Rossello v. Zurich Amer. Insurance

Patrick Rossello v. Zurich American Insurance Company, No. 24, September Term, 2019. Opinion by Getty, J. INSURANCE LAW—INDEMNITY—COMPREHENSIVE GENERAL LIABILITY POLICIES—APPORTIONMENT—PRO RATA—TRIGGER OF COVERAGE—INJURY-IN-FACT TRIGGER—CONTINUOUS TRIGGER The Court of Appeals held that damages from a continuous bodily injury judgment must be allocated on a pro rata, time-on-the-risk basis across all insured and insurable periods triggered by the plaintiff’s injuries. Informed by the language of Comprehensive General Liability policies and longstanding precedent adopted by the Court of Special Appeals and a majority of other jurisdictions, the Court affirmed the judgment of the Circuit Court for Baltimore City. Circuit Court for Baltimore City Case No. 24-X-14-000378 Argued: November 5, 2019 IN THE COURT OF APPEALS OF MARYLAND No. 24 September Term, 2019 PATRICK ROSSELLO v. ZURICH AMERICAN INSURANCE COMPANY Barbera, C.J. McDonald, Watts, Hotten, Getty, Booth, Greene, Clayton, Jr., (Senior Judge, Specially Assigned) JJ.

Opinion by Getty, J. Pursuant to Maryland Uniform Electronic Legal Materials Act (§§ 10-1601 et seq. of the State Government Article) this document is authentic. Filed: April 3, 2020 2020-09-09 10:45-04:00 Suzanne C. Johnson, Clerk Patrick Rossello was diagnosed with mesothelioma in 2013, nearly forty years after exposure to asbestos at his place of work in 1974. Mr. Rossello subsequently won a $2,682,847.26 judgment against the asbestos installer. Later, the Circuit Court for Baltimore City issued a writ of garnishment requiring the insurer of the asbestos installer to satisfy the judgment.

After a series of motions resulting in the court granting the insurer’s motion to stay the garnishment, both parties filed cross-motions for summary judgment. The question before the circuit court was how to allocate loss, if at all, among various triggered insurance policies or periods of no insurance because the asbestos installer was only insured by the insurer from 1974 to 1977 through four separate Comprehensive General Liability policies. Mr. Rossello argued that the insurer was liable for the entirety of the judgment spanning forty years, but the Circuit Court for Baltimore City found that Mr. Rossello’s damages must be allocated on a pro rata, time-on-the-risk basis across all insured and insurable periods triggered by Mr. Rossello’s injuries, i.e., 1974 to 1985—with 1985 being the last practicable year that the asbestos installer could have acquired asbestos liability insurance. Now, we consider whether the circuit court properly applied the pro rata allocation approach, or instead, whether it should have applied a joint- and-several approach that would have required the insurer to cover the entire judgment.

BACKGROUND A. The Comprehensive General Liability Policies. Lloyd E. Mitchell, Inc. (“Mitchell”) was a mechanical contractor that sold, distributed, and installed products containing asbestos until 1976 when it ceased all operations. From January 1, 1974 through July 31, 1977, Mitchell was insured by the Maryland Casualty Company1 under a series of standard Comprehensive General Liability (“CGL”)2 policy agreements (collectively, the “Policies”).3 Maryland Casualty Company issued one primary insurance policy and one umbrella/excess policy to Mitchell for each of the following policy periods: January 1, 1974 to January 1, 1975; January 1, 1975 to January 1, 1976; January 1, 1976 to January 1, 1977; and January 1, 1977 to July 31, 1977. The relevant policy language is substantively the same for each of the Policies.

