CHAPTER 9 TRIGGER OF COVERAGE

• Jurisdiction: United States

A. Policy Format and Structure

The term "trigger" refers to the event, accident, occurrence, or claim that causes the policy to provide defense and indemnity for the insured. The question of the trigger of coverage has been the subject of extensive litigation. Depending on fact situations, some courts have applied different triggers to the same policy wording.

The Commercial General Liability (CGL) policy may be written line by line (monoline) or as part of a commercial package program. The substantive coverage provisions are identical in both the old and new forms of CGL. The only difference between them is the "trigger."

Triggers that have been adopted by various courts include:

• the manifestation trigger:

o coverage applies when an injury first manifests, or is capable of being observed;

• the actual injury trigger:

o coverage applies when the injury actually happens to the claimant;

• the first injury trigger:

o in multiple injury cases, like asbestosis where the claimant ingests the damage causing fibers over a period of years, the first ingestion of a thread of asbestos fiber is the triggering event;

• the discovery of injury trigger:

o coverage applies when the injured party learns of his or her injury, regardless of when the injury occurred;

• the triple trigger:

o a multiple of all of the other triggers designed to provide the broadest coverage available to the claimant; and

• the continuous trigger:

o a continuous occurrence of, for example, environmental pollution triggers claims under multiple primary insurance policies.

The insured is entitled to secure coverage from a single policy of their choice that covers "all sums" incurred as damages "during the policy period," subject to that policy's limit of coverage. In such an instance, the insurers bear the burden of obtaining contribution from other applicable primary insurance policies as they deem necessary.

There has been a flood of asbestos-related litigation in the United States starting in the 1970s and culminating in the 1990s. Because corporations were filing bankruptcy as a result of the thousands of suits that claimed asbestos had caused damage over a period of time as long as 30 years, insurance coverage issues became vicious. Courts worked to provide the most coverage available to the insured so that money would be available to pay the "victims" who ingested asbestos fibers and contracted asbestosis or those who ingested silica dust and contracted silicosis, which eventually developed into cancer, mesothelioma, or lung cancer.

The result of the concern for the victims of asbestos caused legal abuse of the insurers and the corporations they insured. The law of unintended consequences raised its ugly head. Consider news reports concerning asbestosis and silicosis, where it has been disclosed that many claims were the result of fraud. For example, District Judge Janis Jack of the U.S. District Court for the Southern District of Texas conducted depositions of doctors and others who helped create multiple cases of silicosis. In In re Silica Products Liability Litigation, 398 F. Supp. 2d 563 (S.D. Tex. 2005), Judge Jack dealt with a fraudulent claim relating to asbestosis and silicosis. The judge concluded:

(1) silicosis diagnoses were unreliable;

(2) the joinder of the plaintiffs constituted an egregious misjoinder;

(3) the joinder of the workers' silicosis claims against multiple defendants did not constitute an egregious misjoinder;

(4) removing the defendants, who failed to allege the principal places of business of each corporate defendant, failed to show that complete diversity existed in any of the multidistrict litigation cases; and

(5) the law firm's filing and then persisting in the prosecution of silicosis claims, while recklessly disregarding the fact that there was no reliable basis for believing that every plaintiff had silicosis, constituted an unreasonable multiplication of the proceedings; therefore, the law firm was liable for expenses and costs for the Daubert hearings, in a case over which the court had subject matter jurisdiction.

National Public Radio reported in 2006 on one of the depositions of a doctor, who testified about the injuries he diagnosed in one of the plaintiffs:

Ray Harron from West Virginia, a doctor who reads x-rays taken by others and then gives opinions used in court, is responsible for at least 88,000 legal claims. In Judge Jack's court Dr. Herron's reputation was weakened when defense lawyers started producing evidence of double diagnoses.

In one courtroom exchange, a defense lawyer asked Harron how it was possible that his asbestos diagnosis of a man named Kimball seemed to disappear eight years later, when Harron diagnosed Kimball with silicosis. In the deposition the following occurred:

[Defense] LAWYER: "And as a matter of fact, you said that somebody with those fibers and scars in their lungs are gonna go to their grave with them, right?"

