Document X7NjO03jY31nyb77z0wwEkrXJ

WJffi 003^21 0626113 GRACE Mr. Horace Paasananti Marsh & McLennan Incorporated 1221 Avenue of the Americas New York, N.Y. 10020 W R. Gnea & Co. Groc* Plaza 1114 Axanm of Amr<aj Now \brfc. NY 10036 September 10, 1984 IS PLAINTIFF'S Ij . EXHIBIT || WRG-779 Res School District Litigation Dear Horace: This is intended to serve as an update of the negotiations that are continuing in the School District litigation. Dan Speights of the law firm of Blatt t Poles represents various school districts and his cases can be categorized as follows; those filed and excluded from the class action injunction from prosecution and those that are unfiled. The plaintiffs in the class action are being repre sented by David Berger and Herbert Newburg who have been designated co-lead counsel. The defendants at this time are attempting to negotiate with Speights and Berger separately as Speights will not allow his filed cases to be included in any class action settlement. It is hoped that a settlement with Speights would encourage resolution of the class action. All negotiations are confidential, however, please advise our carriers that we will submit to them any proposal for settlement at the appropriate time. I wish to reiterate that we recognize the insurer's right to participate in these negotiations and invite them to do so. Please call me should you have any questions. Yours very truly, W. R. GRACE & CO. JMPstg cc: Mr. S. A. Ahern Mr. F. Codey III Mr. T. Clarke Mr. W. Delaney Mr. 0. M. Favorito Mr. R. Leach HLB, HMB, BRH, CFK Jeffrey M. Posner Mr. F. Naaella Mr. G. Olcott Mr. K. O'Reilly S Mr. S. Remis Mr. R. S. Strange Mr. R. Walsh 002787 ot. o*ki oop 1U0 CA^TIMOM. MAPTkMO >tan Nbruary IS. 1983 /MARYLAND AN AUCHCAN GENERAL COMtoNY 0626146 nUPMOMt (3011SM-1OQO tutx. t-TM* MOUI CO OM. Hr. Horry L. Bauer, Claims Manager M. 1C Croc* i Company Crm Flaaa 1114 Avenue of the Americas vr^# m ioo36 to: W. A. Croc* Environmental Litigotion Door Horry: 2 acknowledge roeoipt of and thank you for your lottor of February 7 concerning tho Collins case, which natter brought to our attention certain actions by Grace which we believe represent serious departures fren the Conditions recited in your insurance contracts with Maryland Casualty and standard insurance dale procedure. Hr. Kappus and eyesIf had the opportunity to meet with you and Messrs. Tavorito and Ahem frosi your Construction Products Division on January 28 to diseuss the Collins utters in particular and claia handling procedure for these utters in general. Our strong objection concerning the Collins ease concerns the negotiation over sou weeks/ ninths of a structured settlement by defense counsel appointed by Grace, with Grace's knowledge, but without the prior authorisation of Maryland Casualty and without any notification to us until January 17, by which time the settlement terms were finalised (you have defense counsel Harris' report of January 17). You and Z were able to reach a mutually acceptable compromise concerning our claia of breach of condition in Collins, which included certain understandings regarding handling procedure for future claims, and the sharing of a mutually agreeable settlement as is accurately set forth in your letter to me of February 7. More isportant than this single case, the January 28 meeting gave us the opportunity to express clearly our position concerning appropriate claia handling procedure in accord with the contract, procedure with which you were in basic agreement at Ithe meeting and which we discussed in additional detail on the 14th. v. ft. Grace's last liability policy with Maryland was illtotllOSl covering the period June 30, 1970 - June 30, 1973. On page 3L, that policy outlines the language with which we are both familiar,- regarding covered damage caused by an occurrence arising out of the insured's operations, by Indicating athe company (Maryland Casualty) shall have the rloht and duty to defend any suit against the insured...and nay make such investigation and settlement of any claim or suit as it deems expedient (emphasis added)*. The Conditions of the policy are 002788 Mr. Harry L. Sauer February 15. 1983 P*9 2 0626147 found on pages 11*15. Page 12, section 4 outlines the "Insured's Duties in the Event of an Occurrence, Claim or Suit". Included amonq these duties are written notice of claim or suit and forwarding of suit as soon as practicable and the cooperation outlined in elause 4 '(c), which reads in pertinent part: "the insured shall coojicrate with the company and u|>on the company's request, assist in making settlements, in the conduct of suits...the insured shall not, except at his own cost, voluntarily make any payment, assume any obligation or incur any expense other than for such immediate medical and surgical relief to others at the time of the accident". In consideration of these and other relevant provisions of your policies, we have requested that the following procedures be adhered to: 1. Upon receipt of notice of claim or suit by Grace, or any of its subsidiaries or divisions, which in Grace's opinion may involve any coverage which may have been afforded by Maryland Casualty, such suit or notice of claim should be fprwarded promptly to D. N. Kappus, Claims Counsel at Maryland Casualty's Hone Office and to QU and any other insurer whose coverage is felt by Grace to be applicable. Such notice should not be mailed to any branch office of Maryland Casualty unless otherawise requested. 