The Policies require the Maryland Casualty Company to pay on behalf of Mitchell “all sums which the insured shall become legally obligated to pay as damages because 1 Maryland Casualty Company is the predecessor company to Respondent Zurich American Insurance Company. See Nina Andrews, Swiss Insurer to Get Maryland Casualty, N.Y. Times (Feb. 18, 1989), https://www.nytimes.com/1989/02/18/business/company-news-swiss-insurer-to-get- maryland-casualty.html, archived at https://perma.cc/J54Y-GNRA. 2 Most American insurance companies use CGL policy agreements—unremarkable form contracts that are devoid of any unique characteristics and that provide reliable terms and conditions. See, e.g., Lloyd E. Mitchell, Inc. v. Md. Cas. Co., 324 Md. 44 , 46 n.2 (1991) (“The comprehensive general liability policy is a policy standardized by the insurance industry.” (citing 2 R. Long, The Law of Liability Insurance, § 11.01 (1979); Comment, Insurance Coverage of Asbestosis Claims—Running for Cover or Coverage, 32 Emory L.J. 901 , 904 (1983); Comment, Liability Insurance for Insidious Disease: Who Picks Up the Tab?, 48 Fordham L. Rev. 656 , 666–67, n.50 (1980))); Lee H. Ogburn, The Progression of Trigger Litigation in Maryland—Determining the Appropriate Trigger of Coverage, Its Limitations, and Ramifications, 53 Md. L. Rev. 220 , 221 (1994) (“[M]ost businesses purchase [CGL policies] to protect against claims that third parties assert for bodily injury or property damage . . . .”). 3 Mitchell was insured prior to January 1, 1974, but those policies are not relevant to this appeal. 2 of . . . bodily injury . . . to which this insurance applies, caused by an occurrence.” The “Definitions” section of the Policies provide two related and important definitions: “bodily injury” means bodily injury, sickness or disease sustained by any person which occurs during the policy period, including death at any time resulting therefrom; “occurrence” means an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured.

The Policies contain two limits on Mitchell’s liability: a “per occurrence” limit and an “aggregate” limit. The per occurrence limit is the maximum amount Mitchell will pay for all losses resulting from any one occurrence. The aggregate limit is the maximum total amount Mitchell will pay for all insurable losses regardless of the number of occurrences or losses. Both the per occurrence and the aggregate limits are $1 million for Mitchell’s primary policies and $2 million for the umbrella/excess policies.

After it ceased operations in 1976, Mitchell’s last policy expired on July 31, 1977, after which it never again acquired insurance. B. Mr. Rossello’s Injury and Suit. In 1974, Petitioner Patrick Rossello worked in the Union Trust Bank Building in which Mitchell was performing construction and renovations. Mr. Rossello unknowingly inhaled asbestos originating from the construction products used by Mitchell.

Mr. Rossello’s injuries developed over the next forty years, manifesting in a mesothelioma diagnosis in 2013. Mr. Rossello brought this strict liability and negligent failure to warn action against Mitchell in the Circuit Court for Baltimore City. The case proceeded to trial in April 2016 and the jury returned a verdict in favor of Mr. Rossello for compensatory 3 damages in the amount of $8,114,166.79. The trial court reduced the judgment for the settlement of joint tortfeasors4 and entered a final judgment in the amount of $2,682,847.26 plus interest and costs.5 To collect his judgment, Mr. Rossello initiated garnishment proceedings against Respondent Zurich American Insurance Company (“Zurich”), successor by merger to Maryland Casualty Company.

The Circuit Court for Baltimore City issued a writ of garnishment directed at Zurich as insurer of Mitchell. After a series of motions resulting in the court granting Zurich’s motion to stay the garnishment, both parties filed cross- motions for summary judgment. The question before the circuit court was how much Zurich was responsible for paying on the judgment against Mitchell. Mr. Rossello contended that the entire $2,682,847.26 judgment should be satisfied by the 1974 CGL policy, not subject to the per occurrence or aggregate limits.

Zurich rebutted that the relevant period of time to allocate the judgment is forty years, 1974 through 2013, i.e., the year of exposure through the year of manifestation and diagnosis of mesothelioma. In that scenario, Zurich would be responsible for one-fortieth of the judgment (or $67,071.19) for each year of coverage, subject to aggregate limits. Zurich argued in the alternative that the relevant time period is twelve years, from 1974 through 1985—1985 being the last year 4 The circuit court directed judgment in favor of Mitchell as to its cross-claims against Cross-Defendants Georgia Pacific LLC and Union Carbide Corporation. That judgment and those parties are not relevant to this appeal. 5 The Court of Special Appeals affirmed the judgment.

