Plastics Engineering Co. v. Liberty Mutual Insurance

2009 WI 13, 759 N.W.2d 613, 315 Wis. 2d 556, 2009 Wisc. LEXIS 9

• Court: Wisconsin Supreme Court
• Decided: January 29, 2009
• Docket: 2008AP333-CQ
• Status: Published

Opinions

ANNETTE KINGSLAND ZIEGLER, J.

¶ 1. This is a certification of questions of law from the United States Court of Appeals for the Seventh Circuit, pursuant to Wis. Stat. § 821.01 (2005-06).¹ The questions certified for determination are: "(1) what constitutes an 'occurrence' in an insurance contract when exposure injuries are sustained by numerous individuals, at varying geographical locations, over many years; (2) whether Wisconsin Statute § 631.43(1) applies to successive insurance policies; and (3) whether Wisconsin courts would adopt an 'all sums' or pro rata allocation approach to determining liability when an injury spans multiple, successive insurance policies."

¶ 2. At the outset, we recognize that a certification usually, and appropriately so, contains questions of law that cannot be answered by controlling precedent from the Wisconsin Supreme Court or Court of Appeals. See Wis. Stat. § 821.01. In a certification, this court does not traditionally decide the issues as if we were reviewing the decision of the magistrate judge. The parties, however, did not brief or argue this case in response to the certified questions. Rather, they briefed and argued this case as if we were called upon to affirm or reverse Judge Goodstein's decision.²

¶ 3. The certification noted that "[h]ow these [policy] provisions are interpreted in the context of long-tailed exposure claims under Wisconsin law will significantly shape the future of insurance litigation in the state." Here we analyze the certified questions by turning to the specific policy language, which apparently is standard language found in other insurance contracts governed by Wisconsin law.³ Wisconsin case law has not interpreted such a policy in light of these facts. Consequently, we answer these questions in a manner that could prove useful beyond the case now before the court.

¶ 4. We answer the three certified questions by concluding that under the language in this policy and the facts of this case, each claimant's repeated exposure is one occurrence; Wis. Stat. § 631.43(1) (1975-cur-rent)⁴ does not apply to successive insurance policies; and once this policy is triggered, Liberty Mutual must fully defend the lawsuit in its entirety and pay for all sums up to the policy limits that Plastics Engineering Company (Plenco) is obligated to pay because of the injury. The policy language here does not support a pro rata allocation of damages.

I. FACTS

¶ 5. Prior to filing motions for summary judgment at the United States District Court for the Eastern District of Wisconsin, the parties stipulated to the following facts:

¶ 6. From approximately 1950 until 1983, Plenco manufactured and sold certain compounds that incorporated asbestos. Plenco has now been named a defendant in a number of lawsuits because of bodily injury or wrongful death that are allegedly related to or have arisen from exposure to asbestos-containing products sold by Plenco. In general, the claimants allege that they were injured by their first exposure to asbestos, but their asbestos-related injuries did not manifest until long after their exposure to the asbestos. The claimants' exposures allegedly occurred at different times and at different geographical locations.

¶ 7. During periods of the alleged exposure and resulting injury, Liberty Mutual provided various insurance policies to Plenco. The policies relevant to this litigation are the primary policies from February 9, 1968, through January 1,1989, and the umbrella excess coverage policies from May 8,1970, through January 1, 1984, and January 1,1986, through January 1,1988. In each of these years, Liberty Mutual was the insurer who issued the primary and excess policies.⁵ Primary policies beginning January 1, 1989, and excess policies beginning January 1, 1988, contain an asbestos exclusion.

¶ 8. The policies at issue contained the following coverage limits: From February 9, 1968, through January 1, 1986, Liberty Mutual insured Plenco under a primary policy with coverage limits of $500,000 per occurrence and $500,000 annual aggregate. From January 1, 1986, through January 1, 1989, Liberty Mutual insured Plenco under a primary policy with coverage limits of $1,000,000 per occurrence and $1,000,000 annual aggregate.

¶ 9. From May 8, 1970, through January 1, 1984, Liberty Mutual also insured Plenco under umbrella excess liability policies. From May 8, 1970, through December 19, 1972, the coverage limits under each excess policy were $1,000,000 per occurrence and $1,000,000 annual aggregate. From December 19,1972, through January 1, 1982, the coverage limits under each excess policy were $5,000,000 per occurrence and $5,000,000 annual aggregate. From January 1, 1982, through January 1, 1984, the coverage limits under each excess policy were $1,000,000 per occurrence and $1,000,000 annual aggregate. From January 1, 1984, through January 1, 1986, Liberty Mutual did not provide Plenco with umbrella excess liability coverage. From January 1, 1986, through January 1, 1988, the coverage limits for each policy were $10,000,000 per occurrence and annual aggregate.

