acid) or ammonia gas (an alkali). Although
the parties were certainly free to draft such a policy,
one is hard-pressed to envision a plausible rationale for
drawing such a distinction. See Suffield Development
Associates Ltd. Partnership v. National Loan Invest-
ors, L.P., 97 Conn. App. 541, 560, 905 A.2d 1214 (court
should avoid reading contract so as to render it illogi-
cal), cert. denied, 280 Conn. 942, 943, 912 A.2d 479
(2006); South End Plaza Assn., Inc. v. Cote, 52 Conn.
App. 374, 378, 727 A.2d 231 (1999) (‘‘[i]n giving meaning
to the language of a contract, we presume that the
parties did not intend to create an absurd result’’ [inter-
nal quotation marks omitted]). For all of these reasons,
we conclude that it is at best ambiguous whether asbes-
tos dust is an irritant, contaminant, or other pollutant
as defined in the standard pollution exclusion.
iii
‘‘Discharge . . . [I]nto or [U]pon [L]and, the
Atmosphere or [A]ny [W]atercourse’’
As the Supreme Court of Illinois has recognized, the
standard pollution exclusion applies only when three
elements are satisfied. ‘‘To exclude coverage pursuant
to the pollution exclusion, the alleged property damage
must arise out of (1) some form of discharge or release
(2) of a contaminant or pollutant and (3) into or upon
land, the atmosphere or any water course or body of
water.’’ United States Fidelity & Guaranty Co. v. Wil-
kin Insulation Co., 144 Ill. 2d 64, 79, 578 N.E.2d 926
(1991). Even if we were to assume that friable asbestos
dust unambiguously qualifies as an irritant, contami-
nant, or pollutant, as defined in the standard pollution
exclusion, the question would remain whether the inad-
vertent dissemination of small quantities of the sub-
stance inside a building in the course of routine
activities such as manufacturing, remodeling, or laun-
dering constitutes ‘‘the discharge, dispersal, release or
escape of . . . [asbestos] into or upon land, the atmo-
sphere or any watercourse or body of water . . . .’’78
Several of our sister courts, while concluding (or assum-
ing for the sake of argument) that toxic chemicals such
as asbestos do qualify as pollutants or irritants for pur-
poses of the exclusion, nevertheless have found the
exclusion language to be ambiguous or not to be impli-
cated with respect to the first and third elements of
the exclusion. See, e.g., Island Associates, Inc. v. Eric
Group, Inc., supra, 894 F. Supp. 203–204; Porterfield v.
Audubon Indemnity Co., 856 So. 2d 789, 800 (Ala. 2002);
Essex Ins. Co. v. Avondale Mills, Inc., 639 So. 2d 1339,
1341 (Ala. 1994); United States Fidelity & Guaranty
Co. v. Wilkin Insulation Co., supra, 79; Board of Regents
v. Royal Ins. Co. of America, 517 N.W.2d 888, 892–94
(Minn. 1994); Belt Painting Corp. v. TIG Ins. Co., 100
N.Y.2d 377, 384, 795 N.E.2d 15, 763 N.Y.S.2d 790 (2003);
Continental Casualty Co. v. Rapid-American Corp.,
80 N.Y.2d 640, 653–54, 609 N.E.2d 506, 593 N.Y.S.2d
966 (1993).79
Although a few published opinions have questioned
whether the migration of a toxic substance over the
distance of a few feet prior to inhalation constitutes
‘‘discharge, dispersal, release or escape’’ as those terms
are ordinarily used,80 the primary focus of attention has
been on whether the air inside a confined space such
as a building—the setting for much alleged asbestos
exposure—qualifies as ‘‘the atmosphere.’’ Once again,
we consider the policy terms both individually and
when read as a whole.
We understand the underlying actions primarily to
allege that personal injuries occurred when asbestos
dust became airborne, creating a risk that it would be
inhaled or otherwise ingested by individuals working
with or otherwise exposed to the substance. Accord-
ingly, the parties appear to agree that the issue is
whether such exposure arises from a release into ‘‘the
atmosphere . . . .’’ Looking again to dictionaries in
print at about the time the standard pollution exclusion
was drafted, two meanings of the term ‘‘atmosphere’’
predominate. The following definition is typical: ‘‘atmo-
sphere: 1. The gaseous mass or envelope surrounding
a celestial body, especially that surrounding the earth,
and retained by the body’s gravitational field. 2. The
atmosphere or climate in a specific place.’’ American
Heritage Dictionary of the English Language, supra.
Because the term ‘‘atmosphere’’ reasonably can refer
either to the interior air at a particular location or to
the earth’s natural atmosphere, we conclude that the
third element of the pollution exclusion also is ambigu-
ous as applied to the underlying claims. See Continental
Casualty Co. v. Rapid-American Corp., supra, 80
N.Y.2d 653–54.
We further note that this ambiguity is largely
resolved, in favor of Vanderbilt, when we consider the
term ‘‘atmosphere’’ in the context of the phrase in which
it appears: ‘‘into or upon land, the atmosphere or any
watercourse or body of water.’’ United States Fidel-
ity & Guaranty Co. v. Wilkin Insulation Co., supra,
144 Ill. 2d 79; see Essex Ins. Co. v. Avondale Mills, Inc.,
supra, 639 So. 2d 1341–42. There are several reasons to
think that the term atmosphere, as used in that phrase, is
not intended to be synonymous with the air in a particu-
lar place. On the one hand, if the terms ‘‘land,’’ ‘‘atmo-
sphere,’’ and ‘‘water’’ are construed broadly, then the
third element of the pollution exclusion becomes super-
fluous; any dispersal of a toxic chemical will, broadly
speaking, be into the air, land, or water. It is well estab-
lished, however, that ‘‘the law of contract interpretation
. . . militates against interpreting a contract in a way
that renders a provision superfluous.’’ (Internal quota-
tion marks omitted.) Ramirez v. Health Net of the
Northeast, Inc., 285 Conn. 1, 14, 938 A.2d 576 (2008).
On the other hand, if those terms are construed more
narrowly, then we are confronted with a conundrum.
Why would the contracting parties have chosen to
exclude coverage for harms arising from the release of
asbestos into all manner of outdoor environments—
lawns, fields, rivers, lakes, and the air—and also into
the air within a building, but not for claims arising,
say, from the direct release of that same asbestos onto
a table or floor, swimming pool, article of clothing,
or other item of realty or personal property? As we
previously have discussed, although the parties are free
to adopt such a policy, we should avoid construing
the contract language in a manner that has no rational
explanation, especially when a more reasonable inter-
pretation is readily available.
Here, as one court has explained, the interpretation
that makes the most sense is that ‘‘the exclusion is
worded broadly to encompass the natural resources of
this planet in their natural setting, namely, land, the
atmosphere, and bodies of water. . . . Significantly,
the pollution exclusion does not use the generic term
‘water’ but rather the phrase ‘any watercourse or body
of water,’ a description indicative of water in streams,
ponds or lakes. The use of the term ‘land,’ instead of
‘property,’ whether real or personal, likewise appears
directed at land as a natural resource. And, within this
context, the term ‘atmosphere,’ we think, refers to the
ambient air. We are not saying here that air inside a
building differs from the air outside, or that the inside
and outside air do not intermingle. Rather, within the
context of the pollution exclusion, the distinction is not
in the air itself but where the air happens to be. When
the air supply within a building becomes contaminated,
it is harmful to the controlled environment of that build-
ing; but the contamination of the air in a building is
not harmful to the surrounding natural environment, at
least not until it escapes into that environment so as
to cause personal injury or property damage . . . .’’
Board of Regents v. Royal Ins. Co. of America, supra,
517 N.W.2d 892–93; see also Essex Ins. Co. v. Avondale
Mills, Inc., supra, 639 So. 2d 1342 (phrase ‘‘suggest[s]
contamination of a broad natural environment rather
than the environs of a building’’).
We agree with those decisions and conclude that a
reasonable insured would not expect such claims to be
barred by the standard pollution exclusion. At best it
is ambiguous whether the underlying allegations of
asbestos exposure can reasonably be said to arise from
release of asbestos dust ‘‘into or upon land, the atmo-
sphere or any watercourse or body of water . . . .’’
c
Environmental Terms of Art
Having reviewed the plain language of the pollution
exclusion, we agree with Vanderbilt that (1) the most
reasonable interpretation of the contract language, read
in context and taken as a whole, is that the plain mean-
ing of the exclusion does not bar coverage for the under-
lying claims, and (2) at the very least, it is ambiguous
whether asbestos dust constitutes an irritant, contami-
nant, or pollutant as defined in the policies at issue,
and also whether its release as alleged in the underlying
complaints is into the ‘‘atmosphere.’’ In this part of the
opinion, we consider an additional source of support
for these conclusions, namely, the determination by a
number of our sister courts that the language of the
pollution exclusion is intended to be understood not
according to its ordinary, lay meaning but, instead, as
technical language comprised of environmental terms
of art.
In Heyman, our Supreme Court indicated that, in
determining whether the language of an insurance
exclusion is facially ambiguous, it is appropriate to con-
sider not only the use of key terms in everyday parlance,
but also whether those terms are components of and
defined by a statutory or regulatory regime. See Hey-
man Associates No. 1 v. Ins. Co. of Pennsylvania,
supra, 231 Conn. 773. In considering the question pre-
sented by the present appeals, many of our sister courts
have concluded that the distinct phrasing of the stan-
dard pollution exclusion mirrors the language used in
federal and state environmental legislation and regula-
tion, and, therefore, that the exclusion should be con-
strued as applicable only in that context. See, e.g.,
Porterfield v. Audubon Indemnity Co., supra, 856 So.
2d 795–804 (discussing authorities holding that ‘‘terms
discharge, dispersal, release, and escape [are] terms of
art in environmental law which generally are used with
reference to damage or injury caused by improper dis-
posal or containment of hazardous waste’’ [internal quo-
tation marks omitted]); MacKinnon v. Truck Ins.
Exchange, supra, 31 Cal. 4th 646, 651–53 (collecting
authorities and concluding that language of dispersal,
when used in conjunction with term ‘‘pollutant,’’ typi-
cally references environmental pollution); Richardson
v. Nationwide Mutual Ins. Co., 826 A.2d 310, 324–29
(D.C. 2003) (noting that pollution exclusion is ‘‘replete
with language used in environmental statutes and regu-
lations’’ and finding ‘‘considerable support in reason
and authority’’ for view that exclusion contains terms
of art in environmental law), vacated pursuant to settle-
ment, 844 A.2d 344 (D.C. 2004); Motorists Mutual Ins.
Co. v. RSJ, Inc., 926 S.W.2d 679, 681 (Ky. App. 1996)
(‘‘drafters’ utilization of environmental law terms of
art . . . reflects the exclusion’s historical objective—
avoidance of liability for environmental catastrophes
related to intentional industrial pollution’’); Belt Paint-
ing Corp. v. TIG Ins. Co., supra, 100 N.Y.2d 387 (‘‘terms
used in the exclusion to describe the method of pollu-
tion . . . are terms of art in environmental law’’ [inter-
nal quotation marks omitted]); West American Ins. Co.
v. Tufco Flooring East, Inc., 104 N.C. App. 312, 325–26,
409 S.E.2d 692 (1991) (key terms of exclusion are
defined by federal environmental statutes), overruled
in part on other grounds by Gaston County Dyeing
Machine Co. v. Northfield Ins. Co., 351 N.C. 293, 303,
524 S.E.2d 558 (2000).
The following represents a brief sampling of the myr-
iad instances in which key language in the standard
pollution exclusion is defined or used in federal and
state environmental statutes and regulations, as well
as in technical dictionaries:81
• ‘‘The term ‘pollutant or contaminant’ shall include,
but not be limited to, any element, substance, com-
pound, or mixture, including disease-causing
agents, which after release into the environment
and upon exposure, ingestion, inhalation, or assim-
ilation into any organism, either directly from the
environment or indirectly by ingestion through
food chains, will or may reasonably be anticipated
to cause death, disease, behavioral abnormalities,
cancer, genetic mutation, physiological malfunc-
tions (including malfunctions in reproduction) or
physical deformations, in such organisms or their
offspring; except that the term ‘pollutant or con-
taminant’ shall not include petroleum . . . .’’ 42
U.S.C. § 9601 (33).
• ‘‘The term ‘release’ means any spilling, leaking,
pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping, or dispos-
ing into the environment (including the abandon-
ment or discarding of barrels, containers, and other
closed receptacles containing any hazardous sub-
stance or pollutant or contaminant) . . . .’’ 42
U.S.C. § 9601 (22).
• ‘‘Discharge when used without qualification means
the ‘discharge of a pollutant.’ Discharge of a pollut-
ant means: (a) Any addition of any ‘pollutant’ or
combination of pollutants to ‘waters of the United
States’ from any ‘point source,’ or (b) Any addition
of any pollutant or combination of pollutants to
the waters of the ‘contiguous zone’ or the ocean
. . . .’’ (Emphasis omitted.) 40 C.F.R. § 122.2.
• ‘‘ ‘Air pollution’ means the presence in the ambient
air of one or more air pollutants or any combination
thereof in such quantities and of such characteris-
tics and duration as to be, or likely to be, injurious
to public welfare or the environment, to the health
of human, plant or animal life, or to property, or
as unreasonably to interfere with the enjoyment
of life and property.’’ Regs., Conn. State Agencies
§ 22a-174-1 (6). ‘‘ ‘Ambient air’ means that portion
of the atmosphere, external to buildings, to which
the general public has access.’’ Regs., Conn. State
Agencies § 22a-174-1 (9).
• ‘‘ ‘Emission’ means the release or discharge of an
air pollutant into the ambient air from any source.’’
Regs., Conn. State Agencies § 22a-174-1 (38).
• ‘‘ ‘Release’ means any discharge, as defined in 40
[C.F.R. §] 260.10, or any migration of substances
from a waste or combination of wastes into the
environment.’’ Regs., Conn. State Agencies § 22a-
449 (c)-100 (c) (25).
• ‘‘ ‘Discharge’ means the emission of any water, sub-
stance or material into waters of the state whether
or not such substance causes pollution . . . .’’
General Statutes § 22a-38 (10).
• ‘‘ ‘Watercourses’ means rivers, streams, brooks,
waterways, lakes, ponds, marshes, swamps, bogs
and all other bodies of water, natural or artificial,
vernal or intermittent, public or private, which are
contained within, flow through or border upon this
state or any portion thereof . . . .’’ General Stat-
utes § 22a-38 (16).
• ‘‘Contaminant: In the natural environmental con-
text, a substance introduced into a natural ecosys-
tem by human agency. It may change the system
in some way but, unlike a pollutant, a contaminant
does not necessarily impair or harm organisms.’’
Encyclopaedic Dictionary of Environmental
Change (2003) p. 119.
• ‘‘Pollutant: A substance introduced into a natural
system by human agency and which impairs the
system or harms organisms. A contaminant
becomes a pollutant when there is damage or
adverse effects.’’ (Emphasis in original.) Id., p. 496.
• ‘‘Dispersal: The breaking up, spreading out, or dis-
tribution of some material released from a concen-
trated source to a more diffuse distribution within
the environment.’’ Facts on File Dictionary of Envi-
ronmental Science (3d Ed. 2007) p. 125.
• ‘‘Release: A spill, leak, escape, or loss of a regulated
chemical agent into the environment, including air,
water, or land.’’ Id., p. 355.
Particularly noteworthy is the fact that a New York
statute enacted in 1971, the same year that the exclusion
began to appear in the policies at issue in these appeals,
contains language almost identical to that of the exclu-
sion. Chapter 765 of the 1971 edition of McKinney’s
Session Laws of New York, was entitled, ‘‘An Act to
amend the insurance law, in relation to prohibiting cov-
erage against environmental pollution.’’ (Emphasis
added.) It provided in relevant part: ‘‘Policies issued to
commercial or industrial enterprises providing insur-
ance against the legal liabilities specified in this subdivi-
sion shall expressly exclude therefrom liability arising
out of pollution or contamination caused by the dis-
charge, dispersal, release or escape of any pollutants,
irritants or contaminants into or upon land, the atmo-
sphere or any water course or body of water unless
such discharge, dispersal, release or escape is sudden
and accidental.’’ (Emphasis added.) 1971 McKinney’s
Session Laws of New York, c. 765, § 1 (13). The accom-
panying memorandum of the state executive depart-
ment explained that the purpose of the act was to
‘‘prohibit commercial or industrial enterprises from
buying insurance to protect themselves against liabili-
ties arising out of their pollution of the environment.’’
Memorandum of State Executive Department, 1971
McKinney’s Session Laws of New York, c. 765, p. 2485.
In his signing statement, Governor Nelson A. Rockefel-
ler further explained that the act was part of his environ-
mental program and was intended to supplement the
state’s ‘‘stringent standards to prohibit despoiling our
environment through the discharge of noxious sub-
stances into the water and air.’’ Signing Statement of
Governor Nelson A. Rockefeller, June 25, 1971, 1971
McKinney’s Session Laws of New York, c. 765, p. 2633.
He elaborated that ‘‘[m]any insurance companies have
voluntarily initiated action to protect the environment
by refusing to insure against liability arising out of envi-
ronmental pollution,’’ and that the new law would fur-
ther that purpose by ensuring that the availability of
pollution insurance did not undermine this public pol-
icy. Id.
Similarly, 49 C.F.R. § 387, a 1981 federal regulation
mandating that transporters of ‘‘hazardous materials,
hazardous substances, or hazardous wastes’’; 49 C.F.R.
§ 387.3 (b); be able to demonstrate sufficient financial
responsibility for the environmental consequences of
any accidents resulting from their negligent operation,
provides that ‘‘[e]nvironmental restoration means resti-
tution for the loss, damage, or destruction of natural
resources arising out of the accidental discharge, dis-
persal, release or escape into or upon the land, atmo-
sphere, watercourse, or body of water of any
commodity transported by a motor carrier. . . .’’
(Emphasis added.) 49 C.F.R. § 387.5.
These authorities lend strong support to Vanderbilt’s
argument that the policy language, when read as a
whole, is intended to exclude coverage only for tradi-
tional environmental pollution, such as the intentional
disposal or negligent release of industrial and other
hazardous waste into the public air, land, or water
resources. As the District of Columbia Court of Appeals
concluded after reviewing the relevant authorities, ‘‘the
similarity between the language of the pollution exclu-
sion and the terminology of environmental statutes,
regulations, and judicial decisions is sufficiently strik-
ing to render a coincidence improbable.’’ Richardson
v. Nationwide Mutual Ins. Co., supra, 826 A.2d 328.
d
Decisions in Other Jurisdictions
Following the guidance of our Supreme Court in Hey-
man, we next consider how courts in other jurisdictions
have interpreted the pollution exclusion. Although the
question is one of first impression for Connecticut’s
appellate courts, dozens of other jurisdictions have con-
fronted the issue of whether a pollution exclusion
clause—in most instances the standard one82—bars cov-
erage for claims arising from exposure to toxic sub-
stances that are (1) released indoors or in a confined
space, (2) encountered when used as intended in the
ordinary course of business, and/or (3) otherwise
alleged to have caused harms not associated with tradi-
tional environmental pollution. Generalizing about the
decisions of those courts is complicated by the fact
that policy language varies from case to case and the
underlying complaints are highly fact specific. Never-
theless, it safely can be said that our sister courts are
sharply divided on this question and that no clear con-
sensus has emerged.83 As one court has explained,
‘‘[o]ur review and analysis of the entire body of existing
precedent reveals that there exists not just a split of
authority, but an absolute fragmentation of authority.
Cases may be found for and against every issue any
litigant has ever raised, and often the cases reaching
the same conclusion as to a particular issue do so on
the basis of differing, and sometimes inconsistent, ratio-
nales.’’ Porterfield v. Audubon Indemnity Co., supra,
856 So. 2d 800; see also Nationwide Mutual Ins. Co. v.
Richardson, 270 F.3d 948, 954 (D.C. Cir. 2001) (‘‘[c]ourts
across the nation are hopelessly divided’’); Bituminous
Casualty Corp. v. Sand Livestock Systems, Inc., 728
N.W.2d 216, 220 (Iowa 2007) (recognizing ‘‘ ‘a dizzying
array of results’ ’’).
Our own research bears out these conclusions. The
relatively small number of state appellate courts and
federal district courts to have considered the pollution
exclusion with reference to asbestos contamination in
particular are more or less evenly divided. Compare
Great Northern Ins. Co. v. Benjamin Franklin Federal
Savings & Loan Assn., 793 F. Supp. 259 (D. Or. 1990),
aff’d, Docket No. 90-35654, 1992 WL 16749 (9th Cir.
January 31, 1992) (decision without published opinion,
953 F.2d 1387 [9th Cir. 1992]), American States Ins.
Co. v. Zippro Construction Co., 216 Ga. App. 499, 455
S.E.2d 133 (1995), petition for cert. dismissed sub nom.
Conley v. American States Ins. Co., 1995 Ga. LEXIS
598 (Ga. May 15, 1995), Cincinnati Ins. Co. v. German
St. Vincent Orphan Assn., Inc., 54 S.W.3d 661 (Mo. App.
2001), and Selm v. American States Ins. Co., Docket No.
C-010057, 2001 WL 1103509 (Ohio App. September 21,
2001) (exclusion applies to release of asbestos con-
taining material), with In re Asbestos Products Liability
Litigation (VI), Docket No. Civ. A. 96-968, 1997 WL
539916 (E.D. La. September 2, 1997), Essex Ins. Co. v.
Avondale Mills, Inc., supra, 639 So. 2d 1339, United
States Fidelity & Guaranty Co. v. Wilkin Insulation
Co., supra, 144 Ill. 2d 80, and Continental Casualty
Co. v. Rapid-American Corp., supra, 80 N.Y.2d 654–55
(exclusion does not apply); see also Board of Regents
v. Royal Ins. Co. of America, supra, 517 N.W.2d 888
(outcome depends on exact wording of exclusion).