Lloyd E. Mitchell, Inc. v. Rossello, No. 1191, Sept. Term, 2016, 2018 WL 3323799 (Md. Ct. Spec. App. July 6, 2018). 4 that asbestos risk insurance was available to Mitchell. In that scenario, $223,570.60 (one- twelfth of $2,682,847.26) would be the maximum amount recoverable from Zurich as to any one policy year from 1974 through 1977, while Mitchell stood self-insured from 1986 to 2013. In a written opinion and order, the circuit court rejected Mr. Rossello’s contention that he is entitled to the entire judgment under the 1974 policy.

The circuit court applied Maryland pro rata allocation principles, as adopted in Lloyd E. Mitchell, Inc. v. Maryland Casualty Co., 324 Md. 44 (1991) and Mayor and City Council of Baltimore v. Utica Mutual Insurance Co., 145 Md. App. 256 (2002).6 Under those principles, the court found that Mr. Rossello’s damages must be allocated on a pro rata, time-on-the-risk basis across all insured and insurable periods triggered by Mr. Rossello’s injuries—i.e., 1974 to 1985. The court explained: The instructions of Lloyd and Utica are properly applied in this case. Coverage under the Zurich CGL policy was first triggered by [Mr. Rossello’s] exposure and inhalation of asbestos in 1974, as the jury found on the evidence at trial. The medical evidence at trial established in the circumstances of the case, that the occurrence of [Mr. Rossello’s] bodily injury continued at least until manifestation of [Mr. Rossello’s] mesothelioma and diagnosis in 2013.

Consequent damages are allocable to the entire period of continuing bodily injury as insurable risk. However, such insurance was not available after 1985, and allocation of damages should extend through insured and insurable policy periods. Sums payable by Zurich will be allocated to the actual policy periods, while Mitchell remains responsible for allocations to insurable periods for which Mitchell elected not to secure coverage. 6 Some cases refer to Mayor and City Council of Baltimore v. Utica Mutual Insurance Co., 145 Md. App. 256 (2002), as “Utica Mutual.” In this Opinion, we refer to that case as “Utica.” 5 A question of fact remained as to the reasonable commercial availability of CGL or excess coverage for any period from 1977 through 1985. At trial, Mitchell did not present any evidence that coverage was unavailable.

Still, the court concluded that Zurich was liable for the pro rata portion allocable to each of its four policy periods, ordering garnishment “in the amount of $223,570.60 within the occurrence limit of the 1974” policy and “$223,570.60 for each policy year 1975, 1976, and 1977, subject to the aggregate limits for each year.” The circuit court further ordered the parties to proceed to discovery, specifically ordering Zurich to supplement interrogatory answers addressing aggregate limits. Zurich answered the pending discovery, stating that its expert witness determined that the amount owed pursuant to the allocation ruling was $613,233.00. Mr. Rossello initiated further discovery concerning the factual basis and methodology of the expert opinion, but the parties agreed that such discovery would be expensive and time- consuming. Nevertheless, a question remained about the year or years in which Mr. Rossello inhaled asbestos, which would have determined how much each payment was unaggregated versus aggregated.

Mr. Rossello and Zurich then jointly moved for entry of judgment pursuant to Maryland Rules 2-602(b) and 2-501(f),7 arguing that there was no just reason to delay entry 7 Maryland Rule 2-602(b) provides: If the court expressly determines in a written order that there is no just reason for delay, it may direct in the order the entry of a final judgment: (1) as to one or more but fewer than all of the claims or parties; or (2) pursuant to Rule 2-501(f)(3), for some but less than all of the amount requested in a claim seeking money relief only. 6 of the final judgment. In the motion, the parties agreed that Zurich owed Mr. Rossello at least $613,233.00 (the amount distilled by Zurich’s expert) under the circuit court’s twelve- year allocation order, while Mr. Rossello opined that Zurich could owe as much as $894,282.42.8 Regardless, the parties agreed that it was prudent to enter an immediate judgment of $613,233.00 under Maryland Rules 2-602(b) and 2-501(f). The circuit court agreed and granted the joint motion. The court noted: The expense of further discovery and obtaining a ruling on the precise amount Zurich owes under the allocation ruling will cost substantial time and money to obtain, manage, and analyze a large mass of confidential data; that effort, however, will not minimize or moot [Mr. Rossello’s] issues on appeal [that he is owed the entire judgment].

