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More Than $750 Million For Armstrong's Asbestos Claims
On August 21, 1996, the California Supreme Court denied the insurer petitions for review in Armstrong World Industries, Inc. v. Aetna Casualty & Surety Co. This decision brought to an end a lawsuit in which our client prevailed at the trial level and on appeal on virtually every significant issue with respect to coverage for asbestos-related bodily injury and property damage claims.
The Armstrong case, which was filed in California state court, was consolidated with several other asbestos coverage suits. Our lawyers, led by Robert N. Sayler and William P. Skinner, served as lead policyholder counsel in the consolidated litigation proceeding. After the case was assigned to Judge Ira Brown, it moved forward on an accelerated schedule with extensive fact and expert discovery.
Because no courtroom in California was big enough to accommodate all the parties at trial, a former school auditorium was converted into a courtroom. At the trial, which was one of the largest ever conducted in the United States, our client prevailed on every significant issue with respect to coverage for asbestos-related bodily injury and property damage claims.
In 1993, the Court of Appeal issued a decision affirming the trial court in all material respects. Armstrong World Industries v. Aetna Casualty & Surety Co., 35 Cal. App. 4th 192 (1993). The insurers then filed petitions for review in the California Supreme Court. The Supreme Court granted the petitions but ordered that no additional briefs be filed pending its decision in the Montrose case. After the Supreme Court issued its Montrose decision, it remanded the Armstrong case to the Court of Appeal for reconsideration.
In early 1996, the Court of Appeal issued its decision on remand which again affirmed the decision of the trial court in all material respects. Armstrong World Industries v. Aetna Casualty & Surety Co., 45 Cal. App. 4th 1 (1996). The California Supreme Court denied the insurer petitions for review of that decision and brought the Armstrong case to an end. Armstrong World Industries v. Aetna Casualty & Surety Co., No. S023768 (Cal. Aug. 21, 1996).
In 1996, we also initiated an alternative dispute proceeding under the Wellington Agreement against several of Armstrong's insurers seeking to recover additional insurance coverage for asbestos-related bodily injury claims that are not within the products hazards or completed operations hazards, as those terms are defined in Armstrong's policies (such claims are commonly referred to as "non-products" claims). Armstrong has publicly disclosed that favorable decisions were issued during the trial phase of that ADR in 1999 and 2002. In accordance with the ADR rules of the Wellington Agreement, one of the insurers filed an appeal to an appellate tribunal that consisted of three arbitrators. In 2003, the appellate arbitrators ruled in favor of the insurer on the basis of the statute of limitations. Armstrong subsequently filed a motion to vacate the ruling of the appellate arbitrators in federal district court in Pennsylvania. That motion is still pending. As a result of the confirmation of Armstrong’s plan of reorganization, Armstrong’s rights to insurance coverage for asbestos-related bodily injury claims have been transferred to a Trust established for the benefit of claimants.
During the course of our representation, Armstrong recovered more than $750 million in coverage for asbestos-related liabilities.
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