Looking to the broader universe of cases addressing
chemicals and chemical products such as lead paint,
carbon monoxide, insecticides, industrial chemicals,
and other toxic substances that are either dispersed
indoors or present health risks when used as intended,
a narrow majority of our sister states appear to have
concluded that the pollution exclusion applies so as to
bar coverage only in the context of traditional environ-
mental pollution. See MacKinnon v. Truck Ins.
Exchange, supra, 31 Cal. 4th 642 n.2.
Mt. McKinley contends, and the court in Yale con-
cluded, that decisions from other jurisdictions that limit
the applicability of the pollution exclusion to traditional
environmental contamination do not constitute persua-
sive authority in Connecticut because those decisions
rely on extrinsic evidence, such as the drafting history
and purpose of the pollution exclusion, without first
determining that the plain language of the exclusion is
ambiguous. See Yale University v. Cigna Ins. Co.,
supra, 224 F. Supp. 2d 423 (noting that, ‘‘[u]nder Con-
necticut law . . . any ambiguity in a contract must
emanate from the language used in the contract rather
than from one party’s subjective perception of the
terms’’ [internal quotation marks omitted]). We
disagree.
Although it is true that a number of the cases from
other jurisdictions that interpret the pollution exclusion
narrowly consider the history of and intent behind the
exclusion, most do so only after first reviewing the
policy language and finding it to be independently
ambiguous. See, e.g., Continental Casualty Co. v.
Rapid-American Corp., supra, 80 N.Y.2d 652; West
American Ins. Co. v. Tufco Flooring East, Inc., supra,
104 N.C. App. 323. In addition, many of the cases that
conclude that the exclusion does not bar coverage do
so solely on the basis of a plain language analysis, with-
out ever considering extrinsic evidence of drafting his-
tory or intent. See, e.g., In re Asbestos Products
Liability Litigation (VI), supra, 1997 WL 539916;
Lefrak Organization, Inc. v. Chubb Custom Ins. Co.,
supra, 942 F. Supp. 949; Regent Ins. Co. v. Holmes,
supra, 835 F. Supp. 579; Essex Ins. Co. v. Avondale
Mills, Inc., supra, 639 So. 2d 1339; Mellin v. Northern
Security Ins. Co., supra, 167 N.H. 544. Moreover, we
agree with the trial court that the cases that adopt a
narrow reading of the standard pollution exclusion tend
to be more convincing than those that do not, insofar
as the former interpret key terms such as ‘‘contaminant
‘‘ and ‘‘irritant’’ in context and with reference to whether
the sorts of claims raised in the underlying complaints
constitute ‘‘release . . . into or upon land, the atmo-
sphere or any watercourse or body of water . . . .’’
(Emphasis omitted.) Accordingly, we find the cases
supporting Vanderbilt’s interpretation of the pollution
exclusion to be more persuasive.
e
Drafting History and Purpose
To summarize, our review of the policy language
tends to support Vanderbilt’s position that a reasonable
insured would not expect the standard pollution exclu-
sion to apply outside the context of traditional environ-
mental pollution. To the extent that the language is
ambiguous, as the trial court concluded, our review of
extrinsic evidence of the drafting history and purpose
of the standard pollution exclusion also favors Vander-
bilt’s interpretation of the policy language.
The drafting history and original purpose of the stan-
dard pollution exclusion have been extensively
reviewed by other courts and commentators, virtually
all of whom have concluded that its initial intent was
to preclude coverage only for cleanup costs and other
liabilities associated with intentional environmental
pollution.84 As the New Jersey Supreme Court
explained, ‘‘[comprehensive general liability] policies
prior to 1966 afforded liability coverage for bodily injury
and property damage caused by accident, the term acci-
dent being undefined in the standard policy. Courts
generally construed the term accident to encompass
ongoing events that inflicted injury over an extended
period provided that the injury was unexpected and
unintended from the insured’s standpoint.
‘‘In 1966 the insurance industry revised its standard-
form [comprehensive general liability] policy to afford
coverage based on an occurrence, which the policy
defined as an accident, including injurious exposure to
conditions, which results, during the policy period, in
bodily injury or property damage that was neither
expected nor intended from the standpoint of the
insured. . . . The 1966 revision of the [comprehensive
general liability] policy was generally understood to
cover pollution liability that arose from gradual
losses . . . .
‘‘Foreseeing an impending increase in claims for envi-
ronmentally-related losses, and cognizant of the broad-
ened coverage for pollution damage provided by the
occurrence-based, [comprehensive general liability]
policy, the insurance industry drafting organizations
began in 1970 the process of drafting and securing regu-
latory approval for the standard pollution-exclusion
clause. The insurer[s’] primary concern was that the
occurrence-based policies, drafted before large scale
industrial pollution attracted wide public attention,
seemed tailor-made to extend coverage to most pollu-
tion situations. . . . Commentators attribute the insur-
ance industry’s increased concern about pollution
claims to environmental catastrophes that occurred
during the 1960s. Pollution claims burst on the insur-
ance scene following the Torrey Canyon disaster and
the Santa Barbara off-shore drilling oil spills in 1969.
. . . Other commentators observe that the insurance
industry, concerned about public reaction to environ-
mental pollution, desired to clarify and publicize its
position that [comprehensive general liability] policies
did not indemnify knowing polluters. . . . Consistent
with that objective, the [p]resident of [one insurance
company] announced [that] . . .
‘‘We will no longer insure the company which know-
ingly dumps its wastes. In our opinion, such repeated
actions—especially in violation of specific laws—are
not insurable exposures. Moreover, we are inclined to
think that any attempt to provide such insurance might
well be contrary to public policy. . . .
‘‘The end-product of the [Insurance Rating Board’s]
drafting effort was the standard pollution-exclusion
clause . . . . According to one member of the drafting
committee, the pollution-exclusion clause allowed the
underwriters to perform their traditional function as
insurers of the unexpected event or happening and yet
. . . [did] not allow an insured to seek protection from
his liability insurers if he knowingly pollute[d]. . . .
The New York State legislature apparently shared that
view of the pollution-exclusion clause’s purpose,
enacting in 1971 a statute requiring policies issued to
commercial or industrial enterprises to include the stan-
dard form pollution-exclusion clause . . . and offering
this explanation for its adoption:
‘‘For example, a polluting corporation might continue
to pollute the environment if it could buy protection
from potential liability for only the small cost of an
annual insurance premium, whereas, it might stop pol-
luting, if it had to risk bearing itself the full penalty for
violating the law. . . .
‘‘After industry approval, the [Insurance Rating
Board] and the Mutual Insurance Rating Bureau . . .
sought state regulatory approval to add the pollution-
exclusion clause as an endorsement to standard [com-
prehensive general liability] policies, apparently sub-
mitting to most if not all states in which approval was
sought a standard explanatory memorandum that read
in part as follows:
‘‘Coverage for pollution or contamination is not pro-
vided in most cases under present policies because the
damages can be said to be expected or intended and
thus are excluded by the definition of occurrence. The
above exclusion clarifies this situation so as to avoid
any question of intent.’’ (Citations omitted; internal quo-
tation marks omitted.) Morton International, Inc. v.
General Accident Ins. Co. of America, 134 N.J. 1, 31–36,
629 A.2d 831 (1993), cert. denied sub nom. Ins. Co. of
North America v. Morton International, Inc., 512 U.S.
1245, 114 S. Ct. 2764, 129 L. Ed. 2d 878 (1994).
We agree with our sister courts that this drafting
history makes abundantly clear that the insurance
industry drafted the pollution exclusion in 197085 to
address new liabilities that had arisen in conjunction
with the advent of the modern environmental regulatory
system in the 1960s, and that the exclusion was intended
to bar coverage only for liabilities arising out of tradi-
tional environmental pollution such as the intentional
dumping of hazardous waste and other toxic materials
into the natural environment. The clause was never
intended to apply to situations in which a commercial
or industrial product is discovered to pose health
threats to individuals who manufacture, apply, or are
otherwise exposed to it in the ordinary course of busi-
ness. Accordingly, having reviewed the relevant drafting
history, we remain persuaded that a reasonable insured
would not expect the standard pollution exclusion to
bar coverage for claims of asbestos related disease that
do not qualify as traditional environmental pollution.
f
Conclusion
In conclusion, we agree with the trial court that the
standard pollution exclusions do not, as a general mat-
ter, bar coverage for the underlying claims. To the
extent that certain underlying actions may allege tradi-
tional environmental contamination, for example, that
the outdoor dumping of silica waste permitted asbestos
fibers to become airborne and disperse onto neigh-
boring properties or into the natural environment, we
understand that the trial court intends to make such
factual determinations during a subsequent stage of
the proceedings.
2
Nonstandard Pollution Exclusions
Having concluded that the standard pollution exclu-
sion does not, as a general matter, bar coverage for the
underlying claims, we now turn our attention to the
nonstandard exclusions contained in some of the defen-
dants’ policies. These are of three general types.
First, in keeping with industry practices, certain of
the defendants beginning in 1985 issued what have
come to be known as absolute pollution exclusions.
Absolute exclusions omit from the standard exclusion
the exception that ‘‘this exclusion does not apply if
such discharge, dispersal, release or escape is sudden
and accidental.’’86 None of the defendants contend that
this omission is relevant to the question of whether the
pollution exclusion applies outside of the traditional
environmental context.
Second, certain policies make minor changes to the
list of substances to which the pollution exclusion
applies. After 1979, for example, rather than including
a separate exclusion provision governing oil and other
petroleum substances, Gibraltar added those sub-
stances to the list of pollutants contained in the stan-
dard pollution exclusion. Its policies provide: ‘‘This
policy shall not apply to . . . smoke, vapors, soot,
fumes, acids, alkalis, oil or other petroleum sub-
stance[s], toxic chemicals, liquids or gases, waste mate-
rials or other irritants, contaminants or pollutants
. . . .’’ (Emphasis added.) Again, none of the defen-
dants contend that this omission is relevant to the ques-
tion before us.
Third, the 1985 policies issued by National Casualty
and Lloyd’s contain exclusions that, while incorporating
some language from the standard exclusion, make sub-
stantial material additions to and deletions from the
standard exclusion language. National Casualty identi-
fies its pollution clause as a ‘‘Total Pollution Exclu-
sion’’87 whereas Lloyd’s is dubbed an ‘‘Industries,
Seepage, Pollution and Contamination Exclusion.’’88
The London insurers, alone among the defendants,
maintain that their policy language differs materially
from the standard exclusion. Specifically, they contend
that the trial court improperly concluded that the term
‘‘contamination’’ in the Lloyd’s 1985 policy is ambiguous
with respect to alleged asbestos exposure. We disagree.
For the most part, our analysis in the preceding parts
of this opinion applies with equal force to these nonstan-
dard exclusions. With respect to the Lloyd’s 1985 policy
in particular, we reiterate that ‘‘pollution’’ frequently is
defined as more or less synonymous with ‘‘contamina-
tion,’’ both in dictionaries; see, e.g., American Heritage
Dictionary of the English Language, supra; and in envi-
ronmental regulations. See, e.g., 42 U.S.C. § 9601 (33)
(‘‘[t]he term ‘pollutant or contaminant’ shall include
. . .’’). Moreover, technical dictionaries indicate that
‘‘contamination,’’ like ‘‘pollution,’’ can be an environ-
mental term of art. See, e.g., Encyclopaedic Dictionary
of Environmental Change, supra, p. 119 (‘‘Contaminant:
In the natural environmental context, a substance intro-
duced into a natural ecosystem by human agency. It may
change the system in some way but, unlike a pollutant, a
contaminant does not necessarily impair or harm organ-
isms.’’). We note as well that ‘‘seepage,’’ the other term
used in the Lloyd’s exclusion, also can be a term of art
used with reference to the release and remediation of
environmental contaminants. See Regs., Conn. State
Agencies § 22a-133k-1 (53) (‘‘ ‘[r]elease’ means any dis-
charge, spillage, uncontrolled loss, seepage, filtration,
leakage, injection, escape, dumping, pumping, pouring,
emitting, emptying, or disposal of a substance’’ [empha-
sis added]). Accordingly, we have no difficulty conclud-
ing that it is at least ambiguous whether the term
‘‘contamination,’’ both taken alone and, especially, in
the context of the phrase ‘‘seepage, pollution or contam-
ination,’’ applies so as to bar coverage for the underlying
claims. Although we have no specific information as to
the drafting history of the Lloyd’s provision, we agree
with the trial court’s conclusion that, in the absence of
extrinsic evidence, we must construe this ambiguous
provision in favor of the insured. We therefore conclude
that the trial court properly determined that none of
the pollution exclusion clauses at issue in this case
apply so as to bar coverage outside the context of tradi-
tional environmental pollution.
B
Occupational Disease Exclusions
We next turn our attention to clauses in certain of
Vanderbilt’s secondary insurance policies that exclude
coverage for occupational disease. Addressing a ques-
tion of first impression not only in Connecticut but also
nationally,89 the trial court concluded that those clauses
bar coverage only for occupational disease claims
brought by a policyholder’s own employees and that the
exclusions do not apply to complainants who developed
occupational disease while using the policyholder’s
products in the course of working for another employer.
On appeal, National Casualty contends, and we agree,
that the trial court construed the occupational disease
exclusions too narrowly, and that they unambiguously
apply so as to bar coverage for any underlying actions
whose allegations meet the standard definition of occu-
pational disease. Although the definition of ‘‘occupa-
tional disease’’ may be derived from workers’
compensation law, it does not follow that the term
applies only to workers’ compensation claims brought
against one’s own employer.
1
Facts
The following additional facts as found by the trial
court, undisputed insurance policy language gleaned
from the record, and procedural history are relevant to
our disposition of this claim. At trial, several of Vander-
bilt’s secondary insurers either sought declaratory judg-
ments determining or raised special defenses or claims
alleging that occupational disease exclusions in their
policies precluded coverage for some of the underlying
actions. Two versions of the occupational disease
exclusion are at issue.90
The first policy at issue, Lloyd’s policy number 77/
18503/1/PNB21250D, was in effect from May 17, 1977
through March 3, 1979. The policy contains an endorse-
ment clause stating in relevant part that ‘‘this policy
shall not apply . . . to personal injury (fatal or non-
fatal) by occupational disease.’’ Several other defen-
dants issued secondary policies following form to the
Lloyd’s policy.91
The second policy at issue, Pacific policy number
XMO017535 (NCA15), was in effect from March 3, 1985
through March 3, 1986. It contains the following
endorsement clause: ‘‘This policy does not apply to any
liability arising out of: Occupational Disease.’’ National
Casualty, which has taken the lead in challenging the
trial court’s rulings regarding the occupational disease
exclusions, issued an excess policy, number XU000233,
which follows form to the Pacific policy. Lloyd’s also
issued an excess policy that follows form to the Pacific
policy. None of the relevant policies defines the term
‘‘occupational disease.’’
In addition to these occupational disease exclusions,
the Lloyd’s and Pacific policies contain employers’ lia-
bility exclusions. The Lloyd’s policy provides that ‘‘this
policy shall not apply . . . to the liability of employ-
ees.’’ The Pacific policy provides that ‘‘[t]his policy does
not apply to personal injury to any employee of the
insured arising out of and in the course of his employ-
ment by the insured or to any obligation of the insured
to indemnify another because of damages arising out
of such injury.’’ In addition, National Casualty’s excess
policy, while following form to the Pacific policy, also
includes its own ‘‘employers liability exclusion,’’ which
is somewhat broader than the one in the Pacific policy.
It provides in relevant part: ‘‘[T]his policy shall not
apply to any liability for bodily injury, sickness, disease,
disability or shock, including death at any time resulting
therefrom . . . sustained by any employee of the
insured and arising out of and in the course of his
employment by the insured.’’ Last, both the Lloyd’s and
Pacific policies contain exclusions for obligations for
which the insured may be held liable under workers’
compensation, unemployment compensation, or dis-
ability benefits laws.
To facilitate the trial court’s resolution of the issue,
the parties stipulated during the second phase of the
trial that none of the claimants in the underlying actions
are or ever were Vanderbilt employees. The parties
further stipulated that the underlying complaints fall
into three categories: those that allege (1) exposure to
Vanderbilt products solely through the workplace of
another employer, (2) exposure both in and outside the
workplace, and (3) exposure solely outside the work-
place. Accordingly, if the occupational disease exclu-
sions do apply to nonemployees of Vanderbilt, they
likely will bar coverage for some but not all of the
underlying complaints during the relevant policy
years.92
In its Phase II decision, the trial court concluded
that the occupational disease exclusions apply only to
claims brought by Vanderbilt’s own employees.
Because the policies themselves do not define the term
‘‘occupational disease,’’ the court looked to the Work-
ers’ Compensation Act (act), General Statutes § 31-275
et seq., for a definition of the term. Section 31-275 (15)
provides that ‘‘ ‘[o]ccupational disease’ includes any dis-
ease peculiar to the occupation in which the employee
was engaged and due to causes in excess of the ordinary
hazards of employment as such, and includes any dis-
ease due to or attributable to exposure to or contact
with any radioactive material by an employee in the
course of his employment.’’ The trial court concluded
that the term, as defined in the statute, was unambigu-
ous, and that it applied solely to employees of the
insured. The court rejected the defendants’ argument
that such a construction would render the occupational
disease exclusion superfluous, insofar as the employ-
ers’ liability exclusions in the policies already preclude
coverage for any claims of workplace injury or disease
by employees of the policyholder. The court reasoned
that the act draws a distinction between occupational
diseases; General Statutes § 31-275 (15); and ‘‘ ‘[p]er-
sonal injur[ies]’ ’’; General Statutes § 31-275 (16); and
that the policies at issue incorporate that distinction—
whereas the occupational disease exclusion applies to
employees of an insured who allege occupational dis-
eases, the employers’ liability exclusion applies to
employees who allege that they have suffered sudden
personal injuries while on the job.
Because the court agreed with Vanderbilt that the
occupational disease exclusions do not apply to any of
the underlying claims, the court did not address Vander-
bilt’s alternative arguments that (1) in the event that
the policy language is determined to be ambiguous, the
exclusions should be construed in favor of the insured
pursuant to the doctrine of contra proferentem, and (2)
certain of the defendants have waived their right to
invoke the exclusions.
2
Analysis
Although the trial court’s reasoning is not entirely
clear, the court appears to have assumed that the term
‘‘occupational disease,’’ which is not defined in the poli-
cies, is a legal term of art that derives its meaning from
Connecticut’s workers’ compensation laws. The court
further assumed that, if the phrase is a term of art
peculiar to workers’ compensation law, then, because
workers’ compensation law governs only workers’
claims against their own employers, it necessarily fol-
lows that the policy exclusions also apply solely to such
claims. We disagree with both steps of the court’s
analysis.
The following principles guide our resolution of this
claim. ‘‘In construing the terms of a [contract], the court
is required to give the document’s language its common
and generally accepted, or plain and ordinary meaning,
unless a technical or special meaning is clearly
intended.’’ (Internal quotation marks omitted.) Keep-
er’s, Inc. v. ATGCKG Realestate, LLC, 146 Conn. App.
789, 798, 80 A.3d 88 (2013), cert. denied, 311 Conn. 913,
84 A.3d 881 (2014). ‘‘A phrase is a legal term of art if
it has acquired a peculiar and appropriate meaning in
the law requiring it to be construed and understood
accordingly.’’ (Internal quotation marks omitted.) Id.,
799. ‘‘If the language used in a [contract] is technical
or constitutes terms of art, the general rule is that such
language is to be given its common technical meaning
. . . . Words with a fixed legal or judicially settled
meaning must be presumed to have been used in that
sense.’’ (Citation omitted; internal quotation marks
omitted.) Id., 798–99; see also 2 Restatement (Second),
supra, § 202 (3) (b) (terms of art are to be given their
technical meaning when used in contractual transaction
within their technical field).
Although it is true that a term that is not defined in
a contract may be a term of art that is definable by
reference to a governing statute or regulation; see
Schmidt v. O. K. Baking Co., 90 Conn. 217, 220, 96 A.
963 (1916); there is no reason to assume that the parties
to a contract intended to incorporate a definition pro-
vided in an unrelated statute. Rather, because ‘‘[i]t is
a fundamental principle of contract law that the . . .
terms of a contract are to be determined from the intent
of the parties’’; (internal quotation marks omitted) Auto
Glass Express, Inc. v. Hanover Ins. Co., supra, 293
Conn. 225; ‘‘the mutual understanding of the parties
[ordinarily] prevails even [when] the contractual term
has been defined differently by statute or administrative
regulation.’’ 2 Restatement (Second), supra, § 201, com-
ment (c), p. 84; see also id., illustration (3), pp. 84–85
(when contractual term is undefined, prevailing trade
use trumps statutory definition); id., § 202, comment
(f), p. 90 (technical phrases may be used in contract in
different, nontechnical senses).
Applying these principles to the present case, we
begin by observing that the plain language of the occu-
pational disease exclusions is stated in broad, general
terms, and nowhere indicates that coverage is barred
only for claims brought by a policyholder’s own employ-
ees. The Pacific policy, for example, provides simply
that ‘‘[t]his policy does not apply to any liability arising
out of: Occupational Disease.’’ (Emphasis added.) The
onus is thus on Vanderbilt to establish that, notwith-
standing the plain language of the policy, the occupa-
tional disease exclusions contain some latent ambiguity
or implicitly apply only to employee lawsuits.