Furthermore, if Mr. Rossello successfully appeals [this circuit c]ourt’s allocation ruling, there will be no need to adjudicate the remaining disputes. If [Mr. Rossello] is unsuccessful, the appellate issue and fundamental question, whether or not to allocate the insured loss over time, will not be appealed twice even if the further discovery and revised calculations prove adversarial. If Mr. Rossello’s appeal of the 2-602(b) judgment fails, the only risk of lost time would be a second appeal to address how much principal Zurich owes within the range of $613,233.00 and $894,282.42. Maryland Rule 2-501(f)(3) provides: The court shall enter judgment in favor of or against the moving party if the motion and response show that there is no genuine dispute as to any material fact and that the party in whose favor judgment is entered is entitled to judgment as a matter of law.

By order pursuant to Rule 2-602(b), the court may direct entry of judgment . . . (3) for some but less than all of the amount requested when the claim for relief is for money only and the court reserves disposition of the balance of the amount requested. 8 $894,282.42 represents $223,570.60 (one-twelfth of $2,682,847.26) in full for each of the four policy years 1974, 1975, 1976, and 1977. 7 The circuit court thus ordered judgment in the amount of $613,233.00 in favor of Mr. Rossello. Two weeks later, Mr. Rossello noted an appeal to the Court of Special Appeals. While that proceeding was pending, Mr. Rossello filed, and we granted, a writ of certiorari, bypassing the Court of Special Appeals.

Rossello v. Zurich Am. Ins. Co., 464 Md. 587 (2019). Mr. Rossello presents the following question for our consideration, which we have rephrased:9 Did the circuit court properly prorate a bodily injury judgment to the insurer’s time on the risk instead of applying a joint-and-several approach that would have granted the judgment in full?

For the reasons that follow, we answer in the affirmative. The pro rata allocation approach—a longstanding precedent adopted by the Court of Special Appeals and a majority of other jurisdictions—is the correct standard. We affirm the judgment of the Circuit Court for Baltimore City. STANDARD OF REVIEW “The question of whether a trial court’s grant of summary judgment was proper is a question of law subject to de novo review on appeal.” United Servs.

Auto. Ass’n v. Riley, 393 Md. 55, 67 (2006) (quoting Myers v. Kayhoe, 391 Md. 188, 203 (2006)). “In reviewing a grant of summary judgment under Md. Rule 2-501, we independently review the record 9 Mr. Rossello presented the question as follows: “Does Maryland Law construe Respondent’s 1974 insurance policies as promising to pay the judgment in full, contrary to the law of some other states?” 8 to determine whether the parties properly generated a dispute of material fact and, if not, whether the moving party is entitled to judgment as a matter of law.” Id. (quoting Myers, 391 Md. at 203 ). “We review the record in the light most favorable to the nonmoving party and construe any reasonable inferences that may be drawn from the facts against the moving party.” Id. DISCUSSION “Where a continuous occurrence results in injury or damage that triggers coverage under more than one policy, an appropriate method for allocating the losses among the multiple policies (and the policyholder) must be devised.” Barry R. Ostrager & Thomas R. Newman, Handbook on Insurance Coverage Disputes, § 9.04 (19th ed. 2019).

This case requires the Court to “devise” an approach to insurance judgment payments for continuous bodily injury that occurred during and after the insurance policy periods. Zurich and Amici insurance companies10 urge the Court to adopt the pro rata approach, i.e., that each insurer is liable only for that period of time it was on the risk as opposed to the entire period during which bodily injury occurred. In Maryland, the pro rata approach was first adopted in 2002 by the Court of Special Appeals in Mayor and City Council of Baltimore v. Utica Mutual Insurance Co., 145 Md. App. 256 (2002), and has been reaffirmed by that court on several occasions, including as recently as January 31, 2020. 10 CX Reinsurance Company Limited, Travelers Casualty & Surety Company, and the Complex Insurance Claims Litigation Association each filed an amicus brief in support of Zurich. 9 See Penn. Nat’l Mut.