¶ 10. The primary policies issued by Liberty Mutual to Plenco from January 1, 1967, through January 1, 1989, contained the following or similar insuring clause:

The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of

Coverage A. bodily injury or

Coverage B. property damage

to which this policy applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent, and may make such investigation and settlement of any claim or suit, as it deems expedient, but the company shall not be obligated to pay any claim or judgment or to defend any suit after the applicable limit of the company's liability has been exhausted by payment of judgments or settlements.

¶ 11. The primary policies provided the following definition for "bodily injury": From January 1, 1967, through January 1, 1973, the policies defined "bodily injury" as "bodily injury, sickness or disease sustained by any person." From January 1, 1973, through January 1, 1989, the primary policies defined "bodily injury" as "bodily injury, sickness or disease sustained by any person which occurs during the policy period, including death at any time resulting therefrom."

¶ 12. The primary policies provided the following definition of "occurrence": From January 1, 1967, through January 1, 1973, the primary policies defined "occurrence" as "an accident, including injurious exposure to conditions, which results, during the policy period, in bodily injury or property damage neither expected nor intended from the standpoint of the insured." From January 1, 1973, through January 1, 1989, the primary policies defined "occurrence" using the following or similar language, "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."

¶ 13. The primary policies from January 1, 1967, through January 1, 1973, provided the following Limits of Liability provision:

Regardless of the number of (1) insureds under this policy, (2) persons or organizations who sustain bodily injury or property damage or (3) claims made or suits brought on account of bodily injury or property damage, the company's liability is limited as follows:

Coverage A — The limit of bodily injury liability stated in the declarations as applicable to "each person" is the limit of the company's liability for all 'damages because of bodily injury sustained by one person as the result of any one occurrence; but subject to the above provision respecting "each person", the total liability of the company for all damages because of bodily injury sustained by two or more persons as the result of any one occurrence shall not exceed the limit of bodily injury liability stated in the declarations as applicable to "each occurrence".

Coverages A and B — For purposes of determining the limit of the company's liability, all bodily injury and property damage arising out of continuous or repeated exposure to substantially the same general conditions shall be considered as arising out of one occurrence.

¶ 14. From January 1, 1973, through January 1, 1977, the Limits of Liability provision was substantially the same as the January 1, 1967, through January 1, 1973, provision.

¶ 15. The primary policies issued by Liberty Mutual from January 1, 1977, through January 1, 1984, contained a Combined Single Aggregate Limit of Liability Endorsement, and those policies used the following or similar language:

COMBINED SINGLE AGGREGATE LIMIT OF LIABILITY

Regardless of the number of (1) insureds, under this policy, (2) persons or organizations who sustain bodily injury or property damage or (3) claims made or suits brought on account of bodily injury or property damage, the company's liability is limited as follows:

Coverage A and B — The total liability of the company for all damages because of all bodily injury and property damage to which this policy applies shall not exceed [$1500,000.

Subject to the above provision respecting the total liability of the company for all Bodily Injury and Property Damage to which this policy applies, if an occurrence gives rise to Bodily Injury or Property Damage which occurs partly before and partly within the policy period the liability of the company under this policy for such occurrence shall not exceed $500,000 minus the total of all payments made with respect to such occurrence under a previous policy or policies of which this policy is a replacement.

For the purpose of determining the limit of the company's liability (1) all bodily injury and property damage arising out of the continuous or repeated exposure to substantially the same general conditions shall be considered as arising out of one occurrence!.]

¶ 16. The primary policies issued by Liberty Mutual to Plenco from January 1, 1984, through January 1, 1989, contained a Limits of Liability provision that differed from the above stated provisions, but neither party asserts any meaningful difference exists.

¶ 17. The excess policies issued by Liberty Mutual to Plenco from May 8, 1970, through January 1, 1984, and from January 1, 1986, to January 1, 1988, included the following or similar language:

COVERAGE — EXCESS LIABILITY

The company will pay on behalf of the insured all sums in excess of the retained limit which the insured shall become legally obligated to pay, or with the consent of the company, agrees to pay, as damages, direct or consequential, because of:

(a) personal injury, .. .

with respect to which this policy applies and caused by an occurrence.