Vanderbilt attempts to meet this burden by establish-
ing that ‘‘occupational disease’’ is a term of art peculiar
to Connecticut workers’ compensation law. That theory
hits an immediate snag, however, insofar as there is
nothing in the record to suggest that the exclusions at
issue were included only in insurance policies sold in
Connecticut. In fact, when the National Casualty policy
was issued, it listed an address for Vanderbilt in Law-
rence, New York. Notably, that policy contains a ‘‘New
York Amendatory Endorsement,’’ and notice stamps on
each page of the policy indicate that the policy qualified
for ‘‘New York State Free Trade Zone’’ exemptions from
New York’s insurance regulations,93 suggesting that the
parties may have understood the agreement to be gov-
erned by New York law.94 Accordingly, it is not apparent
to us that the parties intended or expected that unde-
fined terms would be defined with reference to Con-
necticut statutes.
There also is no indication on the face of the policies
that the parties intended that the phrase ‘‘occupational
disease’’ would be construed as a term of art of workers’
compensation law. Although the policies do contain
brief references to ‘‘obligation[s] . . . under any work-
men’s compensation, unemployment compensation or
disability benefits law,’’ those references are located in
the main, boilerplate portion of the policy, among other
standard form exclusions. The occupational disease
exclusion, by contrast, is contained in a separate
endorsement that is printed in a distinct typeface and
indicates that it was prepared as an addendum, ‘‘subse-
quent to the preparation of the policy.’’ Accordingly,
we see no reason to conclude that the parties, who
entered into a comprehensive general liability insurance
agreement, intended that the policy terms would be
construed according to workers’ compensation law,
rather than according to ordinary usage.
Vanderbilt’s primary argument in response is that
‘‘the term ‘occupational disease’ is so interwoven with
the concept of workers’ compensation and other claims
by an employee against his employer as to be meaning-
less outside of that particular context.’’ In other words,
Vanderbilt’s position is that ‘‘occupational disease’’ is
a term of art that is a creature of workers’ compensation
law and that has no ordinary meaning outside of that
arena. Vanderbilt claims to find support for this theory
in sources such as Black’s Law Dictionary, supra, and
H. Rubin, Dictionary of Insurance Terms (5th Ed. 2008),
both of which define occupational disease with refer-
ence to workers’ compensation law.
We agree that the term ‘‘occupational disease’’ is fre-
quently used and has obtained a peculiar meaning in the
context of workers’ compensation law. In Ricigliano v.
Ideal Forging Corp., supra, 280 Conn. 723, for instance,
our Supreme Court traced the origin of the phrase,
‘‘ ‘first manifestation of a symptom of the occupational
disease,’ ’’ to a 1927 amendment to our state’s workers’
compensation laws. Id., 732. We also have no cause to
question the conclusion of the trial court that § 31-
275 (15) provides a reasonable definition of the term
‘‘occupational disease.’’ What is at issue in the present
dispute, however, is not the meaning of that phrase
but, rather, its application. Vanderbilt contends that
coverage is barred only when a complainant sues his
or her employer for ‘‘ ‘disease[s] peculiar to the occupa-
tion in which the employee was engaged,’ ’’ whereas
National Casualty contends that the preclusion applies
when a complainant sues any policyholder for such a
disease. Nothing in § 31-275 (15) itself purports to
address that question.
Distilled to its essence, Vanderbilt’s argument is that
workers’ compensation programs represented the sole
or primary use of the term ‘‘occupational disease’’ at
the time the relevant policies were drafted. We disagree.
Rather, our research reveals that, between the late
1970s and mid-1980s, ‘‘occupational disease’’ had a com-
mon and ordinary meaning within the legal and insur-
ance fields. In 1979, for example, a note was published
in the Harvard Law Review entitled ‘‘Compensating Vic-
tims of Occupational Disease,’’ 93 Harv. L. Rev. 916
(1979). The note explained that, at that time, ‘‘relief for
the victims of occupational diseases [could] come from
workers’ compensation or the tort system.’’ (Emphasis
added; footnote omitted.) Id., 916. Observing that
‘‘[p]roducts liability actions filed by those contracting
occupational diseases have proliferated in recent
years,’’ the note explained that individuals who were
barred by workers’ compensation laws from suing their
employers were instead ‘‘su[ing] the manufacturer or
seller of a product used in the workplace if that product
caused the illness.’’ Id., 926. Notably, the primary exam-
ple that the note gave of this proliferation of private
occupational disease litigation as an alternative to
workers’ compensation remedies was that ‘‘a worker
exposed to asbestos while employed by an installer
of insulation can sue the company that supplied the
asbestos to his employer.’’ Id.
Other legal sources published at the time of drafting
likewise evidence a concern or recognition that the
growing prevalence of asbestos related occupational
diseases was giving rise to an increase in private law-
suits against manufacturers, outside of the workers’
compensation arena.95 Moreover, although Vanderbilt
is correct that certain contemporary reference sources
define ‘‘occupational disease’’ with respect to workers’
compensation; see, e.g., Black’s Law Dictionary, supra,
p. 1184 (stating that ‘‘[e]mployees who suffer from occu-
pational diseases are eligible for workers’ compensa-
tion’’); H. Rubin, supra, p. 346 (stating that ‘‘[c]overage
for [occupational disease] is found under workers com-
pensation insurance’’); other sources define the phrase
generally, without reference to workers’ compensation.
See, e.g., 10 Oxford English Dictionary (2d Ed. 1991)
p. 682 (defining ‘‘occupational disease’’ as ‘‘[a] disease
to which a particular occupation renders a person espe-
cially liable’’); see also C. Crobaugh, Handbook of Insur-
ance (1931) pp. 929–30 (discussing occupational
disease problem and noting that, at time of writing, such
diseases were not covered by workers’ compensation
programs in most states). Still other sources define
the phrase with specificity, yet contain no reference
to workers’ compensation. See, e.g., Ballentine’s Law
Dictionary, supra, p. 879 (defining ‘‘occupational dis-
ease’’ as ‘‘[a] disease which develops gradually and
imperceptibly as a result of engaging in a particular
employment and is generally known and understood
to be a usual and natural incident or hazard of such
employment. . . . A disease caused by or especially
incident to a particular employment. . . . Something
other than an accidental injury. But none the less a
personal injury, the injury being regarded as sustained
when the employee becomes unable to work.’’ [Cita-
tions omitted.]).
Accordingly, our review of the use of the term ‘‘occu-
pational disease’’ at the time the relevant policies were
drafted does not persuade us that the parties intended
to use the term in a limited, technical manner. Rather,
the most reasonable reading of the policy language,
particularly in light of the cited legal scholarship from
that era, is that the insurance industry was concerned
over the emerging proliferation of private litigation by
workers who, having developed long latency diseases
after exposure to asbestos and other alleged industrial
toxins, sought to circumvent the workers’ compensa-
tion system and sue manufacturers of those products.
We also agree with National Casualty that reading an
implied restriction into the occupational disease exclu-
sions would violate several recognized canons of con-
tract construction. It is well established, for example,
that ‘‘in construing contracts, we [must] give effect to
all the language included therein, as the law of contract
interpretation . . . militates against interpreting a con-
tract in a way that renders a provision superfluous.’’
(Internal quotation marks omitted.) Ramirez v. Health
Net of the Northeast, Inc., supra, 285 Conn. 14. The
contracts at issue contain other exclusions that (1) bar
coverage for workers’ compensation claims and (2) bar
coverage for any liabilities arising out of injuries to the
policyholder’s own employees. If we were to construe
the occupational disease exclusions to apply only to
claims against one’s employer, as Vanderbilt proposes,
then the exclusions would be rendered redundant and
superfluous because these other provisions already bar
coverage for such claims.
The trial court, in rejecting this argument, relied on
what it understood to be a distinction in the Workers’
Compensation Act between two types of employment
related injuries: ‘‘occupational diseases,’’ which are
defined in § 31-275 (15), and ‘‘ ‘[p]ersonal injur[ies],’ ’’
which are defined in § 31-275 (16) (A). Specifically, the
court understood personal injuries to be sudden injuries
such as industrial accidents, which occur on a particular
date, whereas occupational diseases are disabilities that
emerge gradually over time. The court reasoned that
the occupational disease exclusions and the employer
liability exclusions in the Vanderbilt policies were dis-
tinct exclusions that tracked this distinction between
‘‘occupational disease’’ and ‘‘personal injury’’ in the act.
In other words, the employer liability clauses bar
employee suits arising from sudden, accidental injuries,
whereas the occupational disease exclusions bar
employee suits arising from diseases gradually
developed.
We perceive several flaws in this analysis. First, it is
not clear to us that the act does in fact draw a sharp
distinction between personal injuries and occupational
diseases. Section 31-275 (16) (A) provides: ‘‘ ‘Personal
injury’ or ‘injury’ includes, in addition to accidental
injury that may be definitely located as to the time
when and the place where the accident occurred, an
injury to an employee that is causally connected with
the employee’s employment and is the direct result of
repetitive trauma or repetitive acts incident to such
employment, and occupational disease.’’ (Emphasis
added.) The trial court, focusing on the first section of
the definition, appears to have overlooked the latter
portion, which suggests that personal injury is a blanket
concept that encompasses not only accidental injuries
but also repetitive stress injuries and occupational dis-
eases. That occupational diseases represent a subset
of personal injuries for purposes of the act finds further
support in § 31-275 (16) (B), which provides in relevant
part: ‘‘ ‘Personal injury’ or ‘injury’ shall not be construed
to include . . . (ii) [a] mental or emotional impairment,
unless such impairment . . . arises from a physical
injury or occupational disease . . . .’’ (Emphasis
added.) The plain language of the act thus does not
support the court’s effort to distinguish occupational
diseases from personal injuries, and neither the court
nor Vanderbilt has cited any authority to support a
contrary interpretation of Connecticut law.
The second defect in the court’s analysis is that it
assumed that the parties intended to import the act’s
definition of the term ‘‘personal injury.’’ See Commer-
cial Union Ins. Co. v. Porter Hayden Co., 116 Md. App.
605, 697–701, 698 A.2d 1167 (courts should not assume
that statutory distinction between personal injury and
occupational disease applies outside of workers’ com-
pensation context), cert. denied, 348 Md. 205, 703 A.2d
147 (1997). The employer’s liability exclusion in the
Pacific policy, for example, provides that ‘‘[t]his policy
does not apply to personal injury to any employee of
the insured . . . .’’ But the term ‘‘personal injury’’ is
defined at some length in the ‘‘Definitions’’ section of
the policy, which provides in relevant part that ‘‘ ‘per-
sonal injury’ means, (a) bodily injury . . . .’’ ‘‘Bodily
injury,’’ in turn, is defined to mean ‘‘bodily injury, sick-
ness or disease sustained by any person which occurs
during the policy period . . . .’’ (Emphasis added.) By
the policy’s express terms, then, personal injury
includes not only sudden, accidental injury, but also
sickness and disease. This forecloses the trial court’s
interpretation of the employer’s liability exclusion as
speaking only to nondisease injuries.
The court’s analysis is even less compelling when
applied to the National Casualty policy. The employer
liability exclusion in that policy provides in relevant
part that ‘‘this policy shall not apply to any liability
for bodily injury, sickness, disease, disability or shock,
including death at any time resulting therefrom . . . .’’
(Emphasis added.) In this case, the exclusion clause
itself refers to illness and disease as well as injury,
precluding the possibility that the drafters intended to
import a distinction between accidental injury and
occupational disease.96
The third shortcoming in the court’s analysis is that
it is inconsistent with another well established canon
of construction. ‘‘It is a general rule of contract interpre-
tation that if a contract includes a level of specificity
in one context and then omits that specificity in a similar
context, such an omission is purposeful and should be
given meaning.’’ O’Connell v. Liberty Mutual Fire Ins.
Co., 43 F. Supp. 3d 1093, 1097 n.3 (D. Mont. 2014); see
also State v. Heredia, 310 Conn. 742, 761, 81 A.3d 1163
(2013). In the present case, the employer liability exclu-
sion clauses in the Pacific and National Casualty poli-
cies are labeled as such, and each expressly states that
it excludes coverage only for injuries sustained by ‘‘any
employee of the insured . . . .’’ The fact that the occu-
pational disease exclusions are framed broadly and do
not contain any similar language of limitation strongly
suggests that the parties did not intend that they would
be qualified in that manner. In other words, if the parties
had intended that the occupational disease clause
would bar coverage for occupational disease by
employees and the employer liability clause would bar
coverage for accidental personal injuries by employees,
then it is reasonable to assume that the drafters would
have expressly referenced employees of the insured in
both instances or (perhaps) neither, but not in the latter
instance but not the former.
For all of these reasons, we conclude that the trial
court construed the occupational disease clauses too
narrowly, and that those exclusions unambiguously97
bar coverage for occupational disease claims brought
not only by employees of Vanderbilt but also by individ-
uals who contracted an occupational disease in the
course of their work for other employers. On remand,
the court is instructed to consider Vanderbilt’s alterna-
tive argument that certain defendants are precluded
from invoking the exclusions because they failed to
timely plead the exclusions as a special defense.
C
Duty to Defend Under Continental’s
1968–1977 Umbrella Policies
We next consider Vanderbilt’s claim that the second-
ary insurance policies that it obtained from Continental
between 1968 and 1977 unambiguously obligate Conti-
nental to defend Vanderbilt in the underlying actions
for years in which Vanderbilt’s primary policies are
exhausted, and that the trial court erred in holding to
the contrary. In the alternative, Vanderbilt contends that
the relevant policy language is ambiguous and should
be construed in favor of coverage. We disagree and
conclude that the trial court properly construed the
policy provisions at issue, which unambiguously do not
afford excess defense cost coverage.
1
Facts
The following additional undisputed facts, proce-
dural history, and policy language as gleaned from the
record are relevant to Vanderbilt’s claim. At trial, Vand-
erbilt and Continental agreed that Continental had
issued primary comprehensive general liability policies
to Vanderbilt from January 1, 1968 through March 3,
1977, and that Continental already had paid out the full
coverage limits on those policies. The parties disagreed,
however, as to whether, upon the exhaustion of those
primary policies, Continental was obliged to contribute
to defense costs in the underlying actions pursuant to
certain secondary policies it had issued to Vanderbilt.
At issue were four secondary insurance policies: RDU
9004526, effective from January 1, 1968 to January 1,
1971; RDU 8046898, effective from January 1, 1971 to
January 1, 1974; RDU 1251453, effective from January
1, 1974 to January 1, 1977; and RDU 1863573, effective
from January 1, 1977 to January 1, 1978.98 Each of these
Continental policies is identified on its face as an
‘‘Umbrella Excess Third Party Liability Policy.’’
Each policy contains dual coverage grants. The first
grant, entitled ‘‘COVERAGE A—EXCESS LIABILITY
INDEMNITY,’’ states in relevant part: ‘‘The company
will indemnify the insured for loss in excess of the total
applicable limits of liability stated in the schedule of
underlying insurance. The provisions of the immediate
underlying policy are, with respect to Coverage A, incor-
porated as a part of this policy except for any obligation
to investigate and defend and pay for costs and
expenses incident to any of the same, the amounts of
the limits of liability, an ‘other insurance’ provision and
any other provisions therein which are inconsistent
with this policy.’’99 (Emphasis added.) In light of the
highlighted language, Vanderbilt has conceded that it
cannot obtain a defense under Coverage A.
The second coverage grant contained in Continental’s
secondary policies, entitled ‘‘COVERAGE B—EXCESS
LIABILITY INDEMNITY OVER RETAINED LIMIT,’’ pro-
vides in relevant part: ‘‘The company will indemnify the
insured, with respect to any occurrence not covered by
underlying insurance, or with respect to damages not
covered by underlying insurance but which results
from an occurrence covered by underlying insurance,
for ultimate net loss in excess of the insured’s retained
limit which the insured shall become obligated to pay
as damages by reason of liability imposed upon the
insured by law or assumed by the insured under con-
tract because of personal injury, property damage, or
advertising injury to which this policy applies, caused
by an occurrence.
‘‘The company, with respect to an occurrence not
covered in whole or in part by underlying insurance
or to which there is no other insurance in any way
applicable, shall have the right and duty to defend any
suit against the insured seeking damages on account
of such personal injury, property damage or advertising
injury, even if any of the allegations of the suit are
groundless, false or fraudulent, and may make such
investigation and settlement of any claim or suit as it
deems expedient, but the company shall not be obli-
gated to pay any claim or judgment or to defend any
suit after the applicable limit of the company’s liability
has been exhausted.’’ (Emphasis added.)
Prior to the second phase of the trial, the parties
requested that the trial court resolve a dispute as to
whether the Coverage B provisions provide for a duty to
defend under the circumstances of the present action.
Specifically, Vanderbilt argued that if the underlying
primary policies were exhausted, those policies no
longer ‘‘ ‘covered’ ’’ and were no longer ‘‘ ‘applicable’ ’’
to the underlying actions. Therefore, the injuries alleged
in the underlying actions now qualify as ‘‘occurrence[s]
not covered in whole or in part by underlying insurance
or to which there is no other insurance in any way
applicable . . . .’’
Continental countered that the question of whether
underlying insurance covers an occurrence for pur-
poses of Coverage B focuses on the nature of the occur-
rence, not the amount of the primary policy limit. In
other words, Continental’s view was that, because the
underlying actions indisputably involve the types of
claims ‘‘ ‘covered in whole or in part’ ’’ by Vanderbilt’s
primary policies, Coverage B is not implicated regard-
less of whether those policies have been exhausted.
Rather, Continental took the position that Vanderbilt
can obtain only excess indemnity coverage for the
underlying actions, and only under Coverage A.
In a supplemental memorandum of decision, the trial
court agreed with Continental. The court concluded
that the plain and unambiguous language of the policies
does not create a duty to defend under Coverage B when
the underlying primary policies have been exhausted.
Finding no relevant Connecticut authority on point, the
court reviewed the handful of sister state decisions to
have considered similar policy language and found
those favoring Continental’s position to be more persua-
sive. The court also concluded that interpreting Cover-
age B to provide a duty to defend would render
Coverage A inconsistent and superfluous because Cov-
erage A expressly provides that the insurer does not
have a duty to defend with respect to losses in excess
of the underlying primary policy limits. Vanderbilt chal-
lenges these conclusions on appeal.
2
Analysis
In debating the meaning and scope of the Coverage
B defense coverage provisions, Vanderbilt and Conti-
nental largely talk past each other. Vanderbilt makes
much of the specific policy language providing that
Continental shall have a duty to defend with respect
to occurrences ‘‘ ‘not covered in whole or in part by
underlying insurance’ ’’ (Coverage Clause) or ‘‘ ‘to
which there is no other insurance in any way applica-
ble’ ’’ (Applicable Clause), arguing that the use of the
disjunctive ‘‘or’’ means that each clause must be given
independent meaning. Continental, by contrast, focuses
on the overall structure of the policy and the purposes of
the different coverage grants. It distinguishes between
Coverage A, which Continental understands to provide
excess coverage over the primary policy limits, and
Coverage B, which it understands to provide drop-down
or primary umbrella coverage for types of claims that
fall completely outside the ambit of the primary insur-
ance. For its part, the trial court primarily considered
how sister courts in other jurisdictions have construed
policy language that is similar but, in most instances,
not identical to that at issue in this case.
We begin by examining in greater detail the argu-
ments of the parties. On appeal, Vanderbilt now appears
to concede that the Coverage Clause contained in Cov-
erage B does not apply to circumstances such as those
in the present case, wherein an underlying primary pol-
icy has responded to certain claims up to the policy
limits, so that the primary policy is now exhausted and
no longer available to respond to other such claims.
There is no dispute, then, that new underlying claims
can be said to be ‘‘ ‘covered in whole or in part’ ’’ by
the primary policies and, therefore, they are not entitled
to a defense under the Coverage B Coverage Clause.
Vanderbilt maintains, however, that we must assume
that the Coverage Clause and the Applicable Clause
have independent meaning and that, because the
clauses are presented in the disjunctive, only one need
be satisfied in order to implicate the duty to defend. A
necessary corollary, Vanderbilt contends, is that the
policy language envisions scenarios in which a claim
is covered in whole or part by the underlying insurance
and yet there is no insurance in any way applicable.
Although this interpretation of the policy language
appears to be paradoxical, Vanderbilt posits that the
exhaustion of the primary policy limits would be an
example of such a scenario: once Vanderbilt’s 1971 pri-
mary policy pays out its limit on covered asbestos
claims, for instance, then, Vanderbilt contends, there
is no longer any insurance in any way applicable to new
claims alleging injuries during that year and, therefore,
Continental must provide a defense under the Applica-
ble Clause of Coverage B. Vanderbilt’s theory thus relies
on an implicit temporal distinction between the Cover-
age and Applicable Clauses. On its reading, the Cover-
age Clause refers to policies that provide coverage for
a particular occurrence on their face, at any time,
whereas the Applicable Clause refers only to those poli-
cies that are inapplicable at the time a claim is made
and a coverage decision must be reached.
Vanderbilt’s creative argument that Coverage B dis-
tinguishes between primary policies that never ‘‘cov-
ered’’ a claim and those that provided coverage but are
no longer ‘‘applicable’’ to the claim sidesteps in large
measure the case law on which the trial court relied.
The court cited to a number of cases for the proposition
that a drop-down umbrella insurance policy does not
provide a duty to defend when the underlying policy is
exhausted. See, e.g., Mission National Ins. Co. v. Duke
Transportation Co., 792 F.2d 550 (5th Cir. 1986); Ameri-
can Special Risk Ins. Co. v. A-Best Products, Inc., supra,
975 F. Supp. 1019; Continental Casualty Co. v. Roper
Corp., 173 Ill. App. 3d 760, 527 N.E.2d 998 (1988). Vand-
erbilt contends that those decisions are distinguishable
from the present case because, in each case, either
the policies at issue did not contain the ‘‘in any way
applicable’’ language or, if they did, the deciding court
did not discuss that language but instead focused its
analysis exclusively on whether the Coverage Clause
afforded a defense. More directly on point, Vanderbilt
contends, is Continental Casualty Co. v. Synalloy
Corp., supra, 667 F. Supp. 1523, in which the District
Court suggested—albeit in dicta and without any dis-
cussion or analysis—that the Applicable Clause does
provide a duty to defend when underlying insurance
has exhausted.100 Id., 1541.
