Campbell v. Metropolitan Property & Casualty Insurance

239 F.3d 179, 2001 WL 91722
Court of Appeals for the Second Circuit·Decided February 2, 2001·No. No. 00-7511·Published·Cited by 1 cases

Opinion

KEARSE, Circuit Judge:

Defendants Metropolitan Property and Casualty Insurance Company et al. (collectively “Metropolitan”) appeal from a judgment entered in the United States District Court for the Southern District of New York following a bench trial before Naomi Reice Buchwald, Judge, awarding plaintiffs Faith Campbell (“Campbell”) and her children Jazmín, Alteasha, and Clarence (collectively the “children” or “Campbell children”) $300,000 on a policy of insurance covering bodily injury, plus prejudgment interest. The district court found that the Campbell children suffered injuries from exposure to lead paint during the policy period September 5, 1992, to September 5, 1993. On appeal, Metropolitan conténds that the district court'erred (1) in admitting expert testimony proffered by plaintiffs as to the time of onset of the children’s injuries, and (2) in awarding prejudgment interest. For the reasons that follow, we affirm the district court’s finding of liability and reverse the award of prejudgment interest.

I. BACKGROUND

Most of the facts have been stipulated by the parties. The dispute centers on the timing of injuries suffered by the Campbell children.

A. The Insurance Policies and the Campbells’ Apartment

From January 1993 to March 22, 1995, Campbell and her children lived in a Bronx, New York apartment in a building owned by Kormal and Tajwattie Singh (collectively “Singh”). In January 1994, the children were tested for lead poisoning and were found to have lead levels in their blood ranging from 18 to 22 micrograms of lead per deciliter of blood. Later blood tests showed that the children’s blood lead levels had risen and ranged from 29 to 44 micrograms per deciliter. Under the New York City Health Code, “a blood lead level of 10 micrograms per deciliter or higher” is classified as “lead poisoning.” N.Y.C. Health Code, Tit. 24, § 11.03. See also Centers for Disease Control, Preventing Lead Poisoning in Children 1-2 (October 1991). (“Epidemiologic studies have identified harmful effects of lead in children at blood lead levels as low as 10 mb/del.”). [181] Campbell brought an action against Singh in state court, alleging that her apartment contained cracked, chipped, and peeling lead-based paint, and that exposure to it had caused the children injuries, including brain damage, attention deficit disorder, developmental delay, decreases in IQ, and lead intoxication.

With respect to the period in which the Campbells lived in that apartment, Metropolitan issued liability insurance policies covering Singh’s building for the periods September 5, 1992, to September 5, 1993 (“first policy period” or “Period One”), September 5, 1993, to September 5, 1994 (“second policy period” or “Period Two”), and September 5, 1994, to September 5, 1995 (“third policy period” or “Period Three”). In the policies, Metropolitan agreed to “pay all sums for bodily injury and property damage to others for which the law holds [Singh] responsible because of any occurrence. This includes prejudgment interest awarded against [Singh].” (Emphasis omitted.) The policies defined “occurrence” to include “continuous or repeated exposure to substantially the same general harmful conditions, resulting in bodily injury ... during the term of the policy” (emphasis omitted); “bodily injury” was defined to mean “any bodily harm, sickness or disease.” Each policy provided a maximum of $300,000 in coverage.

Campbell’s action against Singh was settled pursuant to a stipulation dated April 20, 1998 (the “Stipulation”), entered into by Campbell, Singh, and Metropolitan. The Stipulation recited, inter alia, that during each of the three policy periods the Campbell children “were exposed to lead based paint” (Stipulation ¶ 7), and Metropolitan agreed to pay Campbell the full policy liability limit of $300,000 for the second policy period, ie., September 5, 1993, to September 5, 1994. The parties agreed that the state-court action against Singh would be discontinued, that Campbell would bring a declaratory judgment action against Metropolitan with respect to the first and third policy periods, and that Metropolitan would pay plaintiffs the maximum policy amount for any period within which the court finally determined, after all appeals were concluded, that bodily injury had occurred.

B. The Present Action

Following the execution of the Stipulation, Campbell commenced the present diversity action, seeking a declaratory judgment that Metropolitan was liable for coverage of injuries to plaintiffs in Periods One and Three. Metropolitan eventually conceded liability with respect to Period Three and agreed to pay the full $300,000 limit of that policy. Accordingly, the only issue for trial was whether the Campbell children had suffered bodily injury during the first policy period, ie., September 5, 1992, to September 5, 1993. In light of the stipulated facts, the district court noted that the issue to be decided was quite narrow:

Because of the stipulation between the parties, the only issue presented was whether the plaintiffs sustained a bodily injury during the [first] policy period. It was not necessary for the plaintiffs to establish permanent injury or to adduce evidence of the magnitude of the injury sustained. Furthermore, as a matter of law, injury is not commensurate with external manifestation. Thus, it was not necessary for infant plaintiffs to have exhibited external symptoms of lead poisoning ... so long as plaintiffs established that they sustained a bodily injury.

Opinion and Order dated March 20, 2000 (“Posttrial Opinion”), at 6-7 (footnote omitted). Notwithstanding the stipulation that during each of the three policy periods the children “were exposed to lead based paint” (Stipulation ¶ 7), Metropolitan argued that there was no injury during the first policy period because plaintiffs could not show that the children “ ‘sustained an adverse effect on the bone marrow where the red blood cell is formed (heme biosyn-thesis) or any other cellular or subcellular [182] injury during the first policy period.’ ” Posttrial Opinion at 8 (quoting Metropolitan’s Proposed Conclusions of Law ¶3).

At trial, plaintiffs introduced, inter alia, New York City Department of Health (“Health Department”) records showing that on February 15, 1994, and July 28, 1994, the Campbells’ apartment had contained lead-based paint in numerous locations. The lead level was so high as to constitute a nuisance, and the Health Department had ordered its abatement.

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Campbell v. Metropolitan Property & Casualty Insurance, 239 F.3d 179, 2001 WL 91722 (2d Cir. 2001).

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