¶ 18. The excess policies issued by Liberty Mutual to Plenco from May 8, 1970, through January 1, 1984, and from January 1, 1986, to January 1, 1988, defined "personal injury" using the following or similar language: " 'personal injury' means personal injury or bodily injury which occurs during the policy period sustained by a natural person . . . ."

¶ 19. The excess policies issued by Liberty Mutual to Plenco from May 8, 1970, through January 1, 1984, and from January 1, 1986, to January 1, 1988, defined "occurrence" using the following or similar language: " 'occurrence' means injurious exposure to conditions, which results in personal injury . . . neither expected nor intended from the standpoint of the insured."

¶ 20. The excess policies issued by Liberty Mutual to Plenco from May 8, 1970, through January 1, 1984, and from January 1, 1986, to January 1, 1988, contained a Limits of Liability provision using the following or similar language:

Regardless of the number of insureds, under this policy or the number of persons or organizations who sustain personal injury, property damage or advertising injury or damage, the company's liability is limited as follows:

Each Occurrence — The limit of liability stated in the declarations as applicable to "each occurrence" is the limit of the company's liability for all damages, direct and consequential, because of all personal injury, property damage, or advertising injury or damage sustained by one or more persons or organizations as the result of any one occurrence.

For the purpose of determining the limits of the company's liability:

(1) all personal injury and property damage arising out of continuous or repeated exposure to substantially the same general conditions . . .

shall be considered as the result of one and the same occurrence.

¶ 21. The excess policies issued by Liberty Mutual to Plenco from May 8, 1970, through January 1, 1984, and from January 1, 1986, to January 1, 1988, included the following or similar language:

Non-Cumulation of Liability-Same Occurrence-If the same occurrence gives rise to personal injury, property damage or advertising injury or damage which occurs partly before and partly within any annual period of this policy, the each occurrence limit and the applicable aggregate limit or limits of this policy shall be reduced by the amount of each payment made by the company with respect to such occurrence, either under a previous policy or policies of which this is a replacement, or under this policy with respect to previous annual periods thereof.

¶ 22. Liberty Mutual has been paying all of Plenco's defense costs, settlements and judgments, and Liberty Mutual advised Plenco that through December 15, 2005, Liberty Mutual has paid approximately $14.3 million in asbestos claims on Plenco's behalf. Liberty Mutual defended Plenco and paid settlements and judgments under a reservation of rights as set forth in correspondence sent to Plenco on or about January 6, 2004, (incorrectly dated January 6, 2003) and June 15, 2004.

II. PROCEDURAL HISTORY

¶ 23. On September 1, 2004, Plenco filed a complaint against Liberty Mutual seeking declaratory judgment regarding Liberty Mutual's obligation to defend and indemnify Plenco for lawsuits that arose out of the claimants' alleged exposure to Plenco's asbestos-containing products. Liberty Mutual sought declaratory judgment absolving it from the responsibility to pay certain defense and indemnification expenses. On December 15, 2005, the parties stipulated to the pertinent facts regarding their respective summary judgment motions.

¶ 24. On October 27, 2006, the United States District Court for the Eastern District of Wisconsin, Aaron E. Goodstein, United States Magistrate Judge, issued a written decision and order.⁶ The district court granted in part and denied in part each party's motion for summary judgment. The district court issued a final declaratory judgment on December 6, 2006, and, in part, concluded the following:

¶ 25. First, each person's injury resulting from exposure to asbestos-containing products constitutes a separate occurrence under Liberty Mutual's policies issued to Plenco. Second, the non-cumulation provisions limit an individual claimant's recovery. Third, Liberty Mutual is obligated to pay all sums arising from an occurrence and is not entitled to a pro rata contribution from Plenco.

¶ 26. Liberty Mutual appealed the district court's first and third conclusions, and Plenco appealed the district court's second conclusion. The United States Court of Appeals for the Seventh Circuit reasoned that the three conclusions present important questions of unresolved Wisconsin law. The court of appeals stated, "[bjecause current Wisconsin law does not provide sufficient guidance as to how the Wisconsin Supreme Court would resolve these issues, we stay this appeal and certify three questions to the Wisconsin Supreme Court, pursuant to Circuit Rule 52 and Wisconsin Statute § 821.01." This court accepted the certification.

