that it notified its other insurers. Therefore, it is already
settled that Olin provided unreasonably late notice to Wausau;
the only question is whether Olin's coverage under the Wausau
policies is forfeited as a result.
Wausau argues that New York law applies, and that because New
York law provides that unreasonably late notice absolves an
insurer of any duty to defend or indemnify the insured, its
motion for partial summary judgment should be granted. Olin
contends that Connecticut law applies, and that under
Connecticut law the giving of late notice does not absolve an
insurer of liability unless the insurer is prejudiced by the
delay. See Aetna Casualty & Sur. Co. v. Murphy, 206 Conn. 409,
538 A.2d 219 (1988).
Federal courts sitting in diversity jurisdiction must apply
the choice of law rules of the forum state. Klaxon v. Stentor
Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85
L.Ed. 1477 (1941). New York law requires courts to apply the
law of the jurisdiction "which has the most significant
contacts with the matter in dispute." Auten v. Auten, 308 N.Y. 155,
160, 124 N.E.2d 99 (1954).
Applying the New York choice of law rule in Olin I, this
Court determined that all of the insurance policies at issue
were governed by New York law. See Olin I, 743 F. Supp. at
1048-49. Some of the policies examined in Olin I were
indistinguishable, from a choice of law perspective, from the
Wausau policies at issue here. Accordingly, the reasoning of
the prior Opinion requires the application of New York law
Olin's principal argument in favor of the application of
Connecticut law is that Olin used the services of its insurance
broker's Connecticut office from 1973 to 1977 and that this
factor tips the choice of law balance in favor of Connecticut
law. We disagree. The three Wausau policies at issue on this
motion are a small part of Olin's comprehensive multi-year
insurance program encompassing numerous primary and excess
policies. Olin's fortuitous decision to utilize the services of
its broker's Connecticut office for a four-year period, after
which Olin reverted to using the broker's New York office (as
it had done prior to 1973), does not alter the choice of law
In its complaint, Olin sought coverage for the Saltville
occurrence under all policies issued to it from 1950 to 1984.
During this entire period the center of gravity of Olin's
insurance program was New York. Olin maintained an office in
New York throughout the period, and the negotiation of its
liability insurance policies consistently involved the New York
offices of its broker. As such, we conclude that New York has
"the most significant contacts with the matter in dispute" in
this motion and in this case. Auten v. Auten, 308 N.Y. 155,
160, 124 N.E.2d 99 (1954). Because New York law applies,
Wausau's motion is granted for the reasons set forth in our
Olin I Opinion.
Even if Connecticut law applied to the Wausau motions the
result would be no different. Under Connecticut law, the
provision of late notice to an insurer raises a presumption of
prejudice which must be rebutted by the insured. See Aetna, 206
Conn. at 419, 538 A.2d at 224. The Connecticut courts have not
yet defined what constitutes prejudice to an insurer under
In this case, the undisputed facts show that by the time Olin
notified Wausau of the Saltville occurrence it had already
spent almost $2,000,000 and had entered into a consent decree
which required it to spend millions more. See Olin I, 743
F. Supp. at 1049-50. In addition, the cleanup efforts made by
Olin prior to the time it notified Wausau had, to some extent,
changed the physical appearance of the Saltville site. This
Court is of the opinion that under these circumstances, the
Connecticut Supreme Court would conclude that Wausau had been
prejudiced by Olin's delay in providing notice. Accordingly,
even if Connecticut law applied to the Wausau policies, we
would find as a matter of law that the presumption of prejudice
had not been rebutted.
For the reasons set forth above, Wausau's motion for partial
summary judgment is granted.
3. The Rule 54(b) Motions
In Olin II, this Court granted motions for partial summary
judgment made by Wausau and Hanover with respect to the
Huntsville DDT claims. See 762 F. Supp. at 561, 566. Those
defendants now seek entry of a final order dismissing Olin's
complaint against them insofar as it alleges liability arising
from the Huntsville occurrence.
Rule 54(b) of the Federal Rules of Civil Procedure provides
that a district court may, in its discretion, enter a final
judgment in a multi-claim or multi-party case where one claim
is resolved as to all parties, or where all claims are resolved
as to one party, upon a finding that there is no just reason to
delay entry of judgment. In a case such as this, which includes
claims relating to various different sites, it is appropriate
to consider claims arising from each separate site to be
separate "claims" for purposes of Rule 54(b). See Walker v.
Maccabees Mut. Life Ins. Co., 753 F.2d 599, 601 (7th Cir.
This Court's Olin II Opinion resolved all claims by Olin
against Wausau and Hanover arising out of the Huntsville
occurrence. Accordingly, the requirements of Rule 54(b) are
satisfied and this Court may, in its discretion, enter a final
judgment as to those defendants.
Olin argues that it has outstanding claims against the
defendants arising from the Huntsville occurrence because
defendant Insurance Company of North America's ("INA")
contribution based cross-claims were assigned to Olin as part
of its settlement with INA. However, these cross-claims are no
longer viable as against Wausau and Hanover because those
parties have no liability to Olin for the Huntsville
occurrence, see Robinson v. Shapiro, 646 F.2d 734, 739 (2d Cir.
1981), and because INA's settlement with Olin extinguished
INA's right to seek contribution from other insurers, see
Merchants Bank of New York v. Credit Suisse Bank, 585 F. Supp. 304,
309-10 (S.D.N.Y. 1984).
This Court concludes that there is no just reason to delay
entry of final judgment with respect to Wausau and Hanover. The
issues adjudicated in those parties' motions for summary
judgment are factually distinct from the other issues remaining
in this case; as such, there is no danger of piecemeal appeals.
If entry of a final judgment were delayed, it is likely that
the litigation costs of Wausau and Hanover would be increased.
Finally, in a complex, multi-site litigation such as this one,
it is in the interest of all parties to narrow the remaining
pool of pending issues. Accordingly, the Rule 54(b) motions are
For the reasons stated above, the motions for summary
judgment of Falcon/Commercial Union and Wausau are granted. The
Rule 54(b) motions are also granted. Wausau and Hanover are
directed to submit proposed Rule 54(b) orders on notice.