Kotula and Buckley Victorious in Significant Product Liability Coverage Case

May 3, 2018 | Insurance Coverage

The United States District Court for the Middle District of Pennsylvania awarded our client, Great American Assurance Company, full summary judgment in an insurance coverage dispute concerning an underlying liability suit, finding that there was no occurrence resulting in property damage to trigger the insurance.  In Sapa Extrusions, Inc. v. Liberty Mutual Ins. Co., Case No. 3:13-2827, 2018 U.S. Dist. LEXIS 73162 (M.D. Pa. May 1, 2018), Sapa Extrusions sought insurance coverage from its insurers for the costs of litigating and settling an underlying action brought by Marvin Windows involving repair costs for approximately 25,000 windows and doors on behalf of thousands of claimants who purchased products incorporating Sapa products.  Sapa supplied Marvin with aluminum window extrusions, which are custom-cut metal window fittings made from aluminum alloys and coated with primer and topcoat.  Over time, the paint on the aluminum-clad portions of many of Marvin’s windows and doors began oxidizing, which caused Marvin to undertake extensive and expensive repairs.  Marvin filed suit against Sapa in federal court in Minnesota.  Marvin’s trial brief in the underlying action alleged that Marvin suffered out-of-pocket damages of over $57 million and that it would show additional future damages of over $49 million.  The underlying action settled before trial.  Sapa sought insurance coverage from its insurers.  Following discovery, Great American and the other insurers, as well as Sapa, filed motions for summary judgment.  In its decision granting Great American’s and the other insurers’ motions for summary judgment, the Court held that “[t]he facts alleged in Marvin’s complaint do not amount to an ‘occurrence’” in the insurance policies at issue.  Accordingly, the Court ruled that the insurers had no duty to defend Sapa in the underlying action, and “[t]hey consequently have no duty to indemnify Sapa.”

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