III. STANDARD OF REVIEW

¶ 27. The interpretation of an insurance contract is a question of law, which this court reviews de novo. Danbeck v. Am. Family Mut. Ins. Co., 2001 WT 91, ¶ 10, 245 Wis. 2d 186, 629 N.W.2d 150. An insurance policy is to be construed so as to give effect to the parties' intentions. Id. The contract's words are to be given their common and ordinary meaning, and when the policy language is plain and unambiguous, we enforce the contract as written and without resorting to the rules of construction or principles from the case law. Id. If the contract language is ambiguous, i.e., if it is susceptible to more than one reasonable interpretation, the language is construed in favor of coverage. Id.

IV ANALYSIS

¶ 28. As stated above, this case presents three questions for review. We conclude that under the language in this policy and the facts of this case, each claimant's repeated exposure is one occurrence; Wis. Stat. § 631.43(1) does not apply to successive insurance policies; and once this policy is triggered, Liberty Mutual must fully defend the lawsuit in its entirety and pay for all sums up to the policy limits that Plenco is obligated to pay because of the injury. The policy language here does not support a pro rata allocation of damages.

A. Occurrence

¶ 29. First, under this policy and the facts of this case, we must determine what constitutes an occurrence and how many occurrences have taken place. Liberty Mutual argues that Plenco's manufacture and sale of asbestos-containing products without warning constitutes one occurrence regardless of the number of people injured. Plenco, on the other hand, argues that each individual's exposure to asbestos, which results in injury, constitutes a single occurrence. Under Plenco's argument, several occurrences have taken place because many people have been exposed over the span of many years. Given the policy language, we agree with Plenco and conclude that each individual's repeated exposure constitutes an occurrence.

¶ 30. At the outset we recognize that the determination of what constitutes an occurrence in asbestos-related claims has produced varying results throughout the country. See London Mkt. Insurers v. Superior Court, 53 Cal. Rptr. 3d 154, 161 (Ct. App. 2007) (discussing the different approaches that courts have taken around the country). For example, some courts have concluded that it is the manufacture and sale of asbestos-containing products that constitutes the occurrence.⁷ Some courts have concluded that when exposure occurs at the same time and place, despite the fact that many individuals are injured, there is but one occurrence per time and place.⁸ Some courts have concluded that the individual claimant's repeated exposure to asbestos-containing products constitutes the occurrence.⁹ In this court's view, it is the policy language here that controls the analysis.¹⁰

1. What Constitutes an Occurrence

¶ 31. The policy here defines "occurrence" as "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."¹¹ In this case, the claimants were allegedly injured by continuous and repeated exposure to asbestos fibers from Plenco's asbestos-containing products. Without exposure, no bodily injury takes place. Our conclusion that exposure to asbestos falls within an exposure to conditions, as referenced in this policy, is the most reasonable, unstrained approach. Furthermore, even if we were to conclude that there is more than one reasonable interpretation of this policy-language, the policy is still construed in favor of affording coverage to the insured. See Danbeck, 245 Wis. 2d 186, ¶ 10 (stating that "[i]f the language is ambiguous, it is construed in favor of coverage").

¶ 32. Liberty Mutual urges us to adopt the conclusion that it is the manufacture and sale of asbestos-containing products without warning that is the occurrence. When looking at the plain language of the policy and applying that policy language to the facts of this case, we are not persuaded by Liberty Mutual's argument.

¶ 33. Liberty Mutual attempts to support its argument that the manufacture and sale without warning is the occurrence by relying on the Limits of Liability provision, which is found in all of the policies with some variation. In forwarding its "sale without warning" occurrence argument, Liberty Mutual asserts that the policy contemplates a single occurrence theory. Liberty Mutual argues that the number of people injured does not dictate the number of occurrences. Liberty Mutual cites to the Limits of Liability provision, which provides, "all bodily injury and property damage arising out of continuous or repeated exposure to substantially the same general conditions shall be considered as arising out of one occurrence."

¶ 34. We disagree with Liberty Mutual's application of the Limits of Liability provision. The Limits of Liability provision in this case functions to limit an individual claimant's repeated and continuous exposure to asbestos-containing products as being just one occurrence. In other words, this provision precludes a claimant from asserting that each time he or she was exposed to an asbestos-containing product, a new occurrence arose.

