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E.R. SQUIBB & SONS v. ACCIDENT & CAS. INS. CO.

May 20, 1994

E.R. SQUIBB & SONS, INC., Plaintiff,
v.
ACCIDENT AND CASUALTY INSURANCE CO., et al., Defendants.


BRODERICK


The opinion of the court was delivered by: VINCENT L. BRODERICK

VINCENT L. BRODERICK, U.S.D.J.

 I

 This case involves controversies between E.R. Squibb & Sons ("Squibb"), a pharmaceutical manufacturer, and a number of its insurers in connection with product liability claims against Squibb arising out of injuries incurred by users of the product diethylstilbestrol ("DES"). By memorandum order dated April 21, 1992, ER Squibb & Sons v. Accident & Cas Ins Co, 1992 WL 7327, 1992 U.S. Dist. LEXIS 6255 (SDNY 1992) (the "1992 order"), I granted partial summary judgment in favor of Squibb concerning criteria for liability for defense costs.

 The remaining parties defendant are all so-called "excess carriers," which by the terms of the policies they issued to Squibb, assumed responsibility in the situation where direct or primary insurance would be - or had been - exhausted.

 The parties have now filed motions and cross-motions for partial summary judgment with respect to the remaining issues, which are those pertaining to excess carriers. Summary judgment is granted to the extent described below pursuant to Rule 56(d) of the Federal Rules of Civil Procedure:

 (a) Applicability of the policies at issue in this case is triggered, in each instance in which there are ill effects of DES on users or on their children or grandchildren as a result of usage during pregnancy (1) by initial exposure to DES and (2) by each subsequent adverse development affecting those who have used DES or their children or grandchildren, including initial and ultimate manifestations or diagnoses of any ill consequences of such use.

 (b) Under the language of the policies issued by each of the excess carriers, the excess carrier is liable when the underlying policy limits of the primary carrier or carriers covering the period of time involved is exhausted, whether by payment or by arm's length settlement with the insured.

 (d) Under the language of the excess carriers' policies, those carriers are obligated to follow the criteria for payment agreed upon in settlements between Squibb and the primary carrier or carriers whose policy limits have been exhausted.

 (e) All relevant policy limits must be determined with respect to each excess carrier exclusively from the policy issued by the carrier or from supplemental documents signed on behalf of that carrier.

 The motions of several defendants to dismiss the complaint on grounds of absence of a case or controversy are denied. All motions not otherwise disposed of are denied without prejudice. Issues concerning payment of defense costs were addressed in the 1992 order and are not treated here.

 II

 The principal question presented by the parties concerns what events constitute injury under policy provisions triggering coverage upon "injury," "resultant . . . injury," "bodily injury," or an "occurrence" or event causing any form of such injury. The complex medical evidence submitted by the parties is consistent on the one point critical here: harm begins as soon as DES is ingested by the user, but the effects of DES may depend on other independent events occurring thereafter and affecting the user or her children so that symptoms may appear at differing times or with differing severity. In some cases injury is evident at birth, in some symptoms may become progressively severe, and in some harm is never detected. In light of these facts and in view of ...


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