Pentair Water Treatment (OH) Co. v. Continental Ins. Co.
(S.D.N.Y. Nov. 16, 2009)
The District Court for the Southern District of New York ordered Continental Insurance Company to disclose various underwriting documents and produce underwriting witnesses in a dispute over insurance coverage for a cruise ship outbreak of Legionnaires’ Disease. In 1994, passengers on the cruise ship Horizon became ill after an outbreak of Legionnaire’s Disease. The outbreak was traced to the whirlpool spa on the vessel and, specifically to its filter, which had been manufactured and distributed by the plaintiff, Pentair, formerly known as Essef Corp. Many of the passengers who fell ill sued the cruise ship line, Celebrity Cruises, which, in turn, cross-claimed against Pentair. Ultimately, Pentair was found 70% liable for the outbreak. A jury awarded the plaintiffs $2.6 million in compensatory damages. They also found Pentair liable for $7 million in punitive damages. In a related action commenced by the cruise ship line for damages including lost profits, judgment was entered against Pentair for $30 million.
Pentair sought payment under an excess umbrella liability policy issued by Continental. Continental, however, denied coverage based on the pollution exclusion, among other grounds. Pentair sued for coverage under the policy. During discovery, Pentair requested that Continental produce documents relating to any pollution exclusion clause that Continental used during the relevant time period. Continental refused, arguing that it was only obligated to disclose documents related to the specific language used by Continental in Pentair’s policy. The court disagreed, finding that information concerning other pollution exclusions employed by Continental could well shed light on the meaning of the pollution exclusion in Pentair’s case. The court also ordered Continental to produce witnesses to testify about Continental’s underwriting practices and manuals during the period of 1993-95.
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Carrie Appler and Joanna Roberto
https://www.goldbergsegalla.com/attorneys/Appler.html
https://www.goldbergsegalla.com/attorneys/Roberto.html