(New York, NY)—Dickstein Shapiro LLP’s Insurance Coverage Practice has secured a major all sums allocation ruling for its client, a global pump manufacturer, in a lawsuit seeking insurance coverage for asbestos liabilities. The ruling is significant because it is the first ever to allocate asbestos-related liabilities using an “all sums” allocation methodology under New York law.

“We are thrilled with the court’s decision,” said Robin Cohen, deputy practice leader of Dickstein Shapiro’s Insurance Coverage Practice and managing partner of the firm’s New York office. “The court’s careful and well-reasoned decision will likely be followed by many future courts grappling with the allocation issue.”

The firm’s client acquired a pump manufacturing business from another company in 1985. It is seeking to use insurance coverage that the previous owner purchased for that business between 1972 and 1985 to cover asbestos claims against it. In its ruling issued October 14, 2009, the Delaware Court of Chancery (Vice Chancellor Strine) held that the asset purchase contracts between the previous owner and the firm’s client unambiguously assigned to the client the right to use the policies to cover losses arising out of events that occurred prior to the purchase. The court rejected excess insurers’ contention that “anti-assignment” provisions in the policies barred this assignment. The court held that, under governing New York law, “anti-assignment” provisions are unenforceable as to claims arising out of events that occurred prior to the transfer, such as the asbestos claims against the firm’s client.

The court also ruled on the issue of whether responsibility for the client’s asbestos-related costs should be allocated among excess insurers using an “all sums” allocation (which allows an insured to collect all sums paid in connection with a claim from any insurer whose policy is triggered, up to the policy’s applicable limits) or a “pro rata” allocation (which would spread costs among multiple-triggered policies). The court held that New York courts have not adopted a rule of common law that imposes either approach on all insurance contracts, but instead requires that the court apply traditional contract interpretation principles. The court concluded that an all sums approach is the one embraced in the previous owner’s policies because those policies contained non-cumulation and prior insurance provisions, which expressly contemplated that the policies would pay all sums for injuries that occurred both during and outside the policy period.

The Dickstein Shapiro team is led by Robin L. Cohen and James R. Murray, and includes Keith McKenna, Elizabeth A. Sherwin, Paul Spackman, and Jack P. Winsbro.

Dickstein Shapiro’s premier Insurance Coverage Practice represents policyholders around the country in disputes with insurance carriers. More than 80 of the firm’s attorneys devote the majority of their time to insurance coverage matters. Dickstein Shapiro’s Insurance Coverage attorneys have recovered billions of dollars on behalf of their clients through settlements and litigation throughout the United States.

Dickstein Shapiro LLP
Dickstein Shapiro LLP, founded in 1953, is a multiservice law firm with more than 400 attorneys in Washington, DC, New York, and Los Angeles. The firm’s clients include more than 100 of the Fortune 500 companies, start-up ventures and entrepreneurs, multinational corporations, charitable organizations, and government officials. Dickstein Shapiro’s core practice groups—Antitrust & Dispute Resolution, Business & Securities Law, Corporate & Finance, Energy, Government Law & Strategy, Insurance Coverage, and Intellectual Property—involve the firm in virtually every major form of counseling, litigation, and advocacy. For additional information, please visit dicksteinshapiro.com.

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