American Cyanamid Co. v. American Home Assurance Co.

This is an action for declaratory relief brought by an insured, American Cyanamid Company, to determine the duty of its various insurers to defend and indemnify American Cyanamid in an underlying lawsuit for anticompetitive conduct. The action was brought against three primary insurers and numerous excess insurers, all of whose policies were in effect from 1966 to 1986.

The three primary insurers—Insurance Company of North America (INA), American Home Assurance Company (AHA) and Commercial Union (CU) —moved for summary adjudication of the duty to defend. The trial court granted the motion, finding no duty to defend. Plaintiff, American Cyanamid, appeals.

Facts

The Underlying Lawsuit

American Cyanamid is a research-based biotechnology and chemical company which since 1967 has developed, manufactured and sold “chemical light products,” e.g., chemical lightsticks, safety lights, light wands and other products used especially by the United States military.

Chemical Device Corp. (CDC) is also in the business of manufacturing and selling chemical light products, but it has been in existence only since January 1986.

In 1989 CDC filed suit in federal court against American…