Metropolitan Life v. Aetna Casualty
Prof. Bill Long 3/16/06
A Brief Factual Description
I found the following summary of background facts for this case in a helpful 2003 law review article. Let's start here and then try to understand the holding of the case. John F. O'Connor, "Insurance Settlements and the Rights of Excess Insurers," 62 MdLRev 30, 67-68 (2003).
"Similarly, in Metropolitan Life Insurance Co. v. Aetna Casualty & Surety Co., the policyholder (Met Life) had faced, and likely would continue to face, hundreds of thousands of asbestos lawsuits alleging that Met Life for many years had concealed the hazards of asbestos from the general public. By 1999, the policyholder had faced about 200,000 claims, with half of them settled at a nuisance value of about $2500 per claim, for total payments of about $250 million. From 1976 to 1986, Met Life had primary and lower-level excess insurance from Travelers with annual per occurrence limits of $25 million. In 1993, after litigating with Travelers over coverage for asbestos claims, Met Life settled with Travelers in return for a lump sum payment of $300 million, at which point Met Life sought coverage from its excess insurers.
The trial court granted summary judgment to all of the nonsettled excess insurers, reasoning that the asbestos claims against Met Life arose out of a sufficiently large number of occurrences that Met Life would never exhaust the actual policy obligations of the settled Travelers policies. On appeal, the Connecticut Supreme Court agreed. First, the court adopted the rule that Met Life could not obtain coverage from its excess insurers in a particular year until its liabilities exceeded the actual policy obligations of the underlying, but released, Travelers policies.
Having adopted this principle, the court affirmed the trial court's grant of summary judgment in favor of the nonsettled excess insurers. Accordingly, the court held that the number of occurrences involved in the claims against Met Life ensured that no single occurrence would exceed the $25 million per occurrence limits of the settled Travelers policies. Thus, the Metropolitan Life court expressly followed the widely-accepted rule that a policyholder is liable for any gap caused by its below-limits settlement with an underlying insurer, and that such obligations could not be foisted upon the nonsettled excess insurers.
Comment and Questions
One of the hottest issues in asbestos litigation is also one that has cropped up in tobacco litigation--to what extent the manufacturers and others involved in research and development regarding the harmful product knew of the damage that it could cause to humans and failed to warn the public about it. The question implicates an issue in the history of American culture that shouldn't be overlooked--the extent to which there was complicity in keeping valuable information from the American public--information which would have saved people's lives. Why is it that we in the past (and do we still tolerate it in the present??) had a tendency to allow others to conceal knowledge of harmful things? Why isn't there a duty to disclose when something that might be an unnecessary danger to people is known? Perhaps it is our emphasis on the "bottom line." That is, if all the asbestos manufacturers and others who knew of its danger "came clean" with that knowledge 50 or so years ago, it might have had a dramatic effect on the building trades and on thousands and thousands of jobs in America. Perhaps we didn't have a tradition of dissent in America up until about 40 years ago--and perhaps that tradition still isn't too strong--a tradition that would require the human costs of doing business as the primary cost to be assessed before a business could function.
In any case, the asbestos saga continues, and it should be a lesson to those of us who are looking for cultural or national symbols to understand ourselves. Dr. Barry Castelman has written the definitive (almost 900 pages; costing $150+) history of the scientific and legal issues surrounding the asbestos litigation, and though his book probably doesn't make good Spring Break reading, it ought to be examined by any who really want to understand not only law in American culture but how American values and history has shaped the way we look at law.
Various Internet sites give helpful information about Metropolitan Life's knowledge of asbestos dangers as far back as the 1930s. Just do a search on "Metropolitan Life" and "Aetna Casualty" and "asbestos litigation" and you will be kept busy for quite some time with what you find.
Copyright © 2004-2007 William R. Long