Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Onebeacon America Insurance Co. v. Celanese Corp.

Appeals Court of Massachusetts, Suffolk

October 16, 2017

ONEBEACON AMERICA INSURANCE COMPANY
v.
CELANESE CORPORATION

          Heard: November 18, 2016

         Civil action commenced in the Superior Court Department on March 2, 2010.

         The case was heard by Christine M. Roach, J., on motions for summary judgment, and an award of attorney's fees was entered by her.

          Kevin J. O'Connor (Kara A. Loridas also present) for the plaintiff.

          Michael John Miguel for the defendant.

          Present: Trainor, Meade, & Hanlon, JJ.

          TRAINOR, J.

         This appeal arises from a series of cross motions for summary judgment. The plaintiff, OneBeacon America Insurance Company (OneBeacon), appeals from so much of the final judgment as awarded reasonable and necessary defense costs to its insured, Celanese Corporation (Celanese), that Celanese incurred from April 13, 2009, through May 27, 2011.[1] On May 27, 2011, a judge of the Superior Court determined that OneBeacon was entitled to take control of Celanese's defense as of April 13, 2009 (see note 1, supra). The issue on appeal is whether that determination precludes Celanese from receiving any reimbursement for defense of the underlying claims during the period of time when the question of control over the defense was being litigated. OneBeacon argues that it is not liable for any defense costs incurred by Celanese during that period of time because OneBeacon offered to defend Celanese without a reservation of rights. Celanese, on cross appeal, contends that the judge committed an abuse of discretion by not awarding the full amount of defense costs that Celanese requested. We vacate so much of the judgment that held OneBeacon liable for Celanese's defense costs for the period of time at issue, and therefore do not reach the issues raised in Celanese's cross appeal.

         Background.

         The following undisputed facts are taken from the summary judgment record. See Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120 (1991) ("The standard of review of a grant of summary judgment is whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to a judgment as a matter of law").

         Over the years, Celanese has been subject to numerous legal actions involving claims of bodily injury from asbestos and chemicals allegedly contained in Celanese's products or facilities. In an effort to seek coverage under its insurance policies in April, 2009, Celanese sent a letter to OneBeacon stating that it was terminating the parties' then-existing defense cost-sharing agreements[2] and demanding that OneBeacon instead defend the ongoing asbestos and chemical product injury claims under its original general liability policies.[3] OneBeacon's general policies provided:

"DEFENSE, SETTLEMENT, SUPPLEMENTARY PAYMENTS. As respects the insurance afforded by the terms of this policy [OneBeacon] shall:
"A. defend any suit against [Celanese] alleging bodily injury or property damage, even if such suit is groundless, false or fraudulent; but [OneBeacon] may make such investigation, negotiation and settlement of any claim or suit as it deems expedient;
"B. pay in addition to the applicable policy limits of liability:
"(1) all expenses incurred by [OneBeacon]."[4]

         In response to Celanese's letter, OneBeacon agreed to defend Celanese against the underlying asbestos and chemical product injury claims without a reservation of rights. To this effect, OneBeacon offered to waive any issues of coverage[5] and to indemnify Celanese from any settlements or judgments up to its full liability limits. However, OneBeacon also sought to assume full control of Celanese's defense of these claims.

         In response, Celanese refused to cede its control of the defense or replace the counsel it had employed for the past fourteen years with the representation selected by OneBeacon. Celanese alleged that because a "demonstrated conflict of interest" existed, it was not required to yield control of its defense.[6]

         OneBeacon replied by advising Celanese that, as Celanese's insurer, it did not consent to Celanese's retention of independent counsel and was not contractually obligated to compensate Celanese for such defense costs.

         In March, 2010, OneBeacon filed an action for declaratory relief.[7] A judge entered an order in May, 2011, [8] ruling on the parties' cross motions for summary judgment, and declaring that OneBeacon had the right to control the defense of Celanese's underlying claims as a result of its offer to defend without a reservation of rights.[9] The parties then filed further cross motions for summary judgment on the issues underlying this appeal, particularly whether OneBeacon was liable to Celanese for the defense costs Celanese incurred during the period of April 13, 2009, (when Celanese elected to revert to defense under OneBeacon's general policies) through May 27, 2011 (when the judge ruled that OneBeacon had the right to control Celanese's defense.[10] On the further cross motions, the judge ruled that OneBeacon was liable for reasonable and necessary defense costs incurred by Celanese during this period of time as part of OneBeacon's duty to defend.[11] The judge further referred the issue of the amount of reasonable and necessary legal fees to a special master, and ultimately awarded Celanese $2, 435, 921.49 in attorney's fees, plus prejudgment interest from May 27, 2011, to May 31, 2013.[12]

         Discussion.

         Whether OneBeacon is liable for the defense costs incurred by Celanese is dependent on our answer to four questions: (1) Does OneBeacon have the right to control Celanese's defense if OneBeacon has offered to defend without a reservation of rights? (2) Does Celanese have the right to refuse OneBeacon's control of the defense if a sufficient conflict of interest exists? (3) Does a sufficient conflict of interest ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.