Document zbkQzbE9EB63LwGnOBELB9gxa

PLAINTIFF'S EXHIBIT Asbestos ruling ConCuutvd self in suits brought by the Chicago Public Vfrofhlf and two suburban Chicago school districts, as well as a national class-action suit pend ing in Philadelphia, Ur. Mielke said. The Insurers have until June 10 to petition for a rehearing, said Robert Kiesler of Kiesler it Ber man in Chicago, USFitG's attorney and the lead insurer attorney in the case. The insurers have not decided whether they will file for retrial or abide by the ruling and pay Wil kin's legal expenses, be said. `The Supreme Court ruling is a total affirmation of the appeals court ruling and is the most com prehensive ruling to date on the defense issue," said Mr. Neal, Wil kin's co-counsel. 'The court ruled against the in surers on all issues of their tppeal. It is clear that they have a duty to defend,'* he said. "The court rejected all of the de fenses that insurers have been try ing to use. That's why this case is so important," agreed Covington it Burling's Mr. Skinner. "This is a good decision for building owners because it estab lishes the property damage issue, and it's also good for asbestos manufacturers and installers be cause it establishes the duty to de fend issue," observed Marilyn Kueper, assistant chief of asbestos litigation for the QUnoii attorney general's office, which filed a brief in the case in support of Wilkin. Tom Freeman of Brobeck, Phlegm* it Harrison in San Fran cisco. which represented asbestos manufacturers in the coordinated asbestos litigation in California in 1988 <B/, Sept. 12, 1988), believes that insurers' "first line of de fense" in asbestos property dam age coverage disputes--that as bestos does not constitute property damage--is crumbling. "Nearly every court to date has ruled that asbestos in buildings constitutes property damage for the purpose of insurance. Now, there is a supportive state supreme court ruling, too," Mr. Freeman explained. But Mr. Freeman stopped short of saying the Illinois decision will influence courts nationwide pre siding over similar cases. "We all believed the California case was comprehensive enough to resolve everything. But you still have the hard-liners challenging the coverage issue. So, I'm a little skeptical about predicting that the Illinois case will affect anything but Wilkin Insulation." Mr. Kiesler. USF&C't attorney, said that because this decision was returned by Illinois' highest court, "other courts will look to it for guidance." But, Mr. Kiesler said the court overlooked key elements to USF&G's case. "Our whole caaecenlereo arouno whether asbestos fibers released into a building damages property. Asbestos fibers, although harmful to human beings, are not destruc tive to tangible property. "If the fibers shorted out a motor, that's property damage. But all we have here is perceived bodily injury. As s matter of law and contract, we feel the court erred in its ruling" Mr. Kiesler said. David Cv McLauchian, an attor ney with Lord, Bisaei it Brook in Chicago, which represents Lloyd's of London underwriters in asbestos cases, also called the decision "an important statement on the duty to defend." But he predicted that the case will have limited impact on other asbestos litigation because it in volved an asbestos installer, which be labeled an "aberrational in sured," rather than an asbestos manufacturer. Mr. McLauchian also said he was "surprised'' that "the decision says insurers have a duty to defend but doesn't say which insurers." It would be "unfair" to interpret the opinion to mean all of Wilkin's in surers have a duty to defend if an insurer can show its policy would not have to respond to any court awards in the underlying iitigation,she said. However, Mr. Neal, Wilkin's at torney, said he believes all of the insurers are "jointly and severally on the book for defense costs." Mr. McLauchian also pointed out that the decision docs not reach the "critical" Issue of whether insured owe a duty to indemnify policy holders for the costs of removing asbestos from buildings. This "de values the opinion and its prece dent value," Mr. McLauchian said. "It is not a comprehensive deci- Jerry S. Sallee of Dinsmore dr Shohl in Cincinnati, which repre sents Liberty Mutual