Continental, by contrast, takes a broader perspective,
focusing its argument on the different functions alleg-
edly served by the Coverage A and Coverage B provi-
sions in its umbrella policies. As the Supreme Court of
Ohio recently explained, ‘‘[u]mbrella policies are differ-
ent from standard excess insurance policies, since they
provide both excess coverage (vertical coverage) and
primary coverage (horizontal coverage). . . . The ver-
tical coverage provides additional coverage above the
limits of the insured’s underlying primary insurance,
whereas the horizontal coverage is said to drop down
to provide primary coverage for situations where the
underlying insurance provides no coverage at all.’’ (Cita-
tion omitted; internal quotation marks omitted.)
Granger v. Auto-Owners Ins., 144 Ohio St. 3d 57, 62,
40 N.E.3d 1110 (2015);101 accord M. Taylor et al., Con-
necticut Insurance Law (2d Ed. 2013) pp. 226–27. Conti-
nental contends that the Coverage A provision in its
policies serves the excess, or vertical, insurance func-
tion, following form to an underlying primary policy
and affording additional indemnity—but not defense—
coverage once the limits of the primary policy have
been reached. Coverage B, by contrast, serves a hori-
zontal, gap-filling function, acting in place of primary
indemnity and defense coverage with respect to actions
or damages that fall completely outside the scope of
the underlying primary policy and any other applicable
policies. Continental relies on cases such as Roper Corp.
and A-Best Products, Inc., which have concluded that
these types of gap-filling provisions are primarily
intended to respond to claims seeking punitive damages
or alleging causes of action such as malpractice or
worldwide operations liability, which typically are not
covered by comprehensive general liability policies. See
American Special Risk Ins. Co. v. A-Best Products,
Inc., supra, 975 F. Supp. 1022; Continental Casualty
Co. v. Roper Corp., supra, 173 Ill. App. 3d 764. According
to this view, Coverages A and B represent different,
mutually exclusive types of insurance, and providing
additional coverage once an underlying policy has
exhausted clearly falls under the purview of the former
and not the latter. See American Special Risk Ins. Co.
v. A-Best Products, Inc., supra, 1025 (distinguishing
between coverage, which comprehends set of risks, and
collectibility, which comprehends whether damages for
covered risk are recoverable from insurer in light of its
policy limits).
We agree with Continental that, in construing insur-
ance policies, we are instructed to ‘‘look at the contract
as a whole, consider all relevant portions together and,
if possible, give operative effect to every provision in
order to reach a reasonable overall result.’’ (Internal
quotation marks omitted.) Lexington Ins. Co. v. Lexing-
ton Healthcare Group, Inc., supra, 311 Conn. 38. In
the present case, several features of the policy support
Continental’s interpretation. First, we note that the
excess policies incorporate various provisions of the
underlying primary insurance policies ‘‘with respect to
Coverage A,’’ whereas Coverage B expressly applies
to occurrences or damages not covered by underlying
insurance. The policies also indicate that Coverage A
follows form to the terms of the underlying insurance,
whereas Coverage B does not.102 This supports Conti-
nental’s theory that only Coverage A sits atop the under-
lying insurance.
Second, we note that the fourth section of each
umbrella policy, entitled ‘‘Limits of Liability,’’ lays out
the effect that the exhaustion of the underlying primary
insurance will have on the insurer’s obligations under
Coverage A. This section provides in relevant part:
‘‘With respect to Coverage A, if the applicable limit of
liability of the underlying insurance is less than as stated
in the schedule of underlying insurance because the
aggregate limit of liability of the underlying insurance
has been . . . exhausted, this policy . . . replaces the
limit of liability exhausted . . . .’’ By contrast, nothing
in the policy expressly instructs how Coverage B is to be
applied in the event that underlying primary insurance is
exhausted. This notable lacuna bolsters Continental’s
argument that Coverage B is solely a drop-down
umbrella provision that is not implicated by the exhaus-
tion of underlying insurance.
Third, it is difficult to understand how the parties to
an agreement could reasonably expect that one provi-
sion, Coverage A, would disclaim any obligation by the
insurer to provide a defense once the underlying policy
is exhausted while the very next provision, Coverage
B, imposes a duty to defend under the very same circum-
stances.103 Because Vanderbilt’s interpretation of the
policy language results in a conflict between the Cover-
age A and B provisions, any equally plausible interpreta-
tion that gives harmonious effect to all of the
contractual covenants is to be preferred. See Colorado
Milling & Elevator Co. v. Chicago, Rock Island &
Pacific Railroad Co., 382 F.2d 834, 836 (10th Cir. 1967);
2 Restatement (Second), supra, § 202, comment (d),
p. 88; 3 S. Williston, Contracts (Rev. Ed. 1936) § 618,
p. 1779.
Fourth, we note that there is nothing in the grammar
or structure of the relevant Coverage B language to
support Vanderbilt’s view that the Applicable Clause is
to be construed at the time that coverage is sought,
whereas the Coverage Clause is to be construed in
a temporal vacuum. Why, in other words, should the
relevant language—‘‘with respect to an occurrence not
covered in whole or in part by underlying insurance
or to which there is no other insurance in any way
applicable’’—be understood to mean that an exhausted
policy continues to cover a claim but is no longer appli-
cable to the claim? Particularly in light of the fact that
coverage under Coverage B is limited to situations in
which there is no other insurance in any way applica-
ble, it seems odd to interpret the Applicable Clause
as narrowly as Vanderbilt proposes. Surely, a primary
insurance policy that on its face provides coverage for
a particular claim is in some way applicable to that
claim, even if the policy limits have been reached.104
Finally, we recognize that other courts, in parsing
similar contractual provisions, have adopted Continen-
tal’s view of the policy structure, referring to Coverage
A as providing ‘‘excess’’ coverage and Coverage B as
providing ‘‘umbrella’’ coverage. See, e.g., Tri-State Con-
struction, Inc. v. Columbia Casualty Co./CNA, 39 Wn.
App. 309, 313, 692 P.2d 899 (1984). Although Vanderbilt
correctly notes that the word ‘‘excess’’ appears in the
title of both coverage provisions, the full phrase ‘‘excess
. . . over retained limit’’ used in the Coverage B title
is understood to be a term of art by which the insurance
industry describes drop-down umbrella coverage. See
T. Novak, ‘‘The Defense Obligation of Excess and
Umbrella Liability Insurance Policies,’’ 36 Brief 12, 14
(2006); see also United States v. Security Management
Co., 96 F.3d 260, 267–68 (7th Cir. 1996) (drop-down
umbrella provision provided ‘‘[c]overage [o]ver
[r]etained [l]imit’’); Fireman’s Fund Ins. Co. v.
National Bank for Cooperatives, 849 F. Supp. 1347,
1366 (N.D. Cal. 1994) (same). We also have cautioned
that courts should not interpret contracts on the basis
of section headings when doing so would conflict with
the plain meaning of the text. See FirstLight Hydro
Generating Co. v. First Black Ink, LLC, 143 Conn. App.
635, 642, 70 A.3d 174, cert. denied, 310 Conn. 913, 76
A.3d 629 (2013); but see footnote 77 of this opinion and
accompanying text.
If Continental is correct that (1) Coverage A provides
excess indemnity coverage over and above the primary
policy limits and (2) Coverage B serves a fundamentally
different purpose, dropping down to serve as primary
indemnity and defense coverage for claims that fall—
and always would have fallen—completely outside the
ambit of the primary policy, then the question becomes
whether the Coverage B language at issue can be con-
strued in a manner that is at least as plausible as Vander-
bilt’s reading but that better reconciles all of the various
policy provisions. Specifically, why are the two cover-
age clauses of Coverage B written in the disjunctive,
so as to suggest that there are a class of claims that
are covered in whole or in part by the underlying insur-
ance and yet to which there is no insurance (other than
the umbrella policy) in any way applicable?
Although the policy literally states that defense cover-
age is available when the Coverage Clause or the Appli-
cable Clause is implicated, both this court and our
Supreme Court have recognized that the word ‘‘or’’ may
on occasion be understood in the conjunctive rather
than disjunctive sense. See, e.g., State v. Angell, 237
Conn. 321, 329, 677 A.2d 912 (1996); D’Occhio v. Con-
necticut Real Estate Commission, 189 Conn. 162, 169–
70, 455 A.2d 833 (1983); Bordonaro v. Senk, 109 Conn.
428, 430, 147 A. 136 (1929); Gelinas v. West Hartford,
65 Conn. App. 265, 281, 782 A.2d 679, cert. denied,
258 Conn. 926, 783 A.2d 1028 (2001). Here, given that
Coverage B is undoubtedly an umbrella provision that
provides coverage for claims and damages not covered
by other insurance, the most reasonable reading of the
policy language is that defense coverage is available
when a claim is not covered by underlying primary
insurance and when no other coverage is applicable.105
This reading is supported by the language stating that
defense coverage is available only when no other insur-
ance is applicable ‘‘in any way.’’ Notably, at least two
other courts that have construed substantially identical
policy language have either explicitly or implicitly con-
strued the ‘‘or’’ in Coverage B in this manner. See Conti-
nental Casualty Co. v. Synalloy Corp., supra, 667 F.
Supp. 1540 (insurer’s denial of coverage under primary
policy triggers Coverage B duty to defend if there also is
no other applicable insurance); Caldwell Freight Lines,
Inc. v. Lumbermens Mutual Casualty Co., 947 So. 2d
948, 957 (Miss. 2007) (concluding that policy language
unambiguously ‘‘provides that where neither the terms
and conditions of the [underlying policy nor] any other
policy apply, then Coverage B . . . may apply’’). By
contrast, we are not aware of, and Vanderbilt has not
identified, any court that has construed the policy lan-
guage in the manner that Vanderbilt proposes.
Indeed, even if we were to understand the word ‘‘or’’
in its traditional disjunctive sense, the Applicable
Clause need not be read as expanding the class of occur-
rences for which defense coverage is available. Instead,
the language at issue simply may have been an inartful
way of expressing the idea that defense coverage is
available under the policy only for occurrences that are
not covered (1) in whole by underlying insurance, or
(2) in part by underlying insurance, or (3) in any way
by other applicable insurance.
In this sense, the disputed language in the second
paragraph of Coverage B may be understood as parallel-
ing the indemnity provision in the first paragraph of
Coverage B. The first paragraph states that the insurer
will provide indemnity coverage when (1) occurrences
are not covered by underlying insurance or (2) occur-
rences are covered by underlying insurance but the
damages claimed are not. The relevant language in the
second paragraph tracks that dichotomy and may be
understood to provide defense coverage under the same
two circumstances: (1) when an occurrence is not cov-
ered by underlying primary insurance; or (2) when the
occurrence is covered but the damages claimed are not
covered and no other relevant policies are available to
respond. See footnote 104 of this opinion. The fact that
the second paragraph of Coverage B affords the insurer
the right as well as the duty to defend under those
two circumstances is consistent with the idea that the
language at issue in the second paragraph simply tracks
the two circumstances under which the first paragraph
affords indemnity coverage.
Although this interpretation requires that we read
something into the policy language, it is no less fettered
to the plain language of the contract than is the interpre-
tation proposed by Vanderbilt. Because Continental’s
reading of the policy language is equally plausible on its
face and best comports with other specific provisions of
the policy, the overall policy structure, and the conclu-
sions reached by our sister courts, we conclude that
the trial court properly determined that Coverage B
unambiguously does not require the insurer to defend
claims that would have been covered by underlying
insurance but for its exhaustion.
V
OTHER CLAIMS
Finally, we consider: (1) Mt. McKinley’s claim that
the trial court improperly admitted certain charts into
evidence; (2) two additional claims raised by Mt. McKin-
ley regarding exhaustion of the primary policies issued
by Hartford and Continental; (3) Old Republic’s claim
that the trial court should have determined the extent
of Old Republic’s defense obligations pursuant to its
excess insurance policies during the Phase II trial; and
(4) Continental’s claim that the trial court should have
concluded that Continental has no duty to defend Vand-
erbilt under certain other excess insurance policies. We
find no error.
A
Admission of Posner Charts
Mt. McKinley challenges the admission into evidence
of certain charts prepared by Posner, who testified as
an expert witness on behalf of Vanderbilt. Mt. McKinley
claims that the court improperly admitted those materi-
als as substantive evidence for the truth of the informa-
tion contained therein, in contravention of § 7-4 (b) of
the Connecticut Code of Evidence. By contrast, Vander-
bilt submits that the court properly admitted the charts
for the limited purpose of explaining the methodology
and information relied on by Posner in formulating his
expert opinion. On our review of the record, we agree
with Vanderbilt.
The following additional facts are relevant to this
claim. At the time of trial, Posner possessed more than
thirty-five years of experience in the field of insurance
and risk management. Posner testified that he had per-
formed allocations among multiple insurance carriers
for ‘‘long-tail claims,’’ such as asbestos and environmen-
tal claims, ‘‘hundreds of times.’’ During the Phase II
proceeding, Posner provided expert testimony on the
allocation of indemnity payments by Continental and
Hartford.106 His expert opinion was predicated in part
on information documented in four charts that Posner
prepared prior to trial.107 The first chart, known as plain-
tiff’s exhibit V-781-285, was captioned ‘‘Preliminary
Data for Allocation.’’ Referred to at trial as the ‘‘master
document,’’ Posner described that chart as ‘‘an Excel
spreadsheet, which I put together in order to capture
important information from which I [then] was going
to perform an allocation.’’108 That chart detailed, among
other things, the names of numerous claimants, their
‘‘exposure begin dates and exposure end dates,’’ and
payment amounts by certain entities. The second and
third charts at issue depict ‘‘allocation model[s]’’ that
Posner created utilizing the information contained in
the master document, albeit with different default dates
of first exposure.109 Posner described the fourth chart as
a ‘‘reconciliation chart’’ that ‘‘summarizes the amounts
that I allocated [and] that [Continental] and Hartford
allocated, and it explains . . . why there are differ-
ences between what I allocated and what they
allocated.’’
During Posner’s testimony at trial, Vanderbilt’s coun-
sel moved to admit the master document known as
plaintiff’s exhibit V-781-285 into evidence. At that time,
counsel for Mt. McKinley objected on the ground that
‘‘there’s no basis for its admissibility, it’s irrelevant;
information relied upon by an expert doesn’t come in
unless there’s some kind of independent basis. And this
contains hearsay.’’ In response, Vanderbilt’s counsel
noted that the chart documented the methodology by
which Posner reached his expert opinion, stating that
it demonstrated ‘‘the steps he took to analyze and form
that opinion . . . .’’ The court overruled the objection
and admitted that chart into evidence. In so doing, the
court expressly noted that the defendants reserved the
right to challenge the substance of that underlying infor-
mation, stating: ‘‘Defendants certainly [are] entitled to,
on cross-examination, challenge any accuracy issues,
the information used in formulating an opinion, any
other documents that were relied upon in formulating
that opinion.’’
When Vanderbilt subsequently sought to introduce
Posner’s ‘‘reconciliation chart’’ into evidence, counsel
for Mt. McKinley again objected, stating in relevant part:
‘‘Hearsay, again . . . this is a document an expert
relied upon, it’s not admissible unless there’s an inde-
pendent hearsay exception.’’ In response, the court
inquired, ‘‘Mr. Posner, let me ask you one more question.
This material that you reviewed, did you rely upon it
in formulating your opinions?’’ Posner answered in the
affirmative. The court then overruled the objection and
permitted the reconciliation chart to be admitted into
evidence. Vanderbilt later moved to introduce the two
charts containing Posner’s allocation models with dif-
fering default dates of first exposure, and Mt. McKinley
once again objected on hearsay grounds. The court
overruled that objection, noting that ‘‘these [two charts]
were born of the master document that has been admit-
ted into evidence already.’’ Mt. McKinley now chal-
lenges the propriety of those evidentiary
determinations.
As a general matter, we note that our trial courts are
afforded ‘‘wide discretion in determining whether to
admit expert testimony and, unless the trial court’s deci-
sion is unreasonable, made on untenable grounds . . .
or involves a clear misconception of the law, we will
not disturb its decision.’’ (Internal quotation marks
omitted.) Fleming v. Dionisio, 317 Conn. 498, 505, 119
A.3d 531 (2015). Nevertheless, a crucial predicate to
the admissibility of such testimony is the showing of
sufficient foundational facts for the expert’s opinion.
Conn. Code Evid. § 7-4 (a); see also Viera v. Cohen, 283
Conn. 412, 444–49, 927 A.2d 843 (2007).
Titled, ‘‘Bases of opinion testimony by experts,’’ § 7-
4 (b) of the Connecticut Code of Evidence provides:
‘‘The facts in the particular case upon which an expert
bases an opinion may be those perceived by or made
known to the expert at or before the proceeding. The
facts need not be admissible in evidence if of a type
customarily relied on by experts in the particular field
in forming opinions on the subject. The facts relied on
pursuant to this subsection are not substantive evi-
dence, unless otherwise admissible as such evidence.’’
The commentary to that rule of evidence explains that
§ 7-4 (b) ‘‘expressly forbids the facts upon which the
expert based his or her opinion to be admitted for their
truth unless otherwise substantively admissible under
other provisions of the Code. Thus, subsection (b) does
not constitute an exception to the hearsay rule or any
other exclusionary provision of the Code. However,
because subsection (a) requires disclosure of a suffi-
cient factual basis for the expert’s opinion, and because
the cross-examiner often will want to explore the
expert’s factual basis further, subsection (b) does not
preclude the trial court, in its discretion, from admitting
the underlying facts relied on by the expert for the
limited purpose of explaining the factual basis for the
expert’s opinion.’’ Conn. Code Evid. § 7-4, commentary;
accord 2 C. McCormick, Evidence (6th Ed. 2006)
§ 324.3, pp. 417–18 (‘‘[a]n expert often should be
allowed to disclose to the [trier of fact] the basis for
an opinion because otherwise the opinion is left unsup-
ported with little way for evaluation of its correctness’’).
Consistent with that authority, our appellate courts
have construed that rule of evidence to permit the
admission of otherwise inadmissible hearsay evidence
‘‘for the limited purpose of explaining the factual basis
for the expert’s opinion.’’ (Emphasis in original.) Mil-
ford v. Maykut, 117 Conn. App. 237, 241 n.7, 978 A.2d
570, cert. denied, 294 Conn. 906, 982 A.2d 1080 (2009);
see also Milliun v. New Milford Hospital, 310 Conn.
711, 728, 80 A.3d 887 (2013) (‘‘[t]he fact that [an expert’s]
report includes hearsay statements . . . would not bar
the report’s admission on that basis unless those state-
ments were being offered for substantive purposes, i.e.,
the truth of the matter asserted’’); C. Tait & E. Prescott,
Connecticut Evidence (5th Ed. 2014) § 7.9.4 (b), p. 475
(‘‘such hearsay information is used solely to show the
basis for the expert opinion and is not independently
admissible unless within a recognized hearsay
exception’’).
Accordingly, the critical inquiry in the present case
entails consideration of Vanderbilt’s purpose in offering
the charts into evidence. As this court has noted,
‘‘[i]nformation on which an expert relied that is not
offered for its truth but is offered to show that the
expert relied on it is not hearsay and may be the subject
of proper cross-examination to test the basis of that
expert’s opinion.’’ State v. Henry, 27 Conn. App. 520,
529, 608 A.2d 696 (1992). When a party introduces evi-
dence ‘‘to show the basis of [the] expert opinion,’’ rather
than for the truth of the matter asserted, the evidence
properly may be admitted, as such evidence does not
constitute hearsay. Id., 530; compare State v. O’Brien-
Veader, 318 Conn. 514, 536, 122 A.3d 555 (2015) (trial
court declined to admit medical records ‘‘because they
were not facts relied upon by [the expert] in forming
his opinion’’), with Milliun v. New Milford Hospital,
supra, 310 Conn. 728–29 (medical reports admissible
because offered as evidence of information on which
experts relied in formulating opinion).
When Mt. McKinley first objected to the introduction
of the ‘‘master document’’ chart, its counsel began by
acknowledging that ‘‘this is data the expert relied
upon’’—precisely the point later articulated by oppos-
ing counsel. Mt. McKinley nonetheless argued that the
chart contained hearsay and that ‘‘no basis for its admis-
sion’’ existed. In response, Vanderbilt did not proffer
a hearsay exception or request that the chart and its
contents be admitted for the truth of the matter
asserted. Instead, its counsel informed the court that
the chart documented the methodology and information
underlying Posner’s expert opinion, stating that ‘‘the
expert has testified that he had an opinion and [this
chart details] the steps he took to analyze and form
that opinion . . . .’’ In so doing, Vanderbilt plainly indi-
cated to the court that it was offering the master docu-
ment as evidence of the basis of Posner’s expert
opinion. Such evidence is admissible in the discretion
of the trial court. Pickel v. Automated Waste Disposal,
Inc., 65 Conn. App. 176, 192–93, 782 A.2d 231 (2001);
see also Conn. Code Evid. § 7-4, commentary (§ 7-4 [b]
‘‘does not preclude the trial court, in its discretion, from
admitting the underlying facts relied on by the expert
for the limited purpose of explaining the factual basis
for the expert’s opinion’’); C. Tait & E. Prescott, supra,
§ 7.9.3, p. 474 (discretion afforded to court pursuant
to § 7-4 [b] may be ‘‘exercised to admit such facts on
direct examination’’).
The question, then, is whether the court abused its
discretion in admitting the master document and other
charts into evidence. We conclude that it did not.
Because those materials were introduced as evidence
of the information on which Posner relied in formulat-
ing his expert opinion, they were not hearsay. State v.