[Dr.] HARRON: "Right."

LAWYER: "Not Mr. Kimball."

The defense then displayed a later set of x-rays. In these films, Kimball now has silicosis, but his asbestosis has cleared up. Judge Jack pressed Harron to explain. She asked, "So now his asbestosis is gone?"

HARRON: "Well, I can't say that it's gone, your honor."

JUDGE JACK: "Well, where'd it go?"

HARRON: "Like I say, I don't know." ¹

Dr. Harron was later warned to obtain counsel to defend him against criminal charges of being involved in a fraud. He has since refused to testify and asserted his Fifth Amendment privilege against self-incrimination. NPR, in its report, summed up:

Judge Jack's methods of deposition and her ruling are beginning to have an impact around the country. In Florida, a judge has ordered silicosis plaintiff lawyers to produce detailed medical information on their claims. In Ohio, a state court handling 35,000 asbestos claims and 900 silica claims is considering calling hearings to depose the doctors the same way Jack did. And on Capitol Hill, the House Subcommittee on Commerce and Energy begins its investigation into the Mississippi lawsuits. Like a little legal pebble, the opinion of the nurse who became a federal judge is sending out ripples of change across the nation's court system.

In addition to Doctor Harron, one doctor withdrew hundreds of his silicosis diagnoses, saying he never meant for them to be considered actual diagnoses, thereby destroying the plaintiffs' cases on each of those discredited diagnoses. By the time the depositions were over, Judge Jack was appalled to find that 6,800 of the 10,000 silicosis claims also had asbestos claims. She said that Harron's testimony raised "great red flags of fraud," and concluded that the 10,000 silicosis claims were "manufactured for money."

Following Judge Jack's lead, Noxubee County, Mississippi Circuit Judge James T. Kitchens' threw out 4,202 silicosis claims in December 2005.

Deluged by plaintiffs from all over the country, Madison County in Illinois was the busiest asbestos court anywhere. The asbestos lawsuit industry was built on claimants taking aim at an alphabet soup list of major and sometimes not-so-major U.S. corporations.

In September 2005, the Beaumont, Texas firm, Brent Coon & Associates—with offices in St. Louis, Ohio, Mississippi, Louisiana, and California—targeted 87 defendants in each of the 139 asbestos suits and 49 defendants in each of the 33 silicosis suits filed in Madison County. The lawsuits were filed over a two-day period, in September 2005.

The Madison County Record reported in February 2006 that it interviewed eight of the plaintiffs who stated they participated in a screening in a mobile X-ray van at a union hall near Chicago in 2003. The plaintiffs, retired locomotive makers, did not know lawsuits had been filed on their behalf until a reporter told them. Some of them had never heard of Madison County. All of them lived far from the venue.

Broward County, Florida Circuit Judge David H. Krathen said the effect of fraudulent suits on the economic well-being of the country was "mind boggling." He ordered plaintiffs' attorneys, who filed 111 claims the day before a state law curbing asbestos and silicosis suits took effect, to provide detailed health histories about their clients and whether they had filed prior asbestos lawsuits. Krathen also required the plaintiffs to identify specific products that made them sick.

At the same time, the U.S. Congress, not wanting to be left out, held hearings on the silicosis lawsuits. The Congress was faced with nothing but silence in the course of questioning physicians involved in diagnosing multiple cases of silicosis. Three physicians who were called to testify at a House of Representatives hearing invoked their Fifth Amendment right against self-incrimination to avoid answering questions about their wholesale diagnosis of silicosis in patients whose claims were later dismissed after scrutiny in both federal and state courts.

The hearing before the House Energy and Commerce Committee's subcommittee on Oversight and Investigations was convened to probe approximately 10,000 silicosis diagnoses that Judge Jack labeled "manufactured for money," before remanding the claims to state courts, where they were later dismissed for lack of evidence.

The physicians called before the committee were Drs. James Ballard of Birmingham, Ala...