Travelers Casualty & Surety Company v. Certain Underwriters at Lloyd’s of London

Travelers Casualty & Surety Company (Travelers) (plaintiff) provided primary, excess, and umbrella general-liability insurance to chemical manufacturers the Koppers Company (Koppers) and E.I. DuPont de Nemours & Company (DuPont). Travelers obtained catastrophic excess of loss reinsurance from Certain Underwriters at Lloyd’s of London (Lloyds) and other foreign reinsurance companies (defendants) for the excess-loss insurance policies. Travelers’ reinsurance treaties with the defendants for both the DuPont and Koppers policies contained similar language. These treaties required the defendants to pay Travelers for “each and every loss” incurred. “Each and every loss” included all losses arising from one “disaster and/or casualty.” “Disaster and/or casualty” included “each and every accident, occurrence and/or causative incident” and grouped losses arising from a “series” of accidents or occurrences into one loss. The treaties also included a “follow the fortunes” clause requiring that the defendants pay their share of Travelers’ settlements to Travelers upon a showing that Travelers paid these settlements. Environmental actions were brought against Koppers and DuPont arising from improper disposal of hazardous waste. Koppers sued Travelers seeking a declaration that Travelers was required to defend and indemnify Koppers, and Travelers settled with Koppers. Travelers treated the entire settlement as one disaster and/or casualty because the settlement arose from a common origin and could be traced to one act, namely Koppers’ improper waste disposal. Travelers sued the defendants seeking monetary damages and declaratory relief. DuPont sued Travelers seeking a declaratory judgment that Travelers must cover claims arising from pollution at hazardous waste sites. Travelers settled and sought reimbursement from the defendants. Travelers treated the entire settlement as one disaster and/or casualty. Travelers sued the defendants seeking monetary damages and declaratory relief. The defendants moved for summary judgment in both the Koppers and the DuPont lawsuits. The trial court granted the defendants’ motion. Travelers appealed.