Insurer Obligated for Only 40 Percent of Judgment in Lead Poisoning Case

February 29, 2012 | Insurance Coverage

After Attsgood Realty Company was sued for lead poisoning injuries allegedly sustained by a young child, the court entered judgment against Attsgood for $850,000. Attsgood’s insurer contended that the child had been exposed to lead poisoning in a house in Baltimore from January 17, 1991, to August 1995 (55 full months), and that it had insured Attsgood from January 1992 to November 1993, when Attsgood sold the property (22 months). The insurer therefore asked the court to find that it was obligated to indemnify Attsgood for no more than 40 percent of the total judgment (22/55), or $340,000.
The U.S. Court of Appeals for the Fourth Circuit agreed with the insurer, rejecting the argument that it was obligated to pay the complete judgment because the policy provided that it would “pay those sums that [Attsgood] becomes legally obligated to pay as damages because of ‘bodily injury.'” The Fourth Circuit observed that the insurer did not contract to “pay those sums that [Attsgood] becomes legally obligated to pay as damages because of ‘bodily injury'” without qualification. Rather, it explained, the policy applied to bodily injury that occurred “during the policy period.” This language, the circuit court explained, precluded it from holding the insurer liable for injuries that occurred when Attsgood did not own the property.

Moreover, the circuit court pointed out, in lead paint or continuous trigger cases such as this one, Maryland courts engage in a “pro rata by time-on-the-risk allocation” of liability under which each insurer is liable for that period of time it was on the risk compared to the entire period during which damages occurred.

Finally, the circuit court found that it was appropriate to use the infant plaintiff’s date of birth as the starting point in calculating the period in which she was exposed to lead poisoning instead of when she was 20 months old and diagnosed with lead poisoning. The circuit court noted that the infant plaintiff’s position in her underlying tort action was that she had suffered injuries from lead poisoning since at least her infancy – and that she even had argued that she had been “exposed to flaking, chipping and peeling lead paint and lead paint dust” from “[o]n or about 1990,” the year before she was born.

The case is Pennsylvania National Mut. Cas. Ins. Co. v. Roberts, Nos. 10-1987, 10-1988 (4th Cir. Feb. 3, 2012).

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