2. Should CNA and Maryland Casualty agree that the duty to defend Grace is present based uion the facts of the i^irticular claim, it will be the responsibility of CNA and Maryland casualty (and any otiter applicable insurance carrier) to presqttly assign the natter for defense to mutually acceptable counsel of their choice, eaeh making *such reservations or policy defenses as may apply. M. R. Craoe should not make assignment of any suit for which its insurer(s) acknowledge responsibility for defense. 3. Assigned defense counsel will be advised to correspond directly with Maryland Casualty's Homs Office Environmental Claim Department and the appropriate representative of any other applicable insurer with a carbon copy to the local Maryland Casualty Claim Representative indicated, along with a copy to M. R. Grace, should they so desire. Not only do we have no objection to Grace receiving copies of defense counsel's correspondence, it would appear especially appropriate where any portion of the claim may be uninsured or the responsibility of Grace, or subject to exclusions or policy defenses. - 4. In keeping with the cooperation provisions outlined in part on page 12, section 4 (C), we solicit and appreciate Grace's cooperation and teehnieal product expertise in providing such reasonable assistance as may be requested by the insurers, or by defense counsel at the request of the Insurers. This would certainly include, but not be limited to, assistance in the furnishing of product identification information, records of sales or supplies. 002789 Hr. Marry l~ Sauer February IS, 1983 P9* 3 its composition and such information from in-house technical personnel as stay be requested and appropriate. Grace should refrain, however, from staking any undertaking or granting authorisation to defense counsel or others concerning the hiring of experts, consultants or any personnel outside of the Grace organisation. 5. It is the responsibility of the insurance carriers to reasonably direct the progress of the clain or suit and coordinate the activities of defense counsel to assure an appropriate defense. Should Grace refer any clain or suit to Maryland Casualty (and/or its other insurers) it should refrain from directing the activities of defense counsel. Should Maryland Casualty's coverage be applicable or potentially applicable to the responsibility for settlement, judgment or any other fora of loss payment, Grace shall specifically refrain from becoming involved in any manner in the initiation of settlement negotiations, the negotiations themselves, settlement authorisation or any activity which may be construed by counsel as the authorisation to make a disposition of a case for which insurance coverage is or potentially may be applicable. 6. Maryland Casualty recognises that environmental litigation may involve considerations which are iaportant to M. It. Grace aside from the particular issues of a specific litigation matter. Grace is in all cases invited to communicate with Maryland Casualty and its other insurers in order that any such concerns may be given full consideration, consistent with the provisions of the Insurance contracts. Harry, the above is not intended to represent an all-inclusive list, but does represent the basic areas in which it was agreed that specific understanding was necessary. They are in no way Intended to modify the insurance contracts in my respect; they are intended to avoid any future misunderstandings, promote communication and help all of us work better together within the specific roles dictated by the Insurance contracts. You and Z have discussed these areas on several occasions within the last several weeks and Z believe that we are in basic agreement on the above. Certainly additional communication with OlA will be necessary. Z respectfully ask that you cesmunicate the substance of this letter to my Grace employee who may become involved in cooperating in the defense of these claiam where insurance coverage may be applicable. Zmstly, and in consideration of the mutual agreements comprisine our comprosd.se of the Collins case, Z would appreciate your written confirmation that these general guidelines md procedures are acceptable to Grace. You and Z also diseussed briefly the necessity that Graee complete its documentation of products liability coverages with Maryland Casualty for the earlier years which our internal records do net readily produce 002790 Hr. Marry L. Sauer Pabruary IS. 1SS3 Pat 4 0624149 confirmation. Z look forward to your response and appreciate your generous "Cooperation in this important area. very truly yours. John 0. Cole. Director environmental Claims cci D. M. Kappus, Esq. JDC/djr 002791