In Re Thorpe Insulation Co.

This appeal involves Continental Insurance Company’s (“Continental”) pursuit of a breach of contract claim against Thorpe Insulation Company (“Thorpe”) in Thorpe’s Chapter 11 bankruptcy proceeding. The district court affirmed the bankruptcy court’s orders denying Continental’s motion to compel arbitration and disallowing its claim. We now affirm.

I

A

Thorpe distributed and installed asbestos-containing products from 1948 to 1972. About 12,000 claims for asbestos-related injuries or deaths have been brought against Thorpe. Thorpe’s insurers, including Continental, have paid more than $180 million defending and indemnifying Thorpe for these claims. In 1985, Continental and Thorpe entered into the Wellington Agreement, an omnibus insurance coverage and claims handling agreement between asbestos producers and their insurers. The Wellington Agreement provides for binding arbitration of coverage disputes.

In 1998, Continental told Thorpe that Thorpe had exhausted its coverage under Continental’s insurance policies and ceased indemnifying Thorpe. Thorpe then sought, for the first time, “non-products” coverage under Continental’s policies, asserting that such “non-products”…