Cas. Ins. Co. v. Jeffers, 244 Md. App. 471 (2020).11 The majority of other states addressing the issue have adopted the pro rata approach.12 On the other hand, Mr. Rossello advocates for the minority joint and several or “all sums” approach.13 That approach would require Zurich to pay the entirety of the judgment against Mitchell but would allow Zurich to pursue claims of contribution against other 11 Jeffers was published after the briefings and oral arguments in this case. 12 Jurisdictions that have adopted pro-rata allocation include Colorado, Connecticut, Kansas, Kentucky, Louisiana, Massachusetts, Minnesota, Nebraska, New Hampshire, New Jersey, New York, South Carolina, Utah, and Vermont. See Public Serv.

Co. v. Wallis & Cos., 986 P.2d 924, 935 (Colo. 1999); Sec. Ins. Co. v. Lumbermens Mut. Cas. Co., 826 A.2d 107, 121 (Conn. 2003); Atchison, Topeka & Santa Fe Ry.

Co. v. Stonewall Ins. Co., 71 P.3d 1097, 1134 (Kan. 2003); Aetna Cas. & Sur. Co. v. Commonwealth, 179 S.W.3d 830, 842 (Ky. 2005); Arceneaux v. Amstar Corp., 200 So.3d 277, 286 (La. 2016);; Bos. Gas Co. v. Century Indem.

Co., 910 N.E.2d 290 , 311–16 (Mass. 2009); N. States Power Co. v. Fidelity & Cas. Co., 523 N.W.2d 657, 664 (Minn. 1994); Dutton-Lainson Co. v. Cont’l Ins. Co., 778 N.W.2d 433, 445 (Neb. 2010); EnergyNorth Natural Gas, Inc. v. Certain Underwriters at Lloyd’s, 934 A.2d 517, 526 (N.H. 2007); Owens-Illinois v. United Ins. Co., 650 A.2d 974 (N.J. 1994); Consol.

Edison Co. of N.Y., Inc. v. Allstate Ins. Co., 774 N.E.2d 687 , 695–96 (N.Y. 2002); Crossmann Cmtys. of N.C. v. Harleysville Mut. Ins. Co., 717 S.E.2d 589 , 599–601 (S.C. 2011); Sharon Steel Corp. v. Aetna Cas. & Sur.

Co., 931 P.2d 127 , 140–42 (Utah 1997); Towns v. N. Sec. Ins. Co., 964 A.2d 1150, 1167 (Vt. 2008). 13 States following some form of joint and several liability include California, Delaware, Indiana, Ohio, Oregon, Pennsylvania, Washington, and Wisconsin. See Armstrong World Indus. v. Aetna Cas. & Sur. Co., 52 Cal.

Rptr. 26 690, 708 (Cal. 1996); Hercules, Inc. v. AUI Ins. Co., 784 A.2d 481, 494 (Del. 2001); Allstate Ins. Co. v. Dana Corp., 759 N.E.2d 1049, 1058 (Ind. 2001); Goodyear Tire & Rubber Co. v. Aetna Cas. & Sur. Co., 769 N.E.2d 835 , 841 (Ohio 2002); J.H. France Refractories Co. v. Allstate Ins.

Co., 626 A.2d 502, 507 (Pa. 1993); Am. Nat’l Fire Ins. Co. v. B&L Trucking & Constr. Co., 951 P.2d 250 , 256–57 (Wash. 1998); Plastics Eng’g Co. v. Liberty Mut.

Ins. Co., 759 N.W.2d 613, 616 (Wis. 2009); see also Or. Rev. Stat. § 465.480 (3)(a) (providing joint and several allocation for environmental claims). 10 insurers that might have an obligation to indemnify or any tortfeasors who might be jointly and severally liable. In Utica, the Court of Special Appeals expressly rejected the joint and several approach.

Mr. Rossello avers that contract construction principles and sound public policy require us to adopt the joint and several approach because Zurich agreed to pay “all sums which the insured shall become legally obligated to pay as damages because of . . . bodily injury.” As discussed below, we agree with Zurich and will adopt the majority rule of pro rata allocation. In cases such as this one, exposure or injury stretching over many years often implicates multiple insurance policies or periods of no insurance and therefore implicates a continuous or injury-in-fact trigger. When that happens, the next concern is how to allocate loss, if at all, among the various triggered policies. We therefore begin with a discussion of trigger principles as they relate to claims of continuous bodily injury under CGL policies.

