Diversity Jurisdiction
A federal circuit court will not make a determination of law in a diversity matter where the questions of law have not been determined by the highest state court. Plastics Engineering Company v. Liberty Mutual Insurance Company, Nos. 06-4397 & 07-1041, Seventh U.S. Circuit Court of Appeals, Jan. 22, 2008.
Plenco, a Wisconsin Corporation, manufactured molding compounds since 1934 and was named in hundreds of lawsuits for claims arising from individuals' exposure to the company's asbestos-containing products manufactured between 1950 and 1983. Liberty Mutual, a Massachusetts corporation, provided primary general liability insurance policies to Plenco beginning in September 1957. In 1970, Plenco began purchasing excess umbrella liability polices from Liberty Mutual, and continued to do so until 2003 (except for a two-year period). In 2004, Liberty Mutual advised Plenco that it would only pay its 'proportionate share of reasonable and necessary defense costs,' but continued to pay all of Plenco's defense costs under a reservation of rights. In September 2004, Plenco commenced a diversity action seeking a declaratory judgment that Liberty Mutual was obligated, under the insurance policies, to fully defend and indemnify Plenco in connection with all of Plenco's existing and future asbestos-related lawsuits. Liberty Mutual sought a declaratory judgment that it was not obligated to pay certain defense and indemnification expenses, including some it had already paid on behalf of Plenco, and that it was entitled to a refund for overpaid amounts. The district court held that: 1) each individual person's injury caused by exposure to Plenco's asbestos- containing products constituted a separate 'occurrence'; 2) when an injury was sustained over numerous, successive policy terms, the policy's non-cumulation provision limited Liberty Mutual's obligation for an individual claimant's recovery to the maximum amount allowed in a single triggered policy for an occurrence; and 3) Liberty Mutual was obligated to pay all sums accruing from an injury that triggered one policy and was not entitled to a pro rata contribution from Plenco where the injury in question occurred partly within and partly outside the Liberty Mutual policy period. Liberty Mutual appealed, and the Seventh U.S. Circuit Court of Appeals concluded that certain questions needed to be certified to the Wisconsin Supreme Court for it to properly make a determination from the district court.
Diversity Jurisdiction
A federal circuit court will not make a determination of law in a diversity matter where the questions of law have not been determined by the highest state court. Plastics Engineering Company v. Liberty Mutual Insurance Company, Nos. 06-4397 & 07-1041, Seventh U.S. Circuit Court of Appeals, Jan. 22, 2008.
Plenco, a Wisconsin Corporation, manufactured molding compounds since 1934 and was named in hundreds of lawsuits for claims arising from individuals' exposure to the company's asbestos-containing products manufactured between 1950 and 1983. Liberty Mutual, a Massachusetts corporation, provided primary general liability insurance policies to Plenco beginning in September 1957. In 1970, Plenco began purchasing excess umbrella liability polices from Liberty Mutual, and continued to do so until 2003 (except for a two-year period). In 2004, Liberty Mutual advised Plenco that it would only pay its 'proportionate share of reasonable and necessary defense costs,' but continued to pay all of Plenco's defense costs under a reservation of rights. In September 2004, Plenco commenced a diversity action seeking a declaratory judgment that Liberty Mutual was obligated, under the insurance policies, to fully defend and indemnify Plenco in connection with all of Plenco's existing and future asbestos-related lawsuits. Liberty Mutual sought a declaratory judgment that it was not obligated to pay certain defense and indemnification expenses, including some it had already paid on behalf of Plenco, and that it was entitled to a refund for overpaid amounts. The district court held that: 1) each individual person's injury caused by exposure to Plenco's asbestos- containing products constituted a separate 'occurrence'; 2) when an injury was sustained over numerous, successive policy terms, the policy's non-cumulation provision limited Liberty Mutual's obligation for an individual claimant's recovery to the maximum amount allowed in a single triggered policy for an occurrence; and 3) Liberty Mutual was obligated to pay all sums accruing from an injury that triggered one policy and was not entitled to a pro rata contribution from Plenco where the injury in question occurred partly within and partly outside the Liberty Mutual policy period. Liberty Mutual appealed, and the Seventh U.S. Circuit Court of Appeals concluded that certain questions needed to be certified to the Wisconsin Supreme Court for it to properly make a determination from the district court.