Henry, supra, 27 Conn. App. 529–30. Moreover, the
court, in exercising its discretion to admit that evidence,
informed the parties, consistent with appellate prece-
dent, that such underlying information was subject to
cross-examination to test the basis of the expert’s opin-
ion. See id., 529.
Although it is true that the court’s admission of the
master document and other charts was not accompa-
nied by reference to the limited nature of such admis-
sions, the court earlier had indicated to the parties that
it appreciated that distinction. Prior to the introduction
of any of the charts at issue, the court apprised the
parties as follows: ‘‘[T]his is a court trial, and to that
extent . . . I’ll reiterate that the parties are not pre-
cluded from making any sort of objection, but certainly
there will be times that there may be either opinions
offered from an expert or from a fact witness that may
either bleed over into an area that might be deemed
[inadmissible] or something that’s not properly an area
of inquiry on, but sitting as the trier of fact, I think I
can say with some measure of confidence that the court
pretty much is able to discern what is proper evidence
before it and what is not. . . . [A]s a general matter,
I think the court usually is able to sift through what
should be properly before it and what isn’t. . . . I’m
not saying that there shouldn’t have been any objection,
please don’t misunderstand me at all; this is sort of just
guidance for the future from here on out.’’ The court
also informed the parties that ‘‘as I sit here and listen
to testimony and evidence . . . I’m also sifting through
it and [considering it] from a standpoint of, is this prop-
erly admissible to the court or not.’’ As a result, the
potential ‘‘danger,’’ as one commentator termed it; 2 C.
McCormick, supra, § 324.3, p. 419; of jurors improperly
utilizing otherwise inadmissible information for the
truth of the matter asserted was absent in this court
trial.
Furthermore, at no point in the proceedings before
the trial court did any party bring § 7-4 (b) of the Con-
necticut Code of Evidence or the issue of limited admis-
sibility of the charts to the court’s attention. ‘‘It is well
established that where the record is silent, a reviewing
court will not presume error.’’ State v. Brown, 145 Conn.
App. 174, 187 n.13, 75 A.3d 713, cert. denied, 310 Conn.
936, 79 A.3d 890 (2013). In the face of such silence,
we presume, consistent with its earlier advisory to the
parties, that the court, in accordance with § 7-4 (b),
properly admitted the charts as evidence of the basis
for Posner’s expert opinion, and not for the truth of
the matter contained therein. See State v. Carter, 122
Conn. App. 527, 533, 998 A.2d 1217 (2010) (‘‘[a]bsent
evidence to the contrary, we presume that the court
properly applied [the] law’’), cert. denied, 300 Conn.
915, 13 A.3d 1104 (2011). That presumption is buttressed
by the fact that, when Mt. McKinley later objected to
the admission of the ‘‘reconciliation chart,’’ the court
immediately asked Posner whether it constituted mate-
rial that he relied upon in ‘‘formulating’’ his expert opin-
ion. Only after Posner answered in the affirmative did
the court rule that the chart was admissible.
In determining whether the trial court has abused its
discretion, ‘‘we make every reasonable presumption in
favor of upholding the trial court’s ruling, and only
upset it for a manifest abuse of discretion.’’ (Internal
quotation marks omitted.) Chief Information Officer
v. Computers Plus Center, Inc., 310 Conn. 60, 98, 74 A.3d
1242 (2013). No manifest abuse of discretion emanates
from the record before us. Accordingly, we conclude
that the court properly admitted the charts into evi-
dence for the limited purpose of explaining the factual
basis of the expert’s opinion, in adherence to § 7-4 of
our Code of Evidence.
Even if we were to conclude that the admission of
the charts was improper, Mt. McKinley still has not met
its burden of establishing reversible error. See Brook-
field v. Candlewood Shores Estates, Inc., 201 Conn. 1,
7, 513 A.2d 1218 (1986) (‘‘[t]he burden is on the appellant
to prove harmful error’’). ‘‘When a court commits an
evidentiary impropriety, we will reverse the trial court’s
judgment only if we conclude that the trial court’s
improper ruling harmed the plaintiffs. . . . In a civil
case, a party proves harm by showing that the improper
evidentiary ruling likely affected the outcome of the
proceeding.’’ (Internal quotation marks omitted.) Doe
v. Hartford Roman Catholic Diocesan Corp., 317 Conn.
357, 396–97, 119 A.3d 462 (2015).
No such showing has been made in the present case.
First, we note that the trial court assured the parties
prior to the introduction of the charts in question that,
although there might arise evidentiary matters ‘‘that
might be deemed [inadmissible] or something that’s not
properly an area of inquiry,’’ the court ‘‘sitting as the
trier of fact . . . can say with some measure of confi-
dence that [it] is able to discern what is proper evidence
before it and what is not.’’ That advisory suggests that
the court both appreciated the delicacy of the eviden-
tiary issues before it and remained vigilant in its consid-
eration of that evidence as trial proceeded. Second, to
paraphrase this court’s decision in DeNunzio v. DeNun-
zio, 151 Conn. App. 403, 414, 95 A.3d 557 (2014), aff’d,
320 Conn. 178, 128 A.3d 901 (2016), our review of the
record reveals no evidence that the court improperly
considered inadmissible hearsay with respect to the
charts, but rather considered their contents as informa-
tion that Posner considered in formulating his opinion.
In particular, our review of the court’s thorough memo-
randum of decision in the Phase II proceeding discloses
no reliance by the court on those charts. We thus pre-
sume that the court did not improperly consider any
such inadmissible hearsay as substantive evidence.
Third, much of the information contained in the charts
prepared by Posner is merely cumulative of other docu-
mentary and testimonial evidence in the record. Last,
to the extent that Mt. McKinley and other defendants
have articulated a concern that Vanderbilt might seek
to utilize the charts as substantive evidence for the
truth of the matter asserted in future phases of this
litigation, our decision today should dispel that notion.
We have concluded that the trial court properly admit-
ted those charts into evidence for the limited purpose
of explaining the basis of Posner’s expert opinion, and
not for the truth of the information contained therein.
At present, those charts cannot be utilized in any other
manner without running afoul of § 7-4 (b) of the Con-
necticut Code of Evidence. We therefore conclude that
Mt. McKinley has not established that the admission of
the charts likely affected the outcome of the proceed-
ing, and thus cannot demonstrate harmful error.
B
Exhaustion of Primary Policies
In part III of this opinion, we considered certain
claims that pertained to the exhaustion of Vanderbilt’s
primary insurance policies. We now address two addi-
tional claims raised by Mt. McKinley regarding the trial
court’s finding that Continental’s 1968–1977 primary
policies and Hartford’s 1977–1986 primary policies have
been exhausted. Mt. McKinley contends that the court
failed to determine whether all of the underlying claims
constituted ‘‘products’’ claims, which erode the aggre-
gate policy limits, or whether some might have consti-
tuted premises/operations claims, which do not erode
the limits in the Continental policies and which are not
covered by the Hartford policies. Mt. McKinley also
challenges the court’s conclusion that Hartford’s alloca-
tion to indemnity of a portion of the contribution pay-
ment that it made to Continental pursuant to the 2002
allocation agreement was reasonable.110 We do not
agree.
1
Products Claims
Mt. McKinley maintains that the court failed to deter-
mine whether all of the underlying claims constituted
‘‘products’’ claims under the primary policies. The
record before us includes copies of the policies in ques-
tion. Those policies indicate that the Hartford policies
at issue provide coverage only for claims falling within
the ‘‘completed operations’’ and ‘‘products’’ hazards
specified therein. Similarly, only payments on claims
covered by the ‘‘completed operations’’ and ‘‘products’’
hazards count against the aggregate limit of the Conti-
nental policies. In its principal appellate brief, Mt.
McKinley distinguishes such ‘‘products’’ claims from
those that ‘‘fall outside of the products-completed oper-
ations hazards,’’ which it refers to as ‘‘nonproducts’’
claims.111 It contends that either the policyholder or the
primary insurers bear the burden of establishing that
the primary policies have been exhausted before the
secondary policies can be triggered, and that it is impos-
sible to know whether the primary policies were
exhausted until the court determines whether all of the
payments allocated to those policies were in fact for
covered products claims.
At the Phase II trial, the primary insurers proffered
evidence indicating that the underlying claims for which
they provided defense and indemnity coverage involved
products claims. The court heard testimony from Peter
A. Pogue, a claims consultant with Resolute Manage-
ment, Inc., which administered asbestos claims on
behalf of Continental. Pogue handled the Vanderbilt
account and testified that he had examined the primary
insurance policies issued by Continental. In reviewing
documentation of the payments made by Continental
for underlying claims, Pogue detailed the payments
made ‘‘for asbestos related and . . . bodily injuries’’
pursuant to the ‘‘completed operations’’ and ‘‘products’’
hazards. Pogue explained that Continental predicated
its determination that the aggregate limits of its policies
were reached on those payments.
The court also heard testimony from Lawrence
Farber, an assistant vice president in Hartford’s com-
plex claims group who oversees ‘‘various types of com-
plex claims, including asbestos claims, pollution claims
. . . typically claims that may span multiple policy peri-
ods.’’ Questioned about Hartford’s duties to defend and
indemnify, Farber explained that ‘‘[e]very claim is a
case-by-case basis . . . . [I]f we looked at our policy
and the facts presented to us, if we determine we had
a duty, we would uphold that duty.’’ Farber testified
that Vanderbilt had tendered bodily injury claims to
Hartford under the primary insurance policies, which
he confirmed were ‘‘products claims.’’ Farber explained
that his knowledge of Vanderbilt’s account ‘‘comes from
my review of all the claim files. It comes from talking
to the [claims] handlers that were involved with the
handling of the claim. It comes from my review of the
policies, review of the loss runs.’’112 Farber confirmed
that he also conducted a review of ‘‘the underlying
claims file . . . to determine whether Hartford under-
stood that they were paying products claims versus
other types of claims with respect to the Vanderbilt
account.’’ On that review, Farber concluded ‘‘that they
were products claims.’’
In its Phase II decision, the court found that ‘‘Farber
was credible and persuasive in demonstrating . . .
that the total amount of indemnity payments made by
Hartford were sufficient to exhaust its policies . . . .’’
The court emphasized that ‘‘[n]o evidence contradicted
either Farber’s testimony or Hartford and [Continen-
tal’s] loss runs. . . . There is no suggestion anywhere
on the record that Hartford and [Continental] did any-
thing other than act reasonably and in good faith
throughout the duration of their defense and indemnity
of the plaintiff.’’ The court also credited Pogue’s testi-
mony ‘‘that [Continental] has paid indemnity well in
excess of’’ the aggregate limits of its primary policies
and Farber’s testimony that Hartford ‘‘had paid indem-
nity in excess of [the limits of its policies] throughout
the years.’’ Accordingly, the court found that ‘‘the Hart-
ford and [Continental] primary policies for the periods
March 3, 1977 to March 3, 1986, and January 1, 1968 to
March 3, 1977, respectively, are exhausted . . . .’’
Although the court did not explicitly address the distinc-
tion between products and nonproducts claims, implicit
in its decision is the determination that those policies
were exhausted through payments for covered products
claims. The testimony of Farber and Pogue, which the
court expressly credited in finding the policies to be
exhausted, substantiates that determination.
‘‘In Connecticut, our appellate courts do not presume
error on the part of the trial court. . . . Rather, the
burden rests with the appellant to demonstrate revers-
ible error.’’ (Citation omitted; internal quotation marks
omitted.) Jalbert v. Mulligan, 153 Conn. App. 124, 145,
101 A.3d 279, cert. denied, 315 Conn. 901, 104 A.3d
107 (2014). Mt. McKinley has not met that burden. It
furnished no evidence at trial, and has identified no
evidence on appeal, indicating that any of the underly-
ing claims fell outside the completed operations and
products hazards of the primary policies.113 Lillian
Philburn, a claims manager who handled Vanderbilt’s
account on behalf of Mt. McKinley, confirmed at trial
that Mt. McKinley received ‘‘all of the claim[s] files’’
from Hartford in 2009—years prior to the Phase II trial.
She further testified that Mt. McKinley had a third party
review those files. Yet Mt. McKinley provided no evi-
dence at trial on which the court could find that any
of those claims did not qualify for coverage under the
policies at issue. On the evidence before it, therefore,
the court reasonably could determine that the underly-
ing claims constituted products claims pursuant to the
primary policies.
2
Application of 2002 Allocation Agreement
Mt. McKinley also contests the court’s determination
that the primary insurers reasonably allocated Hart-
ford’s settlement payment to Continental pursuant to
their 2002 allocation agreement. Under that agreement,
a portion114 of Hartford’s payment was allocated to
indemnity, and that share then was allocated evenly
across all of the Hartford policies at issue. Mt. McKinley
contends that this allocation scheme was unreasonable
and, specifically, that the indemnity payments should
have been allocated on a claim by claim basis in light
of the allocation block and date of first exposure unique
to each underlying action.
This claim largely is subsumed by our discussion in
part III C 1 of this opinion, in which we affirm the trial
court’s decision to uphold the allocation agreement,
which agreement encompasses the contribution pay-
ment made by Hartford. In so doing, we concluded that
the trial court properly determined that the allocation
agreement was objectively reasonable at the time of its
adoption, in accordance with industry standards, and
was undertaken in good faith.
In rejecting Mt. McKinley’s claim, the trial court indi-
cated that it was ‘‘unwilling to second-guess Hartford’s
allocation to indemnity of a portion of the settlement’’
with Continental. The court credited Farber’s testimony
that such allocation was done reasonably and in good
faith. Asked how that allocation was reached, Farber
explained that ‘‘[i]nformation was exchanged between
[Hartford and Continental], and it was reviewed and
we determined that the [specific sum] would be our
appropriate share’’ of the indemnity expenses incurred
by Continental. The court also credited Huffer’s testi-
mony that the allocation of the indemnity portion of
the contribution payment ‘‘across the coverage block’’
was ‘‘fair and reasonable.’’ In addition, the court relied
on the loss runs of Continental and Hartford, which it
found ‘‘provided evidence that both insurers deter-
mined the moneys from the settlement allocated to
indemnity represented a good faith estimation of the
indemnity payments Hartford owed to [Continental].’’
Last, the court emphasized that ‘‘there was insufficient
credible evidence presented by the excess and/or
umbrella insurers to demonstrate that Hartford’s alloca-
tion of the settlement amount was improper . . . .’’ We
concur with that assessment. Our review of the record
reveals no evidence that the primary insurers intention-
ally allocated payments so as to prematurely exhaust
their primary policies and shift their obligations onto
the secondary insurers. We therefore refuse to disturb
the court’s determinations in this regard.
C
Duty to Defend Under Old Republic’s
Excess Policies
Apart from joining several issues raised by Mt. McKin-
ley and Continental in their cross appeals, Old Republic
presents one distinct matter for our consideration in
its capacity as a cross appellant. Consistent with a stipu-
lation it has entered into with Vanderbilt, Old Republic
asks this court to direct the trial court on remand to
consider the issue of its defense obligations prior to
commencing the Phase III trial.
The following additional procedural facts are relevant
to this request. Old Republic issued two high level
excess insurance policies to Vanderbilt for the periods
of March 3, 1981 through March 3, 1982, and March 3,
1982 through March 3, 1983, respectively. When this
litigation ensued, Continental named Old Republic as
a defendant in its third party complaint.
Prior to the commencement of the Phase I trial, Old
Republic joined a motion for summary judgment filed
by defendant Certain London Market Insurance Compa-
nies. That motion alleged in relevant part that the poli-
cies in question do not ‘‘provide for a defense
obligation’’ and only require those excess insurers ‘‘to
reimburse [Vanderbilt] for defense costs within limits
for covered claims.’’ By order dated July 13, 2012, the
court denied that motion, stating simply that on ‘‘a
review of [the] evidence properly presented, the court
finds that there remains a genuine issue relative to one
or more material facts.’’
Trial in Phases I and II of this proceeding followed.
As noted in its memorandum of decision, the court,
upon motion of the parties, ‘‘agreed to bifurcate Phase
II of the trial so as to remove the issues of damages
and reimbursement of any overpayment of defense and
indemnity costs [which] will be considered following
the completion of Phase II.’’
The Phase II trial commenced on May 15, 2013, and
continued over the course of fourteen days. Old Repub-
lic thereafter filed a posttrial brief ‘‘concerning the issue
of how [its] policies pay defense costs within limits for
covered claims.’’ In that brief, Old Republic maintained
that its ‘‘policies are excess indemnity policies that con-
tain no duty to defend, and only provide for indemnifica-
tion or reimbursement of certain loss and expense
payments associated only with covered claims. . . .
[T]he Old Republic policies are stand-alone policies
that are governed by their own terms, conditions and
exclusions, and are distinct from the underlying primary
and umbrella policies. Thus, while the Old Republic
policies ‘follow form’ to the [Mt. McKinley] umbrella
policies to a limited extent, they do not have the same
obligation to pay concerning the defense of underlying
claims, including the payment of defense costs as
incurred for uncovered claims.’’ Relying on the distinc-
tion between liability and indemnity policies drawn by
our Supreme Court in Cohn v. Pacific Employers Ins.
Co., 213 Conn. 540, 546–47, 569 A.2d 544 (1990),115 Old
Republic claimed that the plain language of the excess
policies it issued to Vanderbilt indicate that they
imposed ‘‘an ‘indemnity only’ obligation.’’ Old Republic
thus asked the court to find, among other things, that
its policies ‘‘contain no affirmative duty to [defend] or
to pay defense costs as incurred’’ by Vanderbilt, and
that its policies ‘‘only indemnify for defense expenses
incurred and paid for covered claims . . . .’’ The court
declined to address those claims in its Phase II memo-
randum of decision.
In its preliminary statement of issues in AC 37145,
Old Republic averred that the court improperly (1)
‘‘denied Old Republic’s motion for summary judgment
declaring defense obligations and payment of defense
costs within limits for covered claims,’’ and (2) ‘‘failed
to address the issue of defense obligations and payment
of defense costs in the Old Republic policies during
Phase II of trial, but decided that it would do so during
a later phase of trial . . . .’’ Vanderbilt subsequently
moved to strike those issues from Old Republic’s inter-
locutory appeal, claiming they were beyond the scope
of what the trial court permitted the parties to raise.
This court disagreed, and thus denied that motion.
Prior to oral argument before this court, Old Republic
and Vanderbilt entered into a stipulation, whereby Old
Republic agreed to withdraw those two issues. Vander-
bilt, in turn, agreed not to object to Old Republic’s
request that the trial court on remand consider the
substance of those two issues ‘‘prior to any additional
[p]hase of [t]rial for issues not yet addressed during
the first two [p]hases of [t]rial.’’ The stipulation further
provides that ‘‘[b]oth parties reserve all substantive
rights as to issues of law and facts.’’ That stipulation
and its corresponding withdrawal were filed with this
court on August 6, 2015.
Old Republic now asks this court to direct the trial
court accordingly. As it states in its principal appellate
brief, ‘‘it is not seeking any substantive ruling from this
court regarding any defense obligations that [its excess
policies] may or may not have . . . . Old Republic
respectfully is seeking an order from this court to
require resolution of this issue prior to the commence-
ment of any further phases of trial. . . . Consistent
with the parties’ and the trial court’s prior representa-
tions, briefing and orders . . . the issue of any defense
obligations of Old Republic should be decided on rele-
vant briefs, and prior to any further phase of trial in
this matter. . . . Moreover, there are no claims pend-
ing against Old Republic that involve the reimbursement
and/or overpayment issues that have been specified for
Phase III of trial in this matter, and thus such a ruling
likely would facilitate the streamlining of this matter,
as Old Republic would not have to be present . . . at
that phase of trial.’’ (Citations omitted.)
We appreciate the rationale for Old Republic’s
request. Should the trial court conclude that the excess
insurance policies Old Republic issued to Vanderbilt
are indemnity only policies that impose no duty to
defend, that conclusion certainly would alter the court’s
analysis of Old Republic’s obligations, and hence role,
in this litigation. See Cohn v. Pacific Employers Ins.
Co., supra, 213 Conn. 546–47. Moreover, we note that
these interlocutory appeals involve dozens of parties.
Since the stipulation was filed almost eighteen months
ago, no party has raised any issue or objection thereto.
In light of the foregoing, the trial court on remand is
strongly encouraged to consider, in its discretion, the
extent of Old Republic’s defense obligations pursuant
to its excess policies prior to the commencement of
the Phase III trial.
D
Duty to Defend Under Continental’s 1965–1968
and 1977–1978 Excess Policies
Continental next asks this court to conclude that
it has no duty to defend Vanderbilt under the excess
insurance policies known as RDU 9433526 and RDX
3652404, which it issued to Vanderbilt for the periods
of January 1, 1965 through January 1, 1968, and May
1, 1977 through March 3, 1978, respectively. For two
reasons, we decline that request.
First, the record amply demonstrates that the trial
court, in exercising its discretion to bifurcate the issues
at trial, expressly deferred consideration of the claim
now advanced by Continental in this interlocutory
appeal. The following procedural history is relevant to
our analysis. Prior to the commencement of the Phase
I trial, Continental filed a motion for summary judg-
ment, in which it sought, among other things, a declara-
tion that the aforementioned excess policies ‘‘do not
require [Continental] to pay Vanderbilt’s defense costs
relative to the underlying silica, talc, and/or asbestos
related bodily injury suits . . . .’’ Vanderbilt opposed
that motion with respect to policy RDU 9433526, raising
multiple objections thereto. At the same time, Vander-
bilt voiced no objection with respect to policy RDX
3652404. As it stated in its memorandum of law in oppo-
sition to Continental’s motion for summary judgment,
‘‘Vanderbilt acknowledges that the [Continental] excess
policy from May 1, 1977 to March 3, 1978 (RDX 3652404),
contains language that clearly provides that [Continen-
tal] has no defense obligation to Vanderbilt.’’ In these
appeals, Vanderbilt has not articulated any opposition
to Continental’s claim with respect to policy RDX
3652404.