A. Triggers of Coverage and Continuous Triggers. “Resolving the issue of when coverage is triggered is important because only a triggered policy potentially covers the injury.” Lee H. Ogburn, The Progression of Trigger Litigation in Maryland: Determining the Appropriate Trigger of Coverage, Its Limitations, and Ramifications, 53 Md. L. Rev. 220 , 222 (1994) (hereinafter “Ogburn”). A liability insurance policy is “triggered” upon the occurrence of an event that causes the policy to respond to a claim. In other words, a “[t]rigger is a legal rule designed to determine when a policy must respond.” Utica, 145 Md. App. at 297 (quoting James M. Fischer, Insurance Coverage for Mass Exposure Tort Claims: The Debate Over the Appropriate Trigger Rule, 11 45 Drake L. Rev. 625 , 652 (1997)); see Owens-Illinois, Inc. v. United Ins. Co., 650 A.2d 974, 979 (N.J. 1994) (“[T]he term ‘trigger’ is merely a label for the event or events that under the terms of the insurance policy determines whether a policy must respond to a claim in a given set of circumstances.”).

CGL policies, such as the Policies issued to Mitchell, generally define the occurrence of “bodily injury” as a trigger. See, e.g., Riley v. United Servs. Auto. Ass’n, 161 Md. App. 573, 583 (2005), aff’d 393 Md. 55 (2006).

A trigger is easily applied when the event giving rise to the claim is a sudden accident causing an immediate injury. When a claim arises out of extended exposure to toxic substances, however, the question of when a policy is triggered is more complex. In extended exposure cases such as asbestos inhalation, “it is unclear whether the initial exposure to the substance, the manifestation of the disease, or some event during the latency period triggers coverage.” Ogburn at 222. Courts across the country have therefore diverged on trigger theories in extended exposure cases.

See Utica, 145 Md. App. at 297 (“Although the CGL policy is essentially a standard form, divergent theories have been applied to the trigger of coverage.”). There are four general approaches to the determination of when coverage is triggered under CGL policies in extended exposure cases, each with their respective benefits and pitfalls. These four trigger theories have been characterized as: (1) manifestation theory; (2) exposure theory; (3) continuous theory; and (4) injury-in-fact 12 theory.14 See, e.g., id. at 298 (quoting Owens-Illinois, 650 A.2d at 980–81) (explaining the “frequently offered theories for the trigger of coverage”). Under a manifestation trigger, courts define coverage under policies that were in effect when damage or injury manifests, i.e., when the harm becomes “reasonably capable of medical diagnosis.” Eagle-Picher Indus., Inc. v. Liberty Mut.

Ins. Co., 682 F.2d 12 , 25 (1st Cir. 1982); see Harford Mut. Ins. Co. v. Jacobson, 73 Md. App. 670, 684 (1988) (“[T]he date of an ‘occurrence’ for purposes of determining coverage under an insurance policy is the date when the harm is first discovered.”).

Under an exposure trigger, the policies triggered are those in effect when the claimant’s person or property was exposed to the substance that produced the damage. See, e.g., Ins. Co. of N. Am. v. Forty-Eight Insulations, Inc., 633 F.2d 1212 , 1222–23 (6th Cir. 1980); Hancock Labs., Inc. v. Admiral Ins. Co., 777 F.2d 520 , 524–25 (9th Cir. 1985).

A continuous trigger implicates policies in effect from the date of first exposure to the harmful substance through manifestation or discovery. See, e.g., Keene Corp. v. Ins. Co. of N. Am., 667 F.2d 1034 , 1050 (D.C. Cir. 1981). Lastly, the injury-in-fact trigger commences coverage when actual injury occurs, whether harm is manifest or not.

See, e.g., Utica, 145 Md. App. at 298 . The Court of Special Appeals has described the injury- in-fact trigger as follows: [T]he “injury-in-fact” (or “damages-in-fact”) approach . . . holds that coverage is triggered by a showing of actual injury or damage-producing 14 This is by no means an exhaustive list. Even among these four theories, courts have differed in applying them to the facts and terms of the insurance policies of the respective cases. 13 event. Under that theory, coverage is triggered by a real but undiscovered injury, proved in retrospect to have existed at the relevant time irrespective of the time the injury became manifest. [A]fter an injury it may be inferred, that the harm actually began sometime earlier.

