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March 6, 1985

INSURANCE COMPANY OF NORTH AMERICA, the Hanover Insurance Company (as successor to Massachusetts Bonding and Insurance Company), American Home Assurance Company, American Re-Insurance Company, Certain Underwriters at Lloyd's, London, Commercial Union Insurance Company (as successor to Employers' Liability Assurance Corporation, Ltd., and Employers Commercial Union Insurance Company of America), Continental Casualty Company, Employers Insurance of Wausau a Mutual Company, Falcon Insurance Company (as successor to Employers' Surplus Lines Insurance Company), Federal Insurance Company, Fireman's Fund Insurance Company, Great American Insurance Company, the Home Insurance Company, Lexington Insurance Company, London & Edinburgh Insurance Company Limited, National American Insurance Company of New York (as successor to Stuyvesant Insurance Company), National Union Fire Insurance Company of Pittsburgh, North River Insurance Company, Northbrook Excess and Surplus Insurance Company, and Transit Casualty Company, Defendants.

The opinion of the court was delivered by: MACMAHON

MacMAHON, District Judge.

Plaintiff Olin Corporation ("Olin") moves, pursuant to Rule 56, Fed.R.Civ.P., for partial summary judgment against defendant Insurance Company of North America ("INA") declaring that INA is liable for 100% of Olin's defense costs incurred defending the underlying claims. INA cross-moves for partial summary judgment declaring that defense costs should be paid either equally or proportionately by INA, Olin, and the three other primary insurers, namely, Hanover Insurance Company ("Hanover"), National Union Fire Insurance Company ("National"), and Employer's Insurance of Wausau ("Wausau"). Under Rule 53(e), Fed.R.Civ.P., INA also seeks reversal of the rulings of the Special Master sustaining certain claims of settlement privilege asserted by Olin under Rule 408, Fed.R.Evid.


 This action arises from several suits brought against Olin for bodily injury and property damage resulting from dichlorodiphenyltrichloroethane ("DDT"). The individual plaintiffs, numbering in the thousands, alleged that their injuries occurred during the period 1947 to the date of the filing of the suit. Olin defended the suits at a cost of $7.3 million and settled with the majority of the plaintiffs for $24 million. Olin seeks to recover defense costs on this motion.

 Olin first became involved in the manufacture of DDT in 1954, when it acquired the Calabama Chemical Company which had been manufacturing the chemical since 1947. Olin ceased production of DDT on June 30, 1970.

 Massachusetts Bonding and Insurance Company, now Hanover, provided primary insurance coverage to Olin from January 1, 1954 to January 1, 1956. INA provided coverage from at least June 1, 1955 through Hanuary 1, 1974, although there is a dispute as to the existence and applicability of INA policies covering the period from 1947 to 1954. During the period January 1, 1974 to March 1, 1977, Wausau provided primary insurance coverage to Olin. National has provided primary insurance coverage from March 1, 1977 to date.


 Defense Costs

 We cannot resolve issues of fact on a motion for summary judgment. Heyman v. Commerce & Industry Ins. Co., 524 F.2d 1317, 1319 (2d Cir.1975). The burden is on the moving party to demonstrate the absence of any material factual issue genuinely in dispute. Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 444 (2d Cir.1980). Where a contract, including an insurance contract, is susceptible of at least two fairly reasonable meanings, the parties have a right to present extrinsic evidence, and, thus, summary judgment is precluded. Schering v. Home Ins. Co., 712 F.2d 4, 9 (2d Cir.1983).

 Olin asserts that INA is liable for the entire defense costs of the DDT cases even though there were periods during which Olin was uninsured or self-insured. Essentially, Olin argues that once a carrier is at risk, provided the insurer has not excluded the possibility that an uncovered claim is pleaded in a complaint, it is liable for all defense costs on all claims, potentially covered as well as potentially uncovered. Once a policy is triggered, the insurer must pay defense costs for all claims.

 INA admits that it is liable for some of the defense costs, but argues that Olin is liable for defense costs for claims arising during the period 1947 to 1954, when Olin was uninsured or self-insured, and for claims arising during 1971 to 1974 under an endorsement to policy SRL 2217 in which Olin agreed to share defense costs.

 It is well settled that the duty to defend is broader than the duty to indemnify. American Home Pdts. Corp. v. Liberty Mut. Ins. Co., 565 F. Supp. 1485, 1499 (S.D.N.Y.1983), aff'd. as mod., 748 F.2d 760 (2d Cir.1984). An insurance company has a duty to defend, even meritless suits, "so long as they could conceivably result in a liability covered by the policy" but "has no duty to defend claims which may have merit, but for which liability coverage does not exist because injury occurred outside the policy period." Id., 565 F. Supp. at 1499.

 In light of this broad duty to defend, INA is liable for defense costs, even for claims which appear meritless, so long as the policy is triggered. The INA comprehensive general liability policies issued to Olin applied to occurrences or accidents during the respective policy periods. The question for us is whether INA's policies are triggered.

 Coverage is triggered upon the occurrence of an injury in fact during the policy period. Id., 748 F.2d at 765. To establish liability, "the insured must prove the cause of the occurrence (accident or exposure), the result (injury, sickness, or disease), and that the result occurred during the policy period." Id., 565 F. Supp. at 1497. The occurrence must arise during the policy period and ...

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