The trial court did not rule on Continental’s motion
for summary judgment. Rather, the court entered a
series of orders that divided the proceeding into distinct
phases. As the court recounted in its Phase I memoran-
dum of decision, it ‘‘bifurcated the action so as to
remove from the court trial any claim of damages for
recovery from [Vanderbilt] for the overpayment of
defense and indemnity costs.’’ The court further stated:
‘‘To be clear, the issues of which parties were specifi-
cally obligated to provide for the defense . . . of
underlying claims in any particular time period is left
to later phases of the trial.’’
The court also did not consider what it termed ‘‘issues
of defense obligations’’ during the Phase II trial. As the
court expressly indicated in its Phase II memorandum
of decision, ‘‘such issues are beyond the limited scope
of issues considered in Phase II and are better suited
to be fully addressed in Phase III. That latter phase
shall necessarily determine the scope of any defense
. . . obligations . . . .’’ Continental thereafter filed a
motion to reargue the issue of its defense obligations
under the RDU 9433526 excess policy. The court denied
that motion, stating in relevant part that Continental’s
‘‘motion asks the court to issue a ruling which the court
has expressly deferred, for the purpose of judicial econ-
omy, until the completion of a later phase of the trial.
The relief sought relative to the court’s findings on the
limited issues designated for consideration in Phase II
seeks to elicit a substantive expansion of the scope of
the court’s findings.’’
It is well established that the trial court is vested
with ample discretion to bifurcate a civil trial. ‘‘Pursuant
to General Statutes § 52-205116 and Practice Book § 15-
1,117 the trial court may order that one or more issues
that are joined be tried before the others. The interests
served by bifurcated trials are convenience, negation
of prejudice and judicial efficiency. . . . Bifurcation
may be appropriate in cases in which litigation of one
issue may obviate the need to litigate another issue.
. . . The bifurcation of trial proceedings lies solely
within the discretion of the trial court.’’ (Citation omit-
ted; footnotes in original; internal quotation marks omit-
ted.) Barry v. Quality Steel Products, Inc., 263 Conn.
424, 448–49, 820 A.2d 258 (2003); see also Kervick v.
Silver Hill Hospital, supra, 309 Conn. 716 (review of
trial court decision on motion to bifurcate governed by
abuse of discretion standard). ‘‘Accordingly, appellate
review is limited to a determination of whether this
discretion has been abused. . . . In reviewing claims
that the trial court abused its discretion [in bifurcating
certain issues at trial] the unquestioned rule is that great
weight is due to the action of the trial court and every
reasonable presumption should be given in favor of its
correctness; the ultimate issue is whether the court
could reasonably conclude as it did . . . .’’ (Citation
omitted; internal quotation marks omitted.) Saczynski
v. Saczynski, 109 Conn. App. 426, 428, 951 A.2d 670
(2008).
The record before us indicates that the trial court,
in dividing this civil litigation into multiple phases,
deliberately excised the ‘‘issues of defense obligations’’
from the Phase I and Phase II trials. The court further
explained that those issues were ‘‘better suited to be
fully addressed in Phase III’’ of the proceedings. At the
time that it entered the bifurcation orders, the court
was confronted by a veritable mountain of pleadings,
motions, and requests. Brimming with a multitude of
parties and intricate issues, this matter is the quintes-
sence of complex litigation. In such instances, our rules
of practice permit the trial court to ‘‘enter any appro-
priate order which facilitates the management of the
complex litigation cases.’’ (Emphasis added.) Practice
Book § 23-14.
The court, in fashioning its bifurcation orders, empha-
sized that there was ‘‘a need to provide additional proce-
dures . . . to resolve [the parties’] claims and to
promote convenience, negation of prejudice and judi-
cial efficiency . . . .’’ The court also observed that the
division of the matter into multiple phases ‘‘may obviate
the need to litigate’’ certain remaining issues. Given the
magnitude—both in terms of scope and substance—of
the matters before it, we cannot conclude that the court
abused its discretion in dividing this civil litigation into
multiple phases.118 We likewise perceive no abuse of
that discretion in the court’s decision to defer consider-
ation of the ‘‘issues of defense obligations’’ until the
Phase III proceeding, and thus we refuse to disturb that
determination on appeal.119
Continental’s invitation for this court to decide the
issue of its duty to defend under the excess policies
in question is problematic for another reason, as it is
procedurally improper. These interlocutory appeals
were commenced pursuant to the strictures of Practice
Book § 61-4. That rule of practice permits such appeals
‘‘only if the trial court makes a written determination
that the issues resolved by the judgment are of such
significance to the determination of the outcome of the
case that the delay incident to the appeal would be
justified, and the chief justice or chief judge of the court
having appellate jurisdiction concurs. . . .’’120 (Empha-
sis altered.) Practice Book § 61-4 (a). As one judge
noted, ‘‘the purpose of § 61-4 is to create a narrow
exception to our final judgment rule for those rare and
special cases where interlocutory review of a trial
court’s pretrial ruling will resolve or greatly streamline
the resolution of the entire case. In those limited cir-
cumstances, the purpose of the final judgment rule—
to promote efficiency in the handling of cases by
avoiding the added cost, delay and administrative bur-
den of piecemeal litigation—is better served by granting
the right to an immediate appeal than, as usual, postpon-
ing any appeal until the rights of all parties have been
fully adjudicated in the trial court. Only if the trial judge,
who knows the case personally and understands the
interplay among its several claims, and the chief judge
of the appellate court having jurisdiction, who knows
the current status of his or her appellate docket, are
mutually satisfied that the possible benefits of early
appellate review exceed the likely costs and burdens
of such review should the motion be granted.’’ Share-
America, Inc. v. Ernst & Young, LLP, Superior Court,
judicial district of Waterbury, Docket No. CV-93-
0150132-S (July 23, 1999) (Sheldon, J.) (25 Conn. L.
Rptr. 160, 162).
In the present case, the issue of Continental’s duty
to defend under the excess insurance policies in ques-
tion was not resolved by the trial court. Rather, the
court deliberately and expressly deferred consideration
of that issue, which we previously have concluded did
not constitute an abuse of its discretion. The court
likewise did not furnish a written determination that
the issue was of such significance to merit the extraordi-
nary review provided by Practice Book § 61-4. The issue
of Continental’s duty to defend under those excess poli-
cies, therefore, is not properly part of these interlocu-
tory appeals. We therefore decline its request to decide
that issue. Like Old Republic, with its somewhat related
claim regarding its duty to defend, Continental will be
able to pursue this issue on remand in the trial court.121
See, e.g., 36 DeForest Avenue, LLC v. Creadore, 99
Conn. App. 690, 705, 915 A.2d 916 (‘‘[i]nsofar as [an]
appeal is interlocutory, if the plaintiff wants to pursue
this claim, there remains the opportunity to do so’’),
cert. denied, 282 Conn. 905, 920 A.2d 311 (2007).
VI
CONCLUSION
The rulings of the trial court are reversed only with
respect to the determinations that (1) Vanderbilt is
responsible for defense costs for the period of March
3, 1993 through April 24, 2007, (2) a default date of first
exposure of January 1, 1962, applies to pending and
future claims, and (3) the occupational disease exclu-
sions in certain secondary policies apply only to claims
brought by Vanderbilt’s own employees; the proper allo-
cation methodology and the prospective application of
that methodology are clarified as set forth herein; and
the case is remanded for further proceedings consistent
with this opinion. The rulings are affirmed in all
other respects.
APPENDIX A
1
The action was filed by R.T. Vanderbilt Company, Inc. During the trial
court proceedings, the court granted that company’s motion to substitute
its successor, Vanderbilt Minerals, LLC, as the party plaintiff. For conve-
nience, we refer to both entities as ‘‘Vanderbilt’’ throughout this opinion.
2
Moreover, unlike most appeals, this case does not come to us with a
fully developed factual record and a final judgment. This presents special
challenges in crafting an opinion and can be expected to present special
challenges to the trial court, which will be tasked with applying the principles
set forth herein on remand and during the next phase of the proceedings.
3
See footnote 101 of this opinion and accompanying text. Many of the
secondary policies follow form to the Hartford and Continental primary
policies. See footnote 91 of this opinion.
4
The operative complaint is the modified seventh amended complaint.
5
Throughout this opinion, we use the terms ‘‘long latency,’’ ‘‘long-tail,’’
and ‘‘progressive injury’’ interchangeably. Those terms refer to the fact that
toxic tort claims typically allege that exposure to toxins such as asbestos
causes a series of continuing, indivisible injuries that develop gradually over
time but may not manifest for many years. See State v. Continental Ins.
Co., 55 Cal. 4th 186, 195–96, 281 P.3d 1000, 145 Cal. Rptr. 3d 1, as modified,
2012 Cal. LEXIS 8788 (September 19, 2012); Y. Colon, ‘‘Pay It Forward:
Allocating Defense and Indemnity Costs in Environmental Liability Cases
in California,’’ 14 Cal. Ins. L. & Reg. Rep., no. 3, 2002, n.24 and accompa-
nying text.
6
See footnote 28 of this opinion.
7
Although Vanderbilt lost those policies as well, Continental stipulated
at trial to their existence.
8
See footnote 54 of this opinion.
9
Everest filed an immediate appeal from the trial court’s Phase I and
Phase II rulings on the ground that the rulings constituted a final judgment
as to it. Vanderbilt and other defendants were subsequently granted permis-
sion to file interlocutory appeals pursuant to Practice Book § 61-4 (a), which
provides in relevant part that an interlocutory ruling is considered to be an
appealable final judgment when ‘‘the trial court makes a written determina-
tion that the issues resolved by the judgment are of such significance to
the determination of the outcome of the case that the delay incident to the
appeal would be justified, and the chief justice or chief judge of the court
having appellate jurisdiction concurs. . . .’’
For purposes of briefing, Vanderbilt has been designated as the appellant,
and defendants Mt. McKinley and Everest have been designated as the lead
cross appellants-appellees. The other defendants have been designated as
cross appellants-appellees.
We also note that approximately two years after the commencement
of these appeals, Clearwater Insurance Company was substituted for Mt.
McKinley Insurance Company. TIG Insurance Company thereafter was sub-
stituted for Clearwater Insurance Company. For clarity, we refer to that
party as Mt. McKinley throughout this opinion.
10
Many of the claims raised on cross appeal have been joined by multiple
defendants. For clarity and brevity, we refer in this opinion only to the
primary party raising each issue, except in those instances when other
parties have independently addressed an issue in such a manner as to
merit discrete treatment, or when otherwise necessary for purposes of this
opinion. For a complete list of which parties have joined in which appellate
claims, see Appendix A of this opinion.
11
See Travelers Casualty & Surety Co. of America v. Netherlands Ins.
Co., 312 Conn. 714, 740, 95 A.3d 1031 (2014) (‘‘If the policy is ambiguous,
extrinsic evidence may be introduced to support a particular interpretation.
. . . [I]f an ambiguity arises that cannot be resolved by examining the
parties’ intentions . . . the ambiguous language should be construed in
accordance with the reasonable expectations of the insured when he entered
into the contract.’’ [Internal quotation marks omitted.]); Israel v. State Farm
Mutual Automobile Ins. Co., supra, 259 Conn. 510–11 (applying other canons
of construction prior to construing policy in favor of drafter); Fiallo v.
Allstate Ins. Co., 138 Conn. App. 325, 340, 51 A.3d 1193 (2012) (collecting
sources); 2 S. Plitt et al., Couch on Insurance (3d Ed. Rev. 2010) § 22:16,
pp. 22-93 through 22-94 (‘‘since the rule of strict construction of an ambiguous
policy against insurer is a rule of last resort, and not to be permitted to
frustrate parties’ expressed intention if such intention could be otherwise
ascertained, where there is extrinsic evidence of parties’ intention, which
is proffered and admissible, and which resolved ambiguity, albeit in favor
of noncoverage, the rule of strict construction need not be applied’’); M.
Taylor et al., Connecticut Insurance Law (2011) § 2-5:1, p. 35 (‘‘[o]nce a
determination is made that the policy is ambiguous, then the court may
consider any relevant evidence which demonstrates the intent of the parties
at the time that they entered into the policy’’); but see Lexington Ins. Co.
v. Lexington Healthcare Group, Inc., supra, 311 Conn. 77 (Eveleigh, J.,
concurring and dissenting) (arguing that, at least in some instances, rule
should be applied in lieu of consulting extrinsic evidence of parties’ inten-
tions); 1 New Appleman on Insurance Law, Library Edition (J. Thomas &
F. Mootz III eds., 2011) § 5.02, p. 5-7 (similar).
12
See footnote 10 of this opinion.
13
See footnote 52 of this opinion.
14
Mt. McKinley does not take any position as to which trigger of coverage
theory should apply to claims alleging asbestosis and other noncancer
diseases.
15
We note that none of the parties to the present dispute expressly identi-
fied the trial court’s adoption of the continuous trigger theory as a distinct
appellate issue in their briefs. See Practice Book § 67-4. Nevertheless, we
conclude that the question of which trigger theory governs the present
appeals is properly before this court because (1) it has been briefed and
argued by the parties, and (2) its resolution is a necessary prerequisite to
our resolution of other issues that the parties have expressly raised, including
the admissibility of Dr. Kratzke’s testimony and whether the trial court
applied the correct availability rules, allocation formula, and default date
of first exposure. See Stein v. Tong, 117 Conn. App. 19, 21 n.1, 979 A.2d
494 (2009); United Technologies Corp. v. American Home Assurance Co.,
989 F. Supp. 128, 152 (D. Conn. 1997).
16
We note that scores of different insurance policies are at issue in this
case and, although the policies are generally similar in most respects material
to the present appeals, there are minor variations in the policy language
and terms. We address those variations herein only to the extent that the
parties have identified them as potentially relevant or we otherwise deem
them to be so.
17
Implicit in the latter conclusion is the fact that there may be no practical
difference between these two trigger theories with respect to the property
damage at issue in Netherlands. Unlike the situation with asbestos related
disease, where there is a lengthy premalignancy latency period and an
individual arguably can be exposed to asbestos fibers without suffering any
injury; but see part III A 3 of this opinion; the Supreme Court in Netherlands
may have been operating under the assumption that building damage begins
to occur from the moment that water ingress begins, so that exposure and
injury are contemporaneous. See GenCorp, Inc. v. AIU Ins. Co., 104 F. Supp.
2d 740, 742, 746–48 (N.D. Ohio 2000).
18
We do not foreclose the possibility that, with respect to other types of
long-tail losses, it might be both possible and practical to determine, as a
factual matter, what portion of the injury occurs during each policy period.
See Owens-Illinois, Inc. v. United Ins. Co., supra, 138 N.J. 458–59; M.
Doherty, ‘‘Allocating Progressive Injury Liability Among Successive Insur-
ance Policies,’’ 64 U. Chi. L. Rev. 257, 260 n.14 (1997).
19
During Phase II of the trial, the court denied a motion by Mt. McKinley
renewing its proffer.
20
To the extent that the trial court excluded Kraztke’s testimony solely
on the basis of the court’s belief that Security rendered any expert testimony
on the trigger issue irrelevant, we affirm the ruling of the court on the
alternative grounds presented by Vanderbilt. See Pelletier Mechanical Ser-
vices, LLC v. G & W Management, Inc., 162 Conn. App. 294, 301, 131 A.3d
1189, cert. denied, 320 Conn. 932, 134 A.3d 622 (2016).
21
We assume without deciding that Mt. McKinley is correct that it would
be improper for this court to adopt, as a legal fiction, a trigger of coverage
theory that was incompatible with current scientific knowledge regarding
the nature of the injuries at issue. We also note that Mt. McKinley’s arguments
with respect to the Kratzke testimony are limited to asbestos related cancers;
Mt. McKinley does not contend that it would be improper to apply a continu-
ous trigger theory to claims alleging asbestosis.
22
See Eagle-Picher Industries, Inc. v. Liberty Mutual Ins. Co., supra, 682
F.2d 18 (noting different perspectives of research scientists and treating
physicians); Ins. Co. of North America v. Forty-Eight Insulations, Inc.,
supra, 633 F.2d 1218 (similar); Zurich Ins. Co. v. Raymark Industries, Inc.,
145 Ill. App. 3d 175, 183, 494 N.E.2d 634 (1986) (explaining that, for cellular
pathologists, ‘‘injury’’ includes physical or chemical damage that may be
detectable only on microscopic or subclinical level, including the alteration
of cellular structure or function, and disease is simply ongoing process of
repairing or reacting to such injuries, whereas clinicians define ‘‘injury’’ in
terms of some kind of noticeable harm), aff’d, 118 Ill. 2d 23, 514 N.E.2d
150 (1987).
23
See Stonewall Ins. Co. v. Asbestos Claims Management Corp., 73 F.3d
1178, 1196 (2d Cir. 1995) (‘‘most courts that have analyzed the issue have
found the continuous injury trigger of coverage applicable to the standard
[occurrence based comprehensive general liability] policy’’ [internal quota-
tion marks omitted]), modified on denial of reh’g, 85 F.3d 49 (2d Cir. 1996);
Montrose Chemical Corp. v. Admiral Ins. Co., 10 Cal. 4th 645, 677, 913 P.2d
878, 42 Cal. Rptr. 2d 324 (1995), modified on denial of reh’g (August 31,
1995) (similar); J. Michaels et al., supra, 64 U. Kan. L. Rev. 471–72 (similar).
24
See Ins. Co. of North America v. Forty-Eight Insulations, Inc., supra,
633 F.2d 1218; Owens-Illinois, Inc. v. United Ins. Co., supra, 138 N.J. 453–54.
25
By contrast, the injury-in-fact theory championed by Mt. McKinley, under
which no coverage obligations attach until malignancy emerges, ignores the
overwhelming weight of authority acknowledging that bodily injury occurs
throughout the period that asbestos is lodged in the lung tissue. See Lloyd
E. Mitchell, Inc. v. Maryland Casualty Co., 324 Md. 44, 62, 595 A.2d 469
(1991); Owens-Illinois, Inc. v. United Ins. Co., supra, 138 N.J. 454. Other
trigger theories such as initial exposure and manifestation likewise turn a
blind eye to the realities of asbestos related disease: during all stages of
the disease process, a person’s body is progressively compromised by the
toxin to which he or she has been exposed.
26
Both of the amici—the United Policyholders and the Complex Insurance
Claims Litigation Association—have submitted briefs addressed to this issue.
Although we have considered the arguments of the amici, we do not address
them herein except to the extent that they overlap or bolster the arguments
presented by the parties. See Dow & Condon, Inc. v. Brookfield Development
Corp., 266 Conn. 572, 595, 833 A.2d 908 (2003).
27
Courts and commentators generally have recognized that comprehen-
sive general liability insurance was unavailable for companies engaged in
asbestos related businesses after 1985. Because Vanderbilt’s relevant policies
did not expire until March 3, 1986, however, the issue in the present case is
most accurately stated as whether such insurance was available to Vanderbilt
after March 3, 1986. Nevertheless, for purposes of brevity we will refer
simply to the availability of insurance during the ‘‘post-1985’’ and ‘‘pre-
1986’’ periods.
28
A claims-made policy provides coverage only for those claims made
during the policy period. By contrast, an occurrence based policy provides
coverage for any injuries that take place during the policy period, even if
the claim arising from those injuries is not made until long after the policy
period has ended. A claims-made policy thus allows an insurer both to cabin
its potential liability and to better predict its long-term exposure relative
to occurrence based policies, which afford ‘‘almost unlimited prospective
coverage’’ up to the policy limits. (Internal quotation marks omitted.) Secu-
rity Ins. Co. of Hartford v. Lumbermens Mutual Casualty Co., supra, 264
Conn. 692 n.5.
29
Compare Chemical Leaman Tank Lines, Inc. v. Aetna Casualty &
Surety Co., 177 F.3d 210, 231 (3d Cir. 1999), Stonewall Ins. Co. v. Asbestos
Claims Management Corp., supra, 73 F.3d 1204, Keene Corp. v. Ins. Co. of
North America, supra, 667 F.2d 1058 (Wald, J., concurring in part), Pneumo
Abex Corp. v. Maryland Casualty Co., Civil Action No. 82-2098 (JGP), 2001
WL 37111434, *10 (D.D.C. October 9, 2001), Hercules, Inc. v. AIU Ins. Co.,
784 A.2d 481, 493 (Del. 2001), Baltimore v. Utica Mutual Ins. Co., 145 Md.
App. 256, 313–14 n.54, 802 A.2d 1070 (2002), cert. dismissed by petitioner
before oral argument, 2003 Md. LEXIS 176 (Md. March 6, 2003) (decision
without published opinion, 374 Md. 81, 821 A.2d 369 [2003]), Wooddale
Builders, Inc. v. Maryland Casualty Co., 722 N.W.2d 283, 297 (Minn. 2006),
and Owens-Illinois, Inc. v. United Ins. Co., supra, 138 N.J. 479 (adopting
unavailability rule), with Sybron Transition Corp. v. Security Ins. of Hart-
ford, 258 F.3d 595, 600 (7th Cir. 2001), AAA Disposal Systems, Inc. v. Aetna
Casualty & Surety Co., 355 Ill. App. 3d 275, 287–88, 821 N.E.2d 1278 (2005),
leave to appeal denied, 2005 Ill. LEXIS 296 (Ill. January 26, 2005) (decision
without published opinion, 213 Ill. 2d 553, 829 N.E.2d 786 [2005]), Boston
Gas Co. v. Century Indemnity Co., 454 Mass. 337, 371, 910 N.E.2d 290
(2009), Crossmann Communities of North Carolina, Inc. v. Harleysville
Mutual Ins. Co., 395 S.C. 40, 66 and n.16, 717 S.E.2d 589 (2011), and Bradford
Oil Co. v. Stonington Ins. Co., 190 Vt. 330, 342, 54 A.3d 983 (2011) (rejecting
rule); see also Keyspan Gas East Corp. v. Munich Reinsurance America,
Inc., 143 Ohio App. Div. 3d 86, 93–95, 37 N.Y.S.3d 85 (2016) (outcome depends
on specific policy language).