2. Number of Occurrences

¶ 35. When called upon to determine the number of occurrences, we conclude that when we apply the policy language to the facts of this case, each individual's repeated and continuous exposure constitutes an occurrence. Wisconsin has adopted the "cause theory" to determine how many occurrences have taken place. Olsen v. Moore, 56 Wis. 2d 340, 348-51, 202 N.W.2d 236 (1972); see also Nicor, Inc. v. Associated Elec. & Gas Ins. Servs. Ltd., 860 N.E.2d 280, 287 (Ill. 2006) (stating that "the terms of the insurance policy are not always sufficient, standing alone, to permit a definitive determination as to whether a particular case involves one occurrence or many," and as a result, "American courts have developed two basic approaches for assessing the number of occurrences that took place within the meaning of policies" — the cause theory and the effect theory).

¶ 36. Under the cause theory, "where a single, uninterrupted cause results in all of the injuries and damage, there is but one 'accident' or 'occurrence.'" Welter v. Singer, 126 Wis. 2d 242, 250, 376 N.W.2d 84 (Ct. App. 1985). "If the cause is interrupted or replaced by another cause, the chain of causation is broken and there has been more than one accident or occurrence." Id. (citing Olsen, 56 Wis. 2d at 349). Welter, therefore, lends further support for the conclusion that a separate occurrence is not found each time the same claimant is exposed to Plenco's product.

¶ 37. In Welter, Bruce Welter was riding his bicycle when he was struck by a car. Welter, 126 Wis. 2d at 246. The driver initially stopped but then drove forward to move out of the intersection, which led to Welter being dragged beneath the car. Id. After initially stopping, the driver moved the car forward a second time and then got out of the car to let someone else behind the wheel. Id. This second driver tried to free Welter by backing up about ten feet. Id. Welter brought suit alleging four separate causes of action with each cause of action corresponding to the three times the first driver put the car in motion and the one time the second driver put the car in motion. Id.

¶ 38. The court of appeals concluded that under the cause theory, only one occurrence took place because the cause and result were "so simultaneous or so closely linked in time and space as to be considered by the average person as one event," and therefore, only a single occurrence had taken place. Id. at 251. The court of appeals, relying on Appalachian Insurance Co. v. Liberty Mutual Insurance Co., also stated:

The general rule is that an occurrence is determined by the cause or causes of the resulting injury.. ..

The fact that there were multiple injuries and that they were of different magnitudes and that injuries extended over a period of time does not alter our conclusion that there was a single occurrence. As long as the injuries stem from one proximate cause there is a single occurrence.

Id. at 250-51 (citing Appalachian Ins. Co. v. Liberty Mut. Ins. Co., 676 F.2d 56, 61 (3d Cir. 1982)).

¶ 39. In the case at hand, each individual claimant's injuries stem from the continued and repeated exposure to asbestos-containing products. Thus, under the policy language and the cause theory, each claimant's repeated exposure is one occurrence.

¶ 40. Liberty Mutual argues that the number of occurrences is not dictated by the numerous individuals who sustained injuries at varying geographical locations over many years. In addition, it argues that inserting an identity-of-location requirement would rewrite the policies. We, however, inject no such "requirement." The occurrence in this case is the repeated exposure to asbestos-containing products because the policy states that an occurrence is the "continuous or repeated exposure" to conditions. Multiple occurrences arise because each individual's injury stems from his or her repeated exposure to asbestos-containing products.

¶ 41. Liberty Mutual also argues that it is inconsistent with Society Insurance v. Town of Franklin, 2000 WI App 35, 233 Wis. 2d 207, 607 N.W.2d 342, to conclude that more than one occurrence has taken place in the case at hand. However, the number of occurrences was not at issue in Society. Id,., ¶ 7.¹² Rather, in Society, the court of appeals was asked to decide which policies were triggered so the limits of the defendant's liability could be determined. Id., ¶¶ 7-13 (discussing and applying the continuous trigger theory to determine which policies had been triggered). Unlike today, the court in Society was not called upon to determine what constitutes an occurrence or how many occurrences had taken place. In that respect, Society does not impact our determination.

¶ 42. Lastly, Liberty Mutual argues that occurrence should be interpreted from the standpoint of the insured, and as a result, it is the sale without warning that is the occurrence. Again, we turn to the language of the policy, which defines "occurrence" as the "continuous or repeated exposure to conditions." The exposure must, quite obviously, be exposure to the injured person and not exposure to Plenco.