Id. (quoting Owens-Illinois, 650 A.2d at 980–81 (citations, footnotes, original omissions, and internal quotation marks omitted)). In Maryland, the first appellate court to address trigger theories was the Court of Special Appeals in the 1988 case of Harford Mutual Insurance Co. v. Jacobson, 73 Md. App. 670 (1988). In Jacobson, the plaintiffs brought a lead paint personal injury action against the estate of a landlord.

The plaintiffs’ injuries and diagnoses of lead poisoning occurred prior to the inception of the insurance policy provided by the appellant-insurer. The court adopted a manifestation theory and held that the insurer was not liable to indemnify the landlord’s estate, its former insured: “[T]he date of an ‘occurrence’ for purposes of determining coverage under an insurance policy is the date when the harm is first discovered.” Id. at 684 (discussing, among others, Mraz v. Canadian Universal Ins. Co., Ltd., 804 F.2d 1325, 1328 (4th Cir. 1986) (“[I]n hazardous waste burial cases . . . the occurrence is judged by the time at which the leakage and damage are first discovered.”)). This Court swiftly departed from the manifestation theory just three years later in Lloyd E. Mitchell, Inc. v. Maryland Casualty Co., 324 Md. 44 (1991).

In an asbestos case similar to Mr. Rossello’s, the trial court relied on the holdings in Jacobson and Mraz to find that the insurance company was not required to indemnify Mitchell where the injuries did not manifest until after the insurance policies lapsed. The Court vacated the trial court’s judgment and held that the trial court “erred in adopting, as the sole trigger of coverage, 14 the ‘manifestation theory’ of coverage, namely, that coverage is not afforded until harm actually becomes manifest.” Id. at 62 . The Court scrutinized the plain meaning of the term “bodily injury” and concluded that because “bodily injury” occurs when asbestos is inhaled and retained in the lungs, . . . at a minimum, coverage under the policy to provide a defense and indemnification of the insured is triggered upon exposure to the insured’s asbestos products during the policy period by a person who suffers bodily injury as a result of that exposure. Id.

The Court did not expressly overrule Jacobson but distinguished it because it did not involve “an interpretation of the standard form comprehensive general liability insurance policy in the context of asbestos-related personal injury damage claims.” Id. A year later, the Court again disapproved of a trigger theory based exclusively on manifestation. In Harford County v. Harford Mutual Insurance Co., 327 Md. 418 (1992), a property damage case, the Court addressed whether “in the context of alleged environmental property damage,” the applicable insurance policies are “triggered for the policy periods when the damages take place, as opposed to the policy period when the damages are first discovered or ‘manifested.’” Id. at 420 . The damage resulted from landfill seepage and leakage that contaminated the underlying groundwater over several years.

In rejecting the manifestation theory, the Court concluded: Notwithstanding the difficulty that may be encountered in determining exactly when contaminants from a landfill may cause property damage, we hold that “manifestation” is not the sole trigger of coverage in environmental pollution cases. Rather, we conclude that coverage under the policies may be triggered during the policy period at a time earlier than the discovery or manifestation of the damage. 15 Id. at 435–36;15 see also Scottsdale Ins. Co. v. Am. Empire Surplus Lines Ins.

Co., 811 F. Supp. 210, 215 (D. Md. 1993) (commenting that “it is clear . . . that the transition from Mraz to Harford County demonstrates that exposure plus bodily injury (even if unmanifested) is now sufficient under Maryland law to trigger coverage”). In Utica, Judge Joseph F. Murphy, Jr., then Chief Judge of the Court of Special Appeals,16 addressed, among other things, trigger theories. 145 Md. App. at 295–307. The court adopted the “injury-in-fact” trigger theory as the “appropriate trigger of coverage rule for asbestos-in-building property damages,” id. at 297 , concluding that “[n]either the initial exposure (in this case the installation of asbestos in the City’s schools), nor the discovery (manifestation) of the injurious effects of the [Asbestos-Containing Building Materials], comports with the ‘occurrence’ language of the CGL policies, which is predicated in part on ‘the continuous or repeated exposure to conditions’ that is implicated by the continuing presence of asbestos in the City’s buildings.” Id. at 303 . The Court of Special Appeals expressly rejected trigger theories “based exclusively on exposure to harm or the manifestation of