Insurance Co. in asbestos-related cases, agreed. The high court "only said a car rier has the duty to. defend if po tential liability exists. That's the broadest reading a policyholder can draw from this," Mr. Sallee poloted out The case also may have limited influence outside of Illinois be cause it was not based on facts de veloped in a lengthy trial but rather on a stipulated record, Mr. McLauchian observed. Mr. Sallee also questioned the method the court used to make its judgment. "This decision is set apart from the others, especially the recent U.S. Gypsum case, because no rec ords were used. This was a simple granting of summary judgment. There was no extensive discovery nor were there near the number of depositions and documents taken. I don't think the court aired out the underlying cases well enough," Mr. Sallee said. Z*l I SOLO IS The Alchemy OfAsbestos flTtrjfiVlfl IS i HHTTMwml f KhmKUp th*T> gnM; A but tha cur-- it carried wns ivm mere benefill, nod it oocthro-- to be hardty Is-- potent aa a Mimuins to greed. Asheatoa has been ~rjt*n+A from the market ee a public maneco fora decode; but it three posthumously in the damage suite pending for the 33,000 claimant victimswbo are onlythe find wave ofa total that may grow to 300,000. Diaeaaca trawhlp to aebeetoe cam after all, Ha latent fbr 40 yean. Tbeae lawsuits have been afflicted by one more plague of the disasters that are a continuing thread in the history of aatatoa. Damage suits lea the MamriDe Corp. to file tor bankruptcy in 1982; and, as a condition of Ha release, the Manville Trust was set up to meet aU daime aatttod, pend ing end to come Tim Trust's original assets were |887 and 80 percent of the stock in the re* imbi--i company. Byl980, the ManviDa Trust had vent all its cash, and ways must be found to start payments again Inst week US. Judge Jack B. Weinstein arrived at a formula that came as dose to hie high standards of equity as rircumstancm permitted, which is to say well below their norm. The sad story Weinstein' opinion had to taO was another reminder that, when ever ash--toe is the ease, the rapacity of putatively respectable American tnetitntions ends up in the ar raignment dfvk with it. fha Manville Trust's ruin is a chronicle ofsack and pillage accompliehad with the fnlarenrs of court-ap* proved trustees who kept their eyes open only when awairJiiwg out their own oomforts. Their office rent wee 91 e year. They spent 960 million on out side and 925 million on insidei --lariad 100 employs--, and took out a lavish insurance policy to protect themaalv-- from suits far nonf--nos, a peril that, on their record, can scarcely be dismissed as a U--iiwtiih. word that the trust fund was about to its reserves was leaked to what Weinstein d--rrihes as a Maalact** group of lawy--a. The result," tha court not--, "was a freniisd of fensive fay plaintiffs bar to di^mae of dans by the hundreds and **"*--^ * time and collect ft-- before the Trust went broke." It had become, in Weinstein's weeds, "hugely prof itable" for lawyers to assemble "huge etahl-- of daime" earn "hundreds of ofdollars in tom." That waa the boom, and, aa umal in aabaataa history, distinctly more notio--Me to plinstifb' coun sel than to plaintiff Settlements averaged 942,000 a daim; and, by Weinstein's best animate, the actual victim got 30 cents out of every dollar paid out in his name. Then came the bust; and tha ftsnd was barely a year old when its trusts-- began talking about a 25- year wait between a --ttlamant and the day of it* There was no remedy but fir the courts to in trude eon-- measures of dieripltiiQ The Trust wfll henceforth limit He operating eapana-- to 96.6 m3lioo a --There will be a 25 percent can on sehrea, "cogent health" riatmanta -- La, survival dubious beyond six months -- are guaranteed 40. percent of their settlement within 20 days. As to' those Is-- exigent, "claimants who filed in 1982 will receive 40 percent of their payment in 1991 and ... the remaining 60 pouent in 1996." To haws filed in 1968 means to be paid 40 p--oant in 2007 and 60 percent in 2012. The over-impatient have the option of 92,000 in cash now end forever holding tbeir psora fleftla--nfs will be kept near a 926.000 lim it That was the beat Jack Weinstein could da