Millennium Holdings LLC, Plaintiff, The Northern Assurance Company of America, Plaintiff-Appellant, Certain Underwriters at Lloyd's, et al., Intervenor Plaintiffs-Appellants,
The Glidden Company, now known as Akzo Nobel Paints, et al., Defendants-Respondents.
Zuckerman Spaeder LLP, Washington, D.C. (Jason M. Knott of
the bar of the District of Columbia, admitted pro hac vice,
of counsel), for appellants.
Debevoise & Plimpton LLP, New York (Maura K. Monaghan and
James Amler of counsel), for respondents.
Sweeny, J.P., Renwick, Andrias, Moskowitz, Manzanet-Daniels,
remittitur from the Court of Appeals (27 N.Y.3d 406');">27 N.Y.3d 406');">27 N.Y.3d 406');">27 N.Y.3d 406');">27 N.Y.3d 406');">27 N.Y.3d 406');">27 N.Y.3d 406');">27 N.Y.3d 406 [May 5,
2016]), order, Supreme Court, New York County (Shirley Werner
Kornreich, J.), entered November 26, 2013, which granted
defendants the Glidden Company, now known as Akzo Nobel
Paints LLC and Akzo Nobel Paints LLC's (collectively
ANP), motion for summary judgment dismissing the complaint,
modified, on the law, to remand for a limited determination
of whether the insurers are entitled to recover defense costs
as against ANP on the basis of express subrogation, and
otherwise affirmed, without costs.
Original Glidden and SCM
original Glidden was an Ohio corporation that manufactured
and sold lead-based paints and coatings. In 1924, Glidden
acquired Euston Lead Company, a producer of lead pigments
used in paints. The lead pigment was a key ingredient in
Glidden's lead paint, which was sold under the Glidden
name for four decades. In 1958, Glidden sold the lead pigment
operation to Dumont Airplane and Marine Instruments, Inc. and
exited the lead pigment business. Within several years it
stopped selling paint containing lead.
1967, Glidden was acquired by and merged into SCM
Corporation. Glidden's paint business was housed in
SCM's Glidden-Durkee Division. In 1976, the paint
business was transferred to the Coatings & Resins
Division. The pigments business - limited to non-lead
pigments following the sale of Euston - was placed in the
chemical/metallurgical division of SCM.
Underwriters at Lloyd's, London and certain London market
insurance companies (London), subscribed to primary and
excess policies in favor of Glidden and SCM's
Glidden-Durkee Division for the period from 1962 to 1970.
Plaintiff Northern Assurance Company of America's
predecessor issued an excess policy to SCM for the period
June 27, 1968 to January 1, 1970. The policies covered
liability for property damage sustained during the policy
period. The primary policy issued between 1965 and 1968, to
which the excess policies followed form, contained the
following express subrogation clause:
Upon payment of any claim, demand, suit or judgment covered
hereby the Underwriters (or other insurers or the Assured in
the event that more than one insurer or the Assured as
self-insurer has paid any part of such claim it being
understood that other insurance or excess insurance or
self-insurance is permitted) shall be subrogated to all
rights which the Assured may have against any and every
person, partnership or corporation in respect of such claim,
demand, suit or judgment..."
1985, Hanson Trust PLC attempted a hostile takeover of SCM.
As part of an effort to thwart the takeover, SCM in September
1985 transferred the assets of the domestic pigments business
to ABC Chemicals, a newly-formed and wholly-owned subsidiary
1986, Hanson succeeded in acquiring SCM in a hostile
takeover. The plan of liquidation and dissolution distributed
the company's remaining assets and liabilities among 20
"fan companies" known as HSCM 1 through 20. The
paints, resins, coatings, caulking and adhesives business
(i.e., the Coatings & Resins Division) was transferred to
HSCM-6. The memorandum of distribution in liquidation between
SCM and HSCM-6 provided that "HSCM-6 hereby assumes all
of the obligations and liabilities relating to the Business,
including all claims, whether asserted or unasserted, known
or unknown, contingent or otherwise... attributable to all
periods prior to the date hereof."
another memorandum of distribution in liquidation, SCM
distributed to HSCM-20 the assets "constitut[ing] all
the remaining assets of SCM" that had not been
transferred to other fan companies. Those assets included the
stock of the new fan company subsidiaries, as well as the
stock of ABC Chemicals, which then owned the pigments
business. HSCM-20 assumed all of the obligations and
liabilities related to such assets.
HSCM-20 separately owned both SCM's paint business
(HSCM-6) and SCM's pigment business (ABC Chemicals).
thereafter, HSCM-20 sold HSCM-6 to ICI American Holdings, a
subsidiary of Imperial Chemical Industries, PLC. The sale was
memorialized in a purchase agreement dated August 14, 1986.
HSCM-6 was later renamed "The Glidden Company, "
the predecessor of defendant ANP herein.
the asset purchase agreement, Millennium Holdings LLC and its
predecessors were required to indemnify ANP and its
predecessors from 1986 through 1994 for liabilities arising
out of or resulting from "environmental events or
environmental conditions" resulting from the use,
manufacture, handling, etc., of "materials, substances
or wastes in, about or relating to the Business, including,
without limitation, the paints, coatings, resins, adhesives,
caulkings or related businesses owned or held by any
predecessor entity (Predecessor Business') or formerly
owned or held by Seller, HSCM-6, any of the Subsidiaries or
any predecessor of any of the foregoing (Former
Business'), and to indemnify ANP in respect of any
personal injury or property damage claims of or relating to
the Business, the Predecessor Business or the Former
its predecessors were required to indemnify Millennium and
its predecessors thereafter "against and in respect of
[claims]... relating to the Business arising from or relating
to acts, omissions, events or conditions of or relating to
the Business, the Predecessor Business or the Former Business
occurring or existing prior to, on or after the Closing or
otherwise arising out of or relating to the conduct of the
Business, the Predecessor Business or the Former Business...
for matters referred to in Section 9.1(b)[i.e., environmental
liabilities], 9.1[c] [i.e., personal injury and property
damage claims], and 9.1(e) [i.e., other claims]."
in 1987, a number of lawsuits were filed against ANP (the
paint company) and Millennium (the pigment company), alleging
property damage, personal injuries, and/or public nuisance
arising from the presence of old lead paint in inner city
1986 onward, Millennium indemnified ANP in accordance with
the asset purchase agreement. Shortly before the end of
Millennium's indemnification period, a dispute arose as
to the scope of ANP's obligations (scheduled to commence
in 1994 under the terms of the asset purchase agreement). ANP
argued that it was not obligated to provide Millennium with
indemnification for "pigment cases, " but rather,
only paint cases, contending that "pigment cases"
fell outside the scope of the indemnity.
dispute led to litigation in Ohio (Glidden Co. v HM
Holdings, Case. No. 269218, Ohio Court of Common Pleas
1994) and New York (HM Holdings, Inc. v ICI American
Holdings and The Glidden Company, Index No. 110533/94,
Sup Ct, NY County 1994). Both litigations were settled in
2000 with the parties executing an amended purchase
agreement. Millennium assumed the rights and obligations of
HSCM-20, including the pigment business, and ANP assumed the
rights of ICI and ICI American ...