30
The other cases to which Mt. McKinley directs our attention reject the
unavailability rule for substantially the same reasons as did Boston Gas and
Sybron. See footnote 29 of this opinion.
31
Throughout this part of the opinion, we refer only to those injuries
alleged to have resulted from a first exposure to Vanderbilt’s talc prior to
1986 (or, more generally, during an insured period) but to have manifested
after 1985 (or, more generally, to have spanned a period during which
insurance was unavailable). The parties agree that Vanderbilt is solely
responsible for injuries allegedly arising from an initial exposure to its talc
after 1985.
32
We reiterate that we make this assumption merely for purposes of
analysis. We take no position on the factual question of the extent to which
the risks allegedly associated with asbestos or talc were known or foresee-
able prior to the mid-1980s, when insurance coverage for those products
ceased to be generally available.
33
See, e.g., Owens-Illinois, Inc. v. United Ins. Co., supra, 138 N.J. 475–76
(prorating costs by time-on-the-risk and degree of risk assumed).
34
The other cases cited by Vanderbilt as evidence that our sister courts
have not applied an equitable exception are not instructive, as they involve
policyholders who discovered, years after comprehensive general liability
policies began incorporating a pollution exclusion; see part IV A of this
opinion; that their facilities had been inadvertently polluting the natural
environment. See, e.g., Champion Dyeing & Finishing Co. v. Centennial
Ins. Co., supra, 355 N.J. Super. 262.
35
For purposes of this discussion, we assume, solely for the sake of
argument, that Vanderbilt’s talc may have contained asbestos or had the
potential to cause asbestos related injuries. We recognize that Vanderbilt
fervently denies this, but also that juries in certain of the underlying actions
have found against Vanderbilt. Because this factual question was not before
the trial court, we must consider the proposed equitable exception in light
of both possibilities.
36
For example, the court might conclude that, for any underlying action
for which the court’s chosen method would result in a default date of first
exposure less than five years prior to March 3, 1986, Vanderbilt would bear
the burden of proving that initial exposure did in fact occur during the time
when the company was insured.
37
Vanderbilt also argues that it would be improper to apply an equitable
exception in the present case because the relevant policies did not contain
exclusions precluding coverage in the event that Vanderbilt continued to
sell its talc. This argument misses the mark. None of the elements of the
pro rata allocation approach that this court and our Supreme Court have
adopted—continuous trigger, time-on-the-risk allocation, proration to the
insured, or the unavailability rule—appear as provisions in the standard
form comprehensive general liability policies at issue in this case. Rather,
it is precisely because those policies failed to anticipate and provide an
allocation methodology for long-tail toxic tort claims potentially implicating
multiple policies that courts have been compelled to develop rules for
distributing defense and indemnity obligations. The proposed equitable
exception is no different.
38
During the Phase I trial, Vanderbilt acknowledged that it had lost the
relevant policies covering these years and, on appeal, it does not challenge
the trial court’s conclusion that it must be treated as self-insured and allo-
cated a pro rata share of defense costs for the period from January 1, 1948
through December 31, 1955.
39
Vanderbilt contends that, even if we uphold the trial court’s determina-
tion that it was liable for some defense costs after 1993, the trial court
improperly determined that its liability terminated on April 24, 2007 (the
end of the extended reporting period), rather than on April 24, 2004 (the
end of the initial policy term). Because we conclude that Vanderbilt was
not liable for any post-1985 defense costs, we need not resolve this claim.
For the same reason, we need not consider Vanderbilt’s argument that
insurance should not have been deemed available between 1993 and 2007
for purposes of the underlying actions because its ability to obtain limited
coverage during that period was predicated on its representation to its
insurers that its products did not contain asbestos.
40
Vanderbilt does contend, however, that it would be perverse to ‘‘punish’’
an insured who, through extraordinary efforts, is able to obtain limited
coverage during a time when such coverage is generally unavailable. To
construe that limited success as evidence that insurance was available to
the particular policyholder, and then allocate a pro rata share of costs to
the policyholder because it failed to obtain even more coverage, would,
Vanderbilt argues, discourage such efforts and reduce the total resources
available to respond to long-tail injuries.
41
Silicosis is ‘‘[a] form of pneumoconiosis resulting from occupational
exposure to and inhalation of silica dust over a period of years; characterized
by a slowly progressive fibrosis of the lungs, which may result in impairment
of lung function . . . .’’ Stedman’s Medical Dictionary (28th Ed. 2006) p.
1773; see also McClain v. Metabolife International, Inc., 401 F.3d 1233,
1239 (11th Cir. 2005) (discussing both ‘‘toxins like asbestos, which causes
asbestosis and mesothelioma,’’ and ‘‘silica, which causes silicosis’’). Further-
more, the insurance industry has crafted distinct exclusions for silica and
asbestos related injuries. See, e.g., Liberty Mutual Ins. Co. v. Lone Star
Industries, Inc., 290 Conn. 767, 811, 967 A.2d 1 (2009) (noting that policy
in question contained both asbestos exclusion and silicosis exclusion).
42
Bendure did not elaborate on precisely what ‘‘generally available’’ consti-
tuted, apart from confirming that, in his opinion, the issuance of even one
such policy in a given year could meet that metric.
43
The trial court found that the parties had furnished no evidence that
occurrence based coverage was available to Vanderbilt after 1986 that ‘‘it
elected not to purchase.’’ The court also found that Vanderbilt ‘‘neither
elected to decline to purchase available [occurrence based] indemnity insur-
ance, nor did it purchase an insufficient amount of (available) insurance.’’
44
The trial court found, and no party to these appeals disputes, that ‘‘[f]rom
1999–2003, [Vanderbilt] annually obtained approximately $100 million in
claims-made coverage with asbestos exclusions.’’
45
As Bendure acknowledged in his testimony, more than 2000 asbestos
related claims had been filed against Vanderbilt.
46
Because a necessary factual predicate to Mt. McKinley’s claim is lack-
ing—namely, a finding by the court that occurrence based coverage was
available to Vanderbilt during the years in question—we do not further
consider the substantive merits of Mt. McKinley’s claim regarding the con-
tours of the unavailability of insurance rule. Specifically, we express no
opinion as to Mt. McKinley’s assertion that the general rules regarding the
expansive obligations of insurers to defend actions in which any of the
allegations of the complaint potentially fall under the scope of the policy
also apply to a policyholder deemed to be self-insured for purposes of pro
rata allocation.
47
Consider, for example, a hypothetical claimant who alleges that she
developed mesothelioma in 1962 but for whom a date of first exposure
cannot be established. Assume that her claim settles for $1.5 million. Under
the methodology advocated by the secondary insurers, the court would
apply a default date of first exposure of 1948 and would allocate the indem-
nity payment over fifteen years, from 1948 through 1962. Vanderbilt would
be responsible for the 1948 through 1955 period, during which it was effec-
tively self-insured, and Continental for the 1956 through 1961 period, for
which it now has stipulated that it provided coverage, as well as for 1962.
Under that approach, only $100,000 (one-fifteenth of $1.5 million) of the
settlement would be allocated to Continental’s $300,000 1962 policy. By
contrast, under the primary insurers’ allocation agreement, all $1.5 million
would have been allocated to the 1962 policy, resulting in its exhaustion
and leaving a substantial remainder for the 1962 excess carriers.
48
After the court issued its Phase II decision, Mt. McKinley moved for
reargument, reconsideration, or clarification of that decision, seeking,
among other things, an explanation as to why the court had elected to apply
the default date of January 1, 1962, on a prospective basis. The court denied
this request.
49
Apart from Huffer’s testimony, the court also was presented with Posn-
er’s expert testimony on the issue. Posner also indicated that, in his opinion,
‘‘the allocation performed by Hartford and Continental was reasonable under
the customs and practices in the industry’’ at that time.
50
Mt. McKinley argues that the court ignored Continental’s prior acknowl-
edgments that it had issued coverage to Vanderbilt from 1956 to 1962. That
claim is untenable. The court specifically found that ‘‘at the time that the
allocation agreement was executed, the existence of those [pre-2002] policies
and any obligations thereunder was an unresolved and disputed factual
issue, which was not determined until addressed by this court’’ in the Phase
I and II decisions.
That finding is substantiated by evidence in the record before us. Peter
A. Pogue, a claims consultant who administered asbestos claims on behalf
of Continental, testified that 1962 was ‘‘the date [of] the very first policy
that [Continental] had a complete copy of’’ and reflected the ‘‘first confirmed
coverage.’’ Lawrence Farber, an assistant vice president in Hartford’s com-
plex claims group, similarly testified that Continental’s ‘‘first confirmed
coverage’’ was under the 1962 policy. On that testimony, the court found
that the 1962 policy ‘‘was the first policy that [Continental] had a complete
copy [of] to confirm and verify coverage.’’ The record contains no evidence
to the contrary.
51
Continental first suggested such an approach in a footnote to its Phase II
posttrial brief, but the trial court did not address the proposal in its decision.
52
For certain of the errors alleged in this part, we agree with the parties
as to the proper approach to calculating Vanderbilt’s share of the costs, but
it is unclear to us whether the trial court departed or intended to depart
from that approach. In light of the unique procedural posture of this case,
we think the most prudent path is simply to explain what approach the trial
court is to employ on remand and during the next phases of the trial without
first attempting to determine whether the court actually strayed from
that approach.
53
Although throughout this section we refer to the allocation block in
terms of months or years for purposes of brevity and clarity, the precise
coverage block likely will have to be calculated in terms of days because
the full allocation block—at least with respect to Vanderbilt’s occurrence
based policies—is presumed to begin on January 1, 1948, and to end on
March 3, 1986.
54
To the extent that the court intended to calculate the number of months
between January 1, 1948, and December 31, 2008, which it presumed to be
the respective dates on which Vanderbilt first and last sold talc products,
the length of the sixty-one year allocation block should have been 732
months rather than 720. Any such miscalculation is immaterial, however,
in light of our determination that the maximum allocation block does not
extend to 2008.
55
In a posttrial motion, Mt. McKinley asked the trial court also to consider
the effect on Vanderbilt’s pro rata liabilities of the court’s determination
that the umbrella policies Continental issued between 1968 and 1977 did
not cover defense costs. The court denied this request.
56
In referring to Vanderbilt’s share of the maximum allocation block, we
do not preclude the possibility that the company’s share of the total alloca-
tion might rise in the future if, for example, an additional insurer were to
become insolvent.
57
We note that Vanderbilt was able to obtain limited claims-made coverage
between 1993 and 2007 conditioned on its representation that its talc prod-
ucts did not contain asbestos. The question of whether those policies never-
theless are available to respond to the underlying actions and should,
therefore, be included in the allocation block is not presently before us.
58
Assume for example that an underlying action alleging a date of first
exposure in March, 1977, and filed in 2003, resulted in a settlement of $10.1
million, and that the policyholder purchased a $100,000 primary claims-
made policy for 2003 but that additional insurance was unavailable. Under
those circumstances, $100,000 would be allocated to 2003 (assuming the
policy limits were otherwise untapped) and $1 million would be allocated
to each of the policy years from March, 1977 through March, 1986. Although
the policyholder would not be responsible for any residual for 2003, it would
be responsible for any residual in the remaining years after all primary and
secondary policies were exhausted.
59
Our sister courts are divided as to the general question of which party
bears the burden of establishing the availability or unavailability of insurance
for purposes of pro rata allocation of long-tail costs. Compare Decker Mfg.
Corp. v. Travelers Indemnity Co., 106 F. Supp. 3d 892, 898 (W.D. Mich.
2015) (‘‘[t]he insured bears the burden of proving that insurance was not
reasonably available to it’’), with Chemical Leaman Tank Lines, Inc. v.
Aetna Casualty & Surety Co., 177 F.3d 210, 231 (3d Cir. 1999) (‘‘the insurers
should bear the burden of proving that insurance coverage was available’’).
Recognizing that the burden of proof in an insurance coverage dispute
does not always follow ordinary contract law; M. Taylor et al., Connecticut
Insurance Law (2d Ed. 2013) p. 71; and that the doctrine at issue is an
equitable one, we believe that the most reasonable approach is to require
the policyholder to prove that it was unable to obtain asbestos coverage
prior to 1986, when such insurance was generally available, but to require
the insurer to prove that insurance was available to the policyholder after
1985, when exclusion clauses were incorporated into the standard form
comprehensive general liability policy. In other words, the widely accepted
fact that occurrence based asbestos coverage was generally available
through 1985 but not thereafter creates a rebuttable presumption that the
situation was no different with respect to any individual policyholder. This
rule does not require either party to prove a negative and, in both instances,
places the burden on the party that is arguably best positioned to make the
proof. See Buell Industries, Inc. v. Greater New York Mutual Ins. Co., 259
Conn. 527, 551, 791 A.2d 489 (2002); Fiallo v. Allstate Ins. Co., 138 Conn.
App. 325, 349, 51 A.3d 1193 (2012) (Borden, J., concurring).
60
Mt. McKinley’s counterclaim states in relevant part that ‘‘[t]o the extent
that Mt. McKinley [is] held to have any coverage obligations to [Vanderbilt]
. . . with respect to any underlying claims . . . then [Mt. McKinley seeks]
a declaration that [Vanderbilt] should be allocated a pro rata share of the
defense and indemnity costs for each underlying claim at issue . . . because
[Vanderbilt] failed to obtain insurance . . . and/or knowingly continued to
mine and distribute talc . . . and/or because [Vanderbilt] has lost or is
missing its insurance policies . . . and/or because [Vanderbilt] was unin-
sured, underinsured or self-insured, has insolvent insurer policy periods
and/or periods where the insurer(s) has no defense obligation. . . . To the
extent that any of the defense or indemnity costs for any of [Vanderbilt’s]
previously resolved underlying claims at issue were allocable to [Vanderbilt]
and [Vanderbilt] failed to pay such defense or indemnity costs, then [Mt.
McKinley seeks] a declaration that those amounts are reallocated to [Vander-
bilt], requiring [Vanderbilt] to reimburse the insurer(s) that previously paid
such costs . . . .’’
61
Continental also submits, in a footnote to its principal appellate brief
that is devoid of any analysis or citation to legal authority, that, despite the
court’s intent to apply its findings prospectively, Continental ‘‘still has a
claim for reimbursement’’ because it ‘‘has been paying more than its allocable
share of Vanderbilt’s defense and indemnity within the 1962–1986 allocation
block . . . .’’ We decline to consider that bald assertion. See Knapp v.
Knapp, 270 Conn. 815, 823 n.8, 856 A.2d 358 (2004) (‘‘We consistently have
held that [a]nalysis, rather than mere abstract assertion, is required in order
to avoid abandoning an issue by failure to brief the issue properly. . . .
[A]ssignments of error which are merely mentioned but not briefed beyond
a statement of the claim will be deemed abandoned and will not be reviewed
by this court. . . . Where the parties cite no law and provide no analysis
of their claims, we do not review such claims.’’ [Internal quotation marks
omitted.]).
62
In its counterclaim, Continental claimed that ‘‘Vanderbilt is . . . liable
to contribute to and/or indemnify and reimburse Continental for the dispro-
portionate share of liability Continental has paid on Vanderbilt’s behalf.’’
American International similarly sought in its counterclaim reimbursement
‘‘for the full amount of the per occurrence deductible which [it] has paid
on Vanderbilt’s behalf.’’
63
As the trial court found in part III C 2 of its Phase II decision, ‘‘[t]o
effectuate a reallocation to include, for example, the period 1956–1962 would
require the court and the parties to engage in mathematical calculations
that not only would be extremely arduous, time-consuming and to some
degree subjective, they would also be of marginal utility and ultimately
undermine the prior significant efforts of the parties to compromise their
differences over the allocation of the payments between themselves and
which were made for the benefit of their insured. Beyond the issue of such
recalculations, to reopen the limits of the allocation agreement would work
contrary to this state’s public policy in favor of the settlement of civil liti-
gation.’’
Finding that the allocation agreement between Continental and Hartford
‘‘was reasonable at the time it was entered into . . . and was taken in good
faith,’’ the court concluded that it ‘‘will not force those parties to reallocate’’
the millions of dollars that those primary insurers already had paid to resolve
thousands of underlying actions over the course of several decades. We have
affirmed the propriety of that determination in part III C 1 of this opinion.
64
For this reason, we are not persuaded by Vanderbilt’s reliance on an
isolated remark of the court regarding the challenging nature of allocating
past defense and indemnity payments. As support for its interpretation of
the court’s prospectivity ruling, Vanderbilt points to the court’s observation,
in the exhaustion section of its Phase II decision, that requiring ‘‘courts and
litigants to go back and recalculate precisely what amounts were paid on
which claims, during which periods of time, whether allocation to that time
frame was appropriate, and whether the payments were made reasonably
and in good faith [would be] an undertaking [that] would lie between arduous
and Sisyphean.’’ That commentary, however, was made not with respect to
the general retroactive application of allocation rules but, rather, in the
specific context of the court’s determination that the primary insurance
policies issued by Continental and Hartford had been exhausted and, in
particular, that the 2002 allocation agreement was enforceable.
65
Vanderbilt argues that ‘‘reimbursement of past defense and indemnity
costs by Vanderbilt, when Vanderbilt did not control the decision-making,
would be entirely unjustified.’’ Vanderbilt has provided neither legal author-
ity nor analysis to substantiate that bald assertion. ‘‘We repeatedly have
stated that [w]e are not required to review issues that have been improperly
presented to this court through an inadequate brief. . . . Analysis, rather
than mere abstract assertion, is required in order to avoid abandoning an
issue by failure to brief the issue properly.’’ (Internal quotation marks omit-
ted.) Taylor v. Mucci, 288 Conn. 379, 383 n.4, 952 A.2d 776 (2008); see also
Northeast Ct. Economic Alliance, Inc. v. ATC Partnership, 272 Conn. 14,
51 n.23, 861 A.2d 473 (2004) (‘‘[i]nasmuch as the plaintiffs’ briefing of the
. . . issue constitutes an abstract assertion completely devoid of citation
to legal authority or the appropriate standard of review, we exercise our
discretion to decline to review this claim as inadequately briefed’’); Russell
v. Russell, 91 Conn. App. 619, 635, 882 A.2d 98 (parties must analyze relation-
ship between facts of case and applicable law), cert. denied, 276 Conn. 924,
925, 888 A.2d 92 (2005). We therefore do not further consider Vanderbilt’s
claim in this regard.
66
Philburn testified that Mt. McKinley so advised Vanderbilt through the
issuance of ‘‘reservation of rights letters.’’ At trial, multiple such letters
were introduced into evidence. Philburn confirmed that the issuance of
reservation of rights letters was standard practice in responding to claims
tendered to Mt. McKinley by Vanderbilt.
67
It cannot be forgotten that these are interlocutory appeals, in which
the trier of fact has not yet made any determinations regarding the applicabil-
ity or reach of Mt. McKinley’s reservation of rights. In both its counterclaim
and a cross claim, Mt. McKinley sought ‘‘a proper allocation of the loss or
damages among [Vanderbilt], any insured, [Mt. McKinley] and all other
insurers,’’ and asserted ‘‘a claim for contribution, reimbursement, indemnifi-
cation, set off, subrogation, equitable relief and/or any other appropriate
relief . . . to the fullest extent permitted by law.’’ Mt. McKinley’s reservation
of rights bears directly on its claims for reimbursement. The court’s dedica-
tion of the Phase III proceeding to that issue suggests that Mt. McKinley’s
reservation of rights properly will be a subject thereof.
68
See footnote 10 of this opinion.
69
See footnote 16 of this opinion.
70
Although the insurance policies in Heyman contained nonstandard pol-
lution exclusion clauses, the present defendants contend that the Supreme
Court’s analysis in that case applies to and governs all of the pollution
exclusion clauses at issue in this case.
71
Buell Industries, Inc. v. Greater New York Mutual Ins. Co., supra,
259 Conn. 530–32 and nn.1–2, and Schilberg Integrated Metals Corp. v.
Continental Casualty Co., supra, 263 Conn. 247–48, 248 n.1, may be distin-
guished on similar grounds. In Buell Industries, Inc., in which a pollution
exclusion was held to bar coverage, an environmental hazardous waste
audit revealed that waste oil and degreasing chemicals had leaked from a
company’s wastewater lagoon into neighboring groundwater. In Schilberg,
the Pennsylvania Department of Environmental Resources (now Department
of Environmental Protection) brought an administrative action when soil
and groundwater contamination were discovered near an unauthorized haz-
ardous waste disposal facility. Both cases, like Heyman, represent para-
digmatic examples of environmental pollution.
72
See American States Ins. Co. v. Koloms, 177 Ill. 2d 473, 490–91, 687
N.E.2d 72 (1997).
73
In each instance, emphasis is as in the original and information regarding
pronunciations, word origins, and parts of speech has been omitted.
74
See, e.g., Maryland Casualty Co. v. W.R. Grace & Co., 794 F. Supp.
1206, 1229 (S.D.N.Y. 1991), rev’d in part on other grounds, 23 F.3d 617 (2d
Cir. 1993), cert. denied, 513 U.S. 1052, 115 S. Ct. 655, 130 L. Ed. 2d 559
(1994); West American Ins. Co. v. Tufco Flooring East, Inc., 104 N.C. App.
312, 322, 409 S.E.2d 692 (1991), overruled in part on other grounds by Gaston
County Dyeing Machine Co. v. Northfield Ins. Co., 351 N.C. 293, 303, 524
S.E.2d 558 (2000).
75
Even if we were to conclude that asbestos is an irritant within the scope
of the policy exclusion, we still hold that the pollution exclusion does not
bar coverage pursuant to the dispersal clause. See part IV A 1 b iii of
this opinion.
76
Also, we observe that later iterations of the pollution exclusion, like the
one at issue in Heyman, make explicit the fact that the various enumerated
irritants and contaminants listed in the clause are all merely intended to be
examples or categories of pollutants. National Casualty’s 1985 policy, for
example, provides in relevant part: ‘‘[This policy shall not apply] . . . to
‘bodily injury’ or ‘property damage’ arising out of the actual, alleged or
threatened discharge, dispersal, release or escape of pollutants . . . . Pol-
lutants means any solid, liquid, gaseous or thermal irritant or contaminant,
including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste
material.’’
Although the terms of one defendant’s 1985 policy certainly cannot dictate
the meaning of policies issued a decade earlier by different defendants, this
revision to or clarification of the standard form policy language certainly is
consistent with the conclusion that, from the outset, the pollution exclusion
clause was addressed principally to pollution.
77
We recognize that, in Drown, a majority of our Supreme Court cautioned
that ‘‘[t]he title of an insurance policy cannot . . . be used to create ambigu-
ity within the plain and unambiguous terms of the contract.’’ Connecticut
Ins. Guaranty Assn. v. Drown, supra, 314 Conn. 191 n.14. In the present
case, however, in which we already have determined that at least one key
policy term is ambiguous as applied, the title of the pollution exclusion is
merely one of many factors we consider in assessing the scope and extent
of that ambiguity.
78
We note that not all of the underlying complaints expressly allege aerial
dispersal or inhalation of asbestos. Because we answer this question in
the negative, we need not determine whether the pollution exclusion even
potentially applies to claims alleging that asbestos dust was ingested or
absorbed through means other than inhalation. See Continental Casualty
Co. v. Rapid-American Corp., supra, 80 N.Y.2d 654 (noting that asbestos
fibers can be transmitted by direct contact with clothing or skin, rather
than through inhalation).
79
In Yale University v. Cigna Ins. Co., supra, 224 F. Supp. 2d 402, on
which the defendants rely, the District Court failed to consider whether the
third element of the exclusion was satisfied, focusing solely on the question
of whether asbestos dust constitutes a pollutant, irritant, or contaminant.
It is not even clear whether the policy at issue in that case included the
‘‘atmosphere’’ language. See id., 421.
80
See, e.g., Lumbermens Mutual Casualty Co. v. S–W Industries, Inc.,
39 F.3d 1324, 1336 (6th Cir. 1994); MacKinnon v. Truck Ins. Exchange,
supra, 31 Cal. 4th 650–51; Belt Painting Corp. v. TIG Ins. Co., supra, 100
N.Y.2d 387–88; see also In re Asbestos Products Liability Litigation (VI),
Docket No. Civ. A. 96-968, 1997 WL 539916, *7 (E.D. La. September 2, 1997)
(‘‘release’’ and ‘‘disperse’’ may not apply to predictable exposure, such as
inhalation during asbestos remediation).
81
We recognize that asbestos has been identified as an environmental
pollutant. See Selm v. American States Ins. Co., Docket No. C-010057, 2001
WL 1103509, *3 (Ohio App. September 21, 2001); see also Regs., Conn. State
Agencies §§ 22a-209-1, 22a-209-8 (i), 22a-430-4, App. D. The question that
we address here, however, is whether, consistent with the governing regula-
tions, the pollution exclusion is intended to deny coverage only for environ-
mental contamination resulting from its release. It is noteworthy in this
regard that a number of the environmental regulations governing asbestos
use expressly bar the ‘‘discharge’’ of asbestos only ‘‘to the outside air’’ and,
therefore, presumably would not apply to the indoor exposure scenarios
alleged in many of the underlying complaints. See, e.g., 40 C.F.R. § 61.142
(a); 40 C.F.R. § 61.149 (b) and (c).
82
In light of the large number of relevant sister state cases and the fact-
specific nature of those cases, we do not distinguish in this part of the
opinion between cases construing standard versus nonstandard pollution
exclusion clauses.
83
Some courts have reasoned that this diversity of judicial opinion itself
is evidence that the policy language is ambiguous. E.g., Motorists Mutual
Ins. Co. v. RSJ, Inc., supra, 926 S.W.2d 681; see also C & H Electric, Inc.
v. Bethel, 312 Conn. 843, 855, 96 A.3d 477 (2014) (appearing to accept
similar argument).
84
See, e.g., Nationwide Mutual Ins. Co. v. Richardson, supra, 270 F.3d
952; MacKinnon v. Truck Ins. Exchange, supra, 31 Cal. 4th 643–45; American
States Ins. Co. v. Koloms, 177 Ill. 2d 473, 489–93, 687 N.E.2d 72 (1997);
Doerr v. Mobil Oil Corp., 774 So. 2d 119, 126–28 (La. 2000); Morton Interna-
tional, Inc. v. General Accident Ins. Co. of America, 134 N.J. 1, 31–42, 629
A.2d 831 (1993), cert. denied sub nom. Ins. Co. of North America v. Morton
International, Inc., 512 U.S. 1245, 114 S. Ct. 2764, 129 L. Ed. 2d 878 (1994);
Belt Painting Corp. v. TIG Ins. Co., supra, 100 N.Y.2d 384–86; R. Burke,
‘‘Pollution Exclusion Clauses: The Agony, the Ecstasy, and the Irony for
Insurance Companies,’’ 17 N. Ky. L. Rev. 443, 446–51 (1990); 3 R. Long, The
Law of Liability Insurance (1976) App. 30, App. 58, App. 68C; C. Salisbury,
‘‘Pollution Liability Insurance Coverage, the Standard-Form Pollution Exclu-
sion, and the Insurance Industry: A Case Study in Collective Amnesia,’’ 21
Envtl. L. 357, 381–86 (1991).
85
See Maska U.S.A., Inc. v. Kansa General Ins. Co., 198 F.3d 74, 80 (2d
Cir. 1999); Buell Industries, Inc. v. Greater New York Mutual Ins. Co.,
supra, 259 Conn. 539; S. Hurwitz & D. Kohane, ‘‘The Love Canal—Insurance
Coverage for Environmental Accidents,’’ 50 Ins. Couns. J. 378 (1983).
86
The question of whether the sudden and accidental exception applies
to the underlying claims is not at issue in the present appeals.
87
The National Casualty exclusion provides: ‘‘[It is agreed that the insur-
ance does not apply]:
‘‘1. To ‘bodily injury’ or ‘property damage’ arising out of the actual, alleged
or threatened discharge, dispersal, release or escape of pollutants:
‘‘a. at or from premises you own, rent or occupy;
‘‘b. at or from any site or location used by or for you or others for the
handling, storage, disposal, processing or treatment of waste material.
‘‘c. which are at any time transported, handled, stored, treated, disposed
of, or processed as waste by or for you or any person or organization for
whom you may be legally responsible; or
‘‘d. at or from any site or location on which you or any contractors or
subcontractors working directly or indirectly on your behalf are per-
forming operations:
‘‘(i) to test for, monitor, clean up, [remove, contain, treat, detoxify] or
neutralize the pollutants, or
‘‘(ii) if the pollutants are brought on or to the site or location by or for you.
‘‘2. [To] any loss, cost or expense arising out of any governmental direction
or request that you test for, monitor, clean up, remove, contain, treat, detox-
ify or neutralize pollutants.
‘‘Pollutants means any solid, liquid, gaseous or thermal irritant or contami-
nant, including, smoke, vapor, soot, fumes, acids, alkalis, chemicals and
waste material. Waste material includes materials which are intended to be
or have been recycled, reconditioned or reclaimed.
‘‘Provided however, that this exclusion does not apply to bodily injury,
or property damage which is within the products hazard as defined in this
policy nor to such discharge, dispersal, release or escape directly caused
by fire, explosion, vandalism and malicious mischief, lightning, windstorm
or upset or collision of a motor vehicle.’’
88
The Lloyd’s exclusion provides: ‘‘This Insurance does not cover any
liability for:
‘‘(1) Personal Injury or Bodily Injury or loss of, damage to or loss of use
of property directly or indirectly caused by seepage, pollution or contami-
nation.
‘‘(2) The cost of removing, nullifying or cleaning-up seeping, polluting or
contaminating substances.
‘‘(3) Fines, penalties, punitive or exemplary damages.’’
89
For this reason, Vanderbilt’s argument that the defendants are unable
to cite to any cases in support of their position is unavailing. Vanderbilt is
in the same boat.
90
The trial court found that the minor variations in policy language
between the two versions are not relevant to the question of whether the
occupational disease exclusions apply to nonemployees of the policyholder.
On appeal, the parties do not challenge this finding or argue that the two
provisions are materially different.
91
‘‘The phrase ‘follow form’ refers to the practice, common in excess
policies, of having the second-layer coverage follow substantively the pri-
mary layer provided by the main insurer . . . .’’ (Citation omitted.) Insi-
tuform Technologies, Inc. v. American Home Assurance Co., 566 F.3d 274,
278 (1st Cir. 2009); see also SFA Group, LLC v. Certain Underwriters at
Lloyd’s, London, Docket No. CV 16-04202-GHK (JC), 2016 WL 5842180, *4
(C.D. Cal. September 29, 2016) (following form ‘‘means that the excess
policies are subject to the same terms, exclusions, conditions and definitions
as the primary policy’’ [emphasis omitted; internal quotation marks omit-
ted]), appeal docketed, No. 16-56467 (9th Cir. October 6, 2016).
92
For this reason, we reject Vanderbilt’s argument that the defendants’
interpretation of the occupational disease exclusions would render much
of the coverage afforded by the policies ‘‘illusory.’’ At the very least, the
exclusions would not bar coverage for claims brought by complainants in
category 3.
We note in this respect that the parties have neither briefed nor asked
us to resolve the question of whether, if the occupational disease exclusions
do apply to nonemployees, they bar coverage for underlying actions in
category 2, which allege both workplace and nonworkplace exposure. That
question will fall to the trial court on remand to address in the first instance.
93
See N.Y. Ins. Law § 6301 (McKinney 2016); N.Y. Comp. Codes R. & Regs.
tit. 11, § 16.0.
94
We note that, for purposes of the present appeals, none of the parties
has argued that any of the contracts at issue should be construed under
the law of any state other than Connecticut.
95
See, e.g., W. Viscusi, ‘‘Structuring an Effective Occupational Disease
Policy: Victim Compensation and Risk Regulation,’’ 2 Yale J. on Reg. 53, 65
(1984) (noting that, ‘‘[o]ver the past decade, [occupational] disease victims
have attempted to circumvent the restrictions of workers’ compensation
programs by bringing products liability claims against the manufacturers of
hazardous materials used in the workplace’’); American Bar Association,
ABA Blueprint for Improving the Civil Justice System: Report of the ABA
Working Group on Civil Justice System Proposals (1992) p. 53 (recounting
recommendations of 1983 committee ‘‘with respect to claims arising out of
occupational diseases . . . such as asbestosis’’).
96
The Lloyd’s policy does not use the term ‘‘personal injury’’ in its employee
liability exclusion clause. It does, however, contain a definition of ‘‘personal
injuries’’ that also includes sickness and disease.
97
We are not persuaded by Vanderbilt’s argument that a Maryland case,
Commercial Union Ins. Co. v. Porter Hayden Co., supra, 116 Md. App. 605,
stands for the proposition that any use of the term ‘‘occupational disease’’
outside of the workers’ compensation context is inherently ambiguous.
Rather, we read Porter Hayden Co. as cautioning against the very misstep
that the trial court committed here, namely, assuming that any special role
that the term ‘‘occupational disease’’ plays in the context of workers’ com-
pensation law necessarily applies in the distinct context of tort law and
insurance litigation. See id., 699–701.
98
This last policy was superseded by policy RDX 3652404, which was
effective from May 17, 1977 to March 25, 1978.
99
The text of the Coverage A and Coverage B provisions contained in
several of the policies at issue was amended by a New York State endorse-
ment clause in ways not material to the current dispute.
100
Curiously, none of the parties refers us to Continental Marble & Granite
Co. v. Canal Ins. Co., 785 F.2d 1258, 1259 (5th Cir. 1986), or to Caldwell
Freight Lines, Inc. v. Lumbermens Mutual Casualty Co., 947 So. 2d 948,
957 (Miss. 2007), both of which reach the opposite conclusion with respect
to materially similar provisions.
101
It should be noted that the term ‘‘umbrella coverage’’ is often used not
only with reference to policies that offer both excess coverage and primary
drop-down insurance, but also specifically to the drop-down portion of
such policies.
102
For example, § 5, entitled ‘‘Policy Period,’’ provides: ‘‘Coverage A—
This coverage applies to injury or destruction which occurs during this
policy period in the places stated in the immediate underlying policy . . . .
‘‘Coverage B—This coverage applies to personal injury, property damage
or advertising injury taking place during this policy period.’’ (Emphasis
added.)
103
To the extent that Vanderbilt argues that facts such as the size of the
policy premiums support its position that it reasonably expected Continental
to provide defense coverage under Coverage B, the trial court made no
findings that would bear out those arguments.
104
We note in this respect that, if the parties had intended that the policy
would provide defense coverage when the underlying primary insurance is
exhausted, they easily could have said so expressly. See, e.g., Cambridge
Mutual Fire Ins. Co. v. Ketchum, Docket No. 3:11-cv-00743 (VLB), 2012 WL
3544885, *1 (D. Conn. August 16, 2012) (umbrella policy expressly provided
that insurer would provide coverage if occurrence was ‘‘either: 1. not covered
by any primary insurance . . . or any other insurance which applies; or 2.
[c]overed by a primary policy . . . which . . . has been exhausted’’ [inter-
nal quotation marks omitted]). It is true that, under either party’s interpreta-
tion, the policy language is inartful and could have been more carefully
drafted. We are hard-pressed to understand, however, why the parties would
have used the language they did to express the meaning that Vanderbilt
ascribes to it.
105
At oral argument before this court, Continental explained by way of
example that an insured might purchase a primary policy containing a
pollution exclusion and then purchase a separate pollution policy or obtain
pollution coverage under a separate subcontractor policy. In that instance,
Coverage B would not respond to a pollution claim because, although the
underlying insurance does not provide defense coverage, there is other
applicable insurance. Continental maintains that the Applicable Clause in
its policies was drafted with that sort of scenario in mind.
106
In his testimony, Posner opined that the manner in which Continental
and Hartford allocated their indemnity payments was reasonable.
107
The charts contain information subject to a confidentiality agreement
between the parties. We therefore describe those materials and their con-
tents in general fashion.
108
Earlier in his testimony, Posner was asked about his process in per-
forming an allocation. Posner explained that ‘‘the first thing . . . is, you
need to gather . . . the underlying data, which is the amounts that have
been paid on the cases that you’re allocating. You need to obtain the exposure
dates. A lot of the times, these dates are obtained through counsel, even if
you have a client that has literally hundreds of thousands of asbestos claims.
A process is set up sometimes where the information will come into a
central place, will be put into a computer database, and ultimately you’ll
be left with a database of information that will give you the claimant’s name,
information from which to determine what the exposure dates are and the
amounts that need to be allocated. . . . [The information would be entered]
into a database, and ultimately . . . we would use that information to per-
form the allocation.’’
109
Whereas the allocations in plaintiff’s exhibit V-781-282 utilized a default
date of first exposure of January 1, 1948, the allocations in plaintiff’s exhibit
V-781-283 utilized a default date of first exposure of January 1, 1956.
110
Mt. McKinley also argues that the 2002 settlement agreement improperly
failed to allocate any payments to Continental’s 1956–1961 policies and that
the primary insurers’ continued use of the allocation methodology adopted
pursuant to that agreement after 2002 was unfair to the secondary insurers.
We have addressed these claims in part III C of this opinion.
111
Although the parties did not further detail the nature of such ‘‘ ‘nonprod-
ucts’ ’’ claims at trial, the policies themselves contain numerous exclusions.
For example, Continental policy numbers CCP9024038R, in effect from Janu-
ary 1, 1974 through January 1, 1977, and CCP3000112, in effect from January
1, 1977 through March 1, 1977, exclude from coverage property damage to
‘‘property owned or occupied by or rented to the insured . . . .’’ Hartford
policy number 10JPRB46801E, in effect from March 3, 1977 through March
3, 1978, excludes from coverage bodily injury or property damage due to
‘‘any act of the [insured’s] Vendor which changes the condition of the prod-
ucts’’ and ‘‘any failure [on the part of the insured’s vendor] to maintain the
product in merchantable condition . . . .’’
112
A loss run is a report provided by an insurance company that documents
claim activity on an insured’s policy. See, e.g., North American Capacity
Ins. Co. v. Brister’s Thunder Karts, Inc., Docket. No. CIV. A. 97-0330, 1998
WL 259966, *1 n.3 (E.D. La. May 20, 1998) (loss runs ‘‘are generated by an
insurer relative to a particular customer and summarize the loss/claim data
for the period or periods of coverage’’); Viking Pump, Inc. v. Century
Indemnity Co., Docket No. 10C-06-141 FSS CCLD, 2012 WL 5383100, *1
(Del. Super. September 18, 2012) (describing loss run as ‘‘a payment report’’
of processed claims).
113
Although Mt. McKinley, in its April 16, 2014 motion to ‘‘reargue, recon-
sider and/or clarify,’’ raised multiple issues regarding the court’s Phase II
decision, that motion is silent as to the present issue.
114
Because the payment in question was made pursuant to a ‘‘confidential
settlement’’ that resolved the contribution action between Continental and
Hartford, the court sealed certain specifics thereof in the proceeding at
trial. Consistent with that order, we describe the details of that payment in
general terms.
115
In Cohn, the Supreme Court explained: ‘‘Where the terms of a policy
are clear and unambiguous, they will be given their plain and ordinary
meaning. . . . Whether an insurance contract is a liability policy or an
indemnity policy depends upon the intention of the parties, as evidenced
by the phraseology of their agreement . . . . The chief difference between
a liability policy and an indemnity policy is that under the former a cause
of action accrues when the liability attaches, while under the latter there
is no cause of action until the liability has been discharged, as by payment
of the judgment by the insured.’’ (Citations omitted; internal quotation marks
omitted.) Cohn v. Pacific Employers Ins. Co., supra, 213 Conn. 546–47.
116
General Statutes § 52-205 provides: ‘‘In all cases, whether entered upon
the docket as jury cases or court cases, the court may order that one or
more of the issues joined be tried before the others.’’
117
Practice Book § 15-1 provides: ‘‘In all cases, whether entered upon the
docket as jury cases or court cases, the judicial authority may order that
one or more of the issues joined be tried before the others. Where the
pleadings in an action present issues both of law and of fact, the issues of
law must be tried first, unless the judicial authority otherwise directs. If
some, but not all, of the issues in a cause are put to the jury, the remaining
issue or issues shall be tried first, unless the judicial authority otherwise
directs.’’
118
Indeed, at least one of the bifurcation orders was entered at the behest
of Continental, which filed a motion requesting such action pursuant to
§ 52-205 and Practice Book § 15-1.
119
Continental also suggests that, absent a determination by this court as
to its duty to defend under the excess policy known as RDU 9433526, an
orphan share will be created for the January 1, 1965 through January 1,
1968 time period. That contention is fraught with assumption, as the trial
court has not yet decided whether the primary insurance policy in place
for that time period has been exhausted, nor has it determined whether
Vanderbilt failed to procure available excess insurance for defense costs
during that period. Without those determinations, the existence of an orphan
share is little more than sheer speculation, which has no place in appellate
review. See New Hartford v. Connecticut Resources Recovery Authority,
291 Conn. 502, 510, 970 A.2d 578 (2009).
On a more basic level, Continental’s concern that resolution of its duty
to defend issue by this court is necessary to properly allocate defense
costs is unfounded. Our decision today articulates the appropriate allocation
methodology to be employed by the trial court on remand. See part III
of this opinion. On remand, the trial court is tasked with applying that
methodology to the issues before it, including the issue of Vanderbilt’s
insurance coverage from 1965 through 1968. At that time, Continental
remains free to pursue its claims regarding any defense obligations under
the RDU 9433526 and RDX 3652404 excess policies.
120
The requirement that the issue must have been resolved by the trial
court comports with a fundamental tenet of appellate review in this state.
Our appellate courts generally ‘‘will not address issues not decided by the
trial court.’’ Willow Springs Condominium Assn., Inc. v. Seventh BRT
Development Corp., 245 Conn. 1, 52, 717 A.2d 77 (1998); see also Crest
Pontiac Cadillac, Inc. v. Hadley, 239 Conn. 437, 444 n.10, 685 A.2d 670
(1996) (claims ‘‘neither addressed nor decided’’ by trial court are not properly
before appellate tribunal); Atwood v. Jarrett, 81 Conn. 532, 533, 71 A. 569
(1909) (‘‘[t]he record nowhere . . . discloses that the claim embodied in
the remaining assignment of error was . . . passed upon by the court below
[and] therefore [it is] not properly before us for consideration’’); McGuire
v. McGuire, 102 Conn. App. 79, 87, 924 A.2d 886 (2007) (‘‘[w]e have repeatedly
held that this court will not consider claimed errors on the part of the trial
court unless it appears on the record that the question . . . was ruled
upon and decided by the court adversely to the appellant’s claim’’ [internal
quotation marks omitted]).
121
As with Old Republic’s claim regarding its defense obligations, there
is nothing that precludes the trial court on remand from considering Conti-
nental’s claim regarding its duty to defend under the RDU 9433526 and RDX
3652404 excess policies prior to the formal commencement of the Phase
III trial.