Argued: January 23, 2018
from the United States District Court for the District of
Maryland, at Baltimore. William M. Nickerson, Senior District
Michael Killian, MORGAN, LEWIS & BOCKIUS LLP, Washington,
D.C., for Appellant.
Lee, STEPTOE & JOHNSON LLP, Washington, D.C., for
Jeffrey S. Raskin, San Francisco, California, William B. Nes,
MORGAN, LEWIS & BOCKIUS LLP, Washington, D.C., for
Catherine Cockerham, STEPTOE & JOHNSON LLP, Washington,
D.C., for Appellee
Paul Fire and Marine Insurance Company. William P. Shelley,
Jacob E. Cohn, GORDON & REES SCULLY MANSUKHANI LLP,
Philadelphia, Pennsylvania, for Appellee United States Fire
WILKINSON, AGEE, and WYNN, Circuit Judges.
insurance coverage dispute involves the applicability of two
insurers' policies to past, pending, and future
asbestos-related bodily injury claims against the Walter E.
Campbell Company ("WECCO"), the insured. WECCO
appeals several rulings by the U.S. District Court for the
District of Maryland against WECCO and in favor of United
States Fire Insurance Company ("U.S. Fire") and St.
Paul Fire & Marine Insurance Company ("St. Paul,
" and collectively with U.S. Fire, the
main questions at issue in this appeal-concerning both the
scope and limit of the Insurers' duties to defend and
indemnify WECCO-were answered over a decade ago by this Court
in In re Wallace & Gale Co., 385 F.3d 820,
833-34 (4th Cir. 2004). Unsatisfied with our precedent and
the effect it would have on its cause of action, WECCO asks
us to either consider these questions anew or certify them to
the Maryland Court of Appeals. For reasons stated below, we
decline to do either.
decades, WECCO-a now-defunct Maryland corporation-handled,
sold, installed, disturbed, and removed insulation materials
containing asbestos. By 1972, WECCO ceased the sale and use
of asbestos-containing products in its operations.
the mid-1980s, numerous individuals have sued WECCO alleging
asbestos-related bodily injury stemming from WECCO's
operations. From at least 1960 and through 1985, WECCO
purchased and maintained comprehensive general liability
insurance policies from several insurers, including St. Paul
and U.S. Fire. Pursuant to those policies, St. Paul, U.S.
Fire, and other insurers defended and indemnified WECCO
against hundreds of asbestos-related bodily injury claims,
paying claimants more than $60 million on WECCO's behalf
over several decades. However, though many claims against
WECCO remain pending, the Insurers now contend that, based on
the aggregate liability limits set forth in their policies
with WECCO, they no longer are contractually obligated to
defend and indemnify WECCO against such claims.
policies WECCO entered into with the Insurers are, for
purposes of this appeal, nearly identical with respect to the
type of coverage provided. Generally speaking, the policies
differentiate between (1) claims involving bodily injuries
that fall within the policies' "completed operations
hazard" and "products hazard" and (2) claims
involving bodily injuries that fall outside those
hazards-often referred to as "operations" claims.
WECCO and the Insurers rely on one particular policy, issued
by U.S. Fire, as an exemplar for the typical language
contained in each policy. This policy, like the others, first
provides that it "applies only to bodily injury . . .
which occurs during the policy
period." J.A. 938 (emphasis added). The policy
further provides that:
[t]he Company will pay on behalf of the insured all sums
which the insured shall become legally obligated to pay as
damages because of bodily injury . . . to which this
insurance applies, . . . arising out of the ownership,
maintenance or use of the insured premises and all operations
necessary or incidental to the business of the named insured
conducted at or from the insured premises . . ., but the
Company shall not be obligated to pay any claim or judgment
or to defend any suit after the applicable limit of the
Company's liability has been exhausted by payment of
judgments or settlements.
Id. at 941 (emphasis added). Not all claims are
subject to the same "applicable limit, "however. In
particular, the policy imposes an aggregate limit on the
insurer's obligation to indemnify WECCO for claims that
fall within the completed-operations and products hazards.
The "completed operations" hazard is defined, in
relevant part, to include:
bodily injury . . . arising out of operations . . ., but
only if the bodily injury . . . occurs after such
operations have been completed or abandoned and occurs
away from premises owned by or rented to the named insured.
"Operations" include materials, parts or equipment
furnished in connection therewith.
Id. at 947 (emphasis added). And the "products
hazard" is defined, in relevant part, to include:
bodily injury . . . arising out of the named insured's
products . . ., but only if the bodily injury . . . occurs
away from premises owned by or rented to the named insured
and after physical possession of such products has been
relinquished to others.
Id. With respect to these two hazards, the policy
provides that "the total liability of the Company for
all damages because of (1) all bodily injury included within
the completed operations hazard and (2) all bodily injury
included within the products hazard shall not exceed"
the aggregate limit set forth in the policy. Id. at
claims involving bodily injuries that fall under the
completed-operations and products hazards are subject to an
aggregate limit. Every dollar the insurer pays out to
indemnify WECCO against such claims counts against the
policy's aggregate limit. Once the aggregate limit is
reached, the insurer is no longer obligated to defend and
indemnify WECCO for completed-operations and products hazard
claims. On the other hand, operations claims-that is, bodily
injury claims that do not constitute completed-operations or
products hazards-are subject only to a "per
occurrence" limit, meaning that there is no aggregate
limit on the insurer's obligation to defend and indemnify
WECCO against operations claims.
and the Insurers disagree as to how to properly classify
past, pending, and future bodily injury claims against WECCO.
Specifically, WECCO contends that the Insurers have
mischaracterized settled operations claims as settled
completed-operations claims, resulting in a premature
exhaustion of the policies' aggregate limits for
completed-operations claims. Additionally, WECCO and the
Insurers disagree over the manner in which coverage liability
should be allocated among WECCO and the multiple insurance
policies triggered by an asbestos-related bodily
2003, the Insurers notified WECCO that the aggregate limits
contained in the primary policies issued to WECCO had
exhausted and that, as a result, the Insurers were no longer
obligated to defend or indemnify WECCO under these policies.
However, the Insurers continued to defend and indemnify WECCO
under their umbrella/excess policies until U.S. Fire stopped
in January 2009-after notifying WECCO that it had fully