¶ 43. Accordingly, when we apply the policy language to the facts of this case, we conclude that each individual's repeated and continuous exposure constitutes an occurrence.

B. Non-cumulation provision

¶ 44. Next, we must determine whether Wis. Stat. § 631.43(1) applies to successive insurance policies. Section 631.43(1), "General," provides:

When 2 or more policies promise to indemnify an insured against the same loss, no "other insurance" provisions of the policy may reduce the aggregate protection of the insured below the lesser of the actual insured loss suffered by the insured or the total indemnification promised by the policies if there were no "other insurance" provisions. The policies may by their terms define the extent to which each is primary and each excess, but if the policies contain inconsistent terms on that point, the insurers shall be jointly and severally liable to the insured on any coverage where the terms are inconsistent, each to the full amount of coverage it provided. Settlement among the insurers shall not alter any rights of the insured.

¶ 45. Plenco asserts that by adopting Wis. Stat. § 631.43 the legislature sought to prohibit insurers from attempting to reduce their coverage obligations below the aggregate limits of their policies. Plenco accordingly argues that Liberty Mutual's noncumulation provision does exactly what this statute was meant to prohibit. Liberty Mutual, on the other hand, argues that Wis. Stat. § 631.43(1) is not applicable in the case at hand because the statute applies to concurrent insurance policies. We agree with Liberty Mutual and conclude that Wis. Stat. § 631.43(1) does not apply to successive insurance policies.

¶ 46. This statute applies when two conditions are met: First, the policies must indemnify an insured

against the same loss. See Martin v. Am,. Family Mut. Ins. Co., 2002 WI 40, ¶¶ 13-15, 19, 23, 252 Wis. 2d 103, 643 N.W.2d 452 (discussing when policies promise to indemnify for the same loss and advocating a case-by-case determination).

¶ 47. Second, this statute applies to "other insurance" provisions. Section 631.43(1) refers specifically to " 'other insurance' provisions" by placing quotes around "other insurance." When the legislature created Wis. Stat. § 631.43, it included, in part, the following note in the Laws of Wisconsin:

NOTE: This section is adapted from s. 203.11,¹³ but extended to all indemnity coverage, including the indemnity coverages in disability insurance.. .. The most important objective of the law is to give the insured full protection with minimum difficulty and joint and several liability does that. The insurers may then settle accounts among themselves. They will usually be able to do so by agreement. If they cannot, a court can do so first by interpreting the terms of the policies and, where they are inconsistent, applying restitutionary principles.. ..

Section 41, ch. 375, Laws of 1975 (footnote added).

¶ 48. The accepted meaning of "other insurance" provisions does not include application to successive insurance policies. In Progressive Northern Insurance Co. v. Hall, 2006 WI 13, 288 Wis. 2d 282, 709 N.W.2d 46, when dealing with concurrent policies, we stated:

The purpose of an "other insurance" clause is to define which coverage is primary and which coverage is excess between policies. Wis. Stat. § 631.43(1); Remiszewski v. American Family Ins. Co., 2004 WI App 175, ¶ 29, 276 Wis. 2d 167, 687 N.W.2d 809 (citing §631.43(1)). " 'Other insurance' clauses govern the relationship between insurers, they do not affect the right of the insured to recover under each concurrent policy." 15 Couch on Insurance, § 219.1, at 219-8 (3d ed. 1999).

Id., ¶ 27. "Whenever there are two policies that apply to the same insured at the same time, the issue of which policy must pay first — or which is primary and which is excess — is dealt with by other insurance clauses." Arnold E Anderson, Wisconsin Insurance Law § 11.2 (5th ed. 2004) (discussing "other insurance" clauses and referring to Wis. Stat. § 631.43); see also Douglas R. Richmond, Issues and Problems in "Other Insurance," Multiple Insurance, and Self-Insurance, 22 Pepp. L. Rev. 1373,1376-82 (1995) (discussing "other insurance" provisions and stating that " '[o]ther insurance1 refers only to two or more policies insuring the same risk, and the same interest, for the benefit of the same person, during the same period").

¶ 49. In this case, neither of the requisite conditions are met, and therefore, Wis. Stat. § 631.43(1) does not apply. The issue is not which of two or more policies pays first because the Liberty Mutual policies are not concurrent policies between competing insurers that apply to the same time period. Therefore, the insured's right to recover is not affected and Wis. Stat. § 631.43 does not apply.

¶ 50. In an attempt to limit the scope of Wis. Stat. § 631.43, Liberty Mutual argued to this court that this statute only applied in the context of automobile policies. We disagree because the text of the statute does not support such a restriction. Moreover, this statute falls under chapter 631 entitled "Insurance Contracts Generally" rather than under chapter 632, subchapter IV which is entitled "Automobile and Motor Vehicle Insurance." Accordingly, Wis. Stat. § 631.43(1) does not apply to successive insurance policies.

C. Allocation

¶ 51. Lastly, we must decide the extent of Liberty Mutual's duty to defend and indemnify when the claimant's alleged injury does not occur entirely within a policy period. Plenco argues that Liberty Mutual must fully defend the lawsuits and that Liberty Mutual is obligated to indemnify all sums, up to the policy limits. Liberty Mutual, on the other hand, argues that it need not defend nor indemnify for injury that takes place outside the policy period. We conclude that once this policy is triggered, Liberty Mutual must fully defend the lawsuit in its entirety and that under its policy, Liberty Mutual is responsible for "all sums," up to policy limits, whether the compensation is for damage that occurs "partly before and partly within the policy period."

¶ 52. Again, we acknowledge that courts across the country have largely taken one of two approaches. Some courts have adopted a pro rata approach to allocating damages.¹⁴ Under a pro rata approach, the insurer is responsible for only a pro rata share of the damages based upon the years that it provided coverage relative to years when no coverage was purchased. Thus, an insurer is liable for only the damages that accrue during a policy period. Other courts have adopted an "all sums" approach.¹⁵ Under an all sums approach, the insurer is required to pay all sums that result from bodily injury that has triggered a policy.

¶ 53. To determine which policies are triggered, Wisconsin has adopted the continuous trigger theory. Society, 233 Wis. 2d 207, ¶¶ 8-9. This approach is especially useful in cases that involve an ongoing exposure to a harmful substance with harm occurring over several policy periods. Id. A policy is triggered when injury occurs during the policy period. Id., ¶ 8. Under the continuous trigger theory, all policies are triggered from exposure until manifestation. Id. Under the language of this policy, "bodily injury, sickness or disease" "during the policy period" triggers the policy.

¶ 54. Once a policy is triggered, the policy requires Liberty Mutual to "pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of Coverage A. bodily injury or Coverage B. property damage to which this policy applies, caused by an occurrence . . . ." However, in the years where no policy existed, there are no policy limits to be paid.

¶ 55. In our analysis, we are again driven by the policy language. Liberty Mutual's policy contains no language that limits its obligation to a pro rata share. In fact, the policy obligates Liberty Mutual to pay for injury that occurs "partly before and partly within the policy period." "[I]f an occurrence gives rise to Bodily Injury or Property Damage which occurs partly before and partly within the policy period the liability of the company under this policy for such occurrence shall not exceed $500,000 . . . ." In addition, even if there is arguably some language to support a pro rata allocation, that too is susceptible to more than one reasonable interpretation, and as a result, we must construe the policy language in favor of coverage. See Danbeck, 245 Wis. 2d 186, ¶ 10.

¶ 56. Given Liberty Mutual's definition of "occurrence," which includes "continuous or repeated exposure," Liberty Mutual contemplated a long-lasting occurrence that could give rise to bodily injury over an extended period of time; nonetheless, it failed to specifically include a pro rata clause. Moreover, the language of the aggregate liability section also reflects that Liberty Mutual contemplated coverage for damages that fall outside the policy period.

¶ 57. Liberty Mutual argues that the definition of "bodily injury" supports its pro rata argument. "Bodily injury" is defined as "bodily injury, sickness or disease sustained by any person which occurs during the policy period, including death at any time resulting therefrom." As a result, Liberty Mutual argues that the policy only covers bodily injury that occurs during a policy period. However, bodily injury during the policy period is what triggers the policy; the definition of "bodily injury" is not a limitation of liability clause.

¶ 58. Liberty Mutual also argues that if Plenco did not purchase a policy for specific periods of time, Plenco should not be awarded coverage for those times that it did not pay for coverage. Under the language of this policy — once a policy is triggered by bodily injury, Liberty Mutual is responsible for "all sums" that arise out of the injury, up to that policy's limits.

¶ 59. Liberty Mutual lastly argues that by adopting an all sums approach, we are rewriting the contract. This argument is puzzling given that no pro rata language or clause exists in the contract, and in fact, