Truck Ins. Exchange v. Federal Ins. Co. CA2/5

BACKGROUND

The Cases Against Moldex and Its Coverage Dispute

The insured, Moldex, manufactures respiratory protection products used by industrial workers. Federal issued a commercial umbrella policy to Moldex, which was in effect from August 1, 1982 to June 1, 1984, and provided policy limits of $5 million. First State issued an umbrella policy that was effective from June 18, 1984 to June 18, 1985, which provided policy limits of $15 million. Truck issued a commercial liability policy to Moldex with a policy period from June 16 to July 25, 1986. The policy limits were $500,000 per occurrence and in the aggregate, exclusive of defense costs. Under the policy, Truck had a duty to defend any suit against Moldex seeking bodily injury or property damages, even if the allegations were groundless, false, or fraudulent. Beginning in 1986, lawsuits were filed against Moldex alleging exposure to silica and other hazardous substances because its respiratory protection devices failed. Moldex gave notice of the claims to primary liability insurers other than Truck, who defended and indemnified Moldex. When the primary insurers’ liability limits were exhausted in 2003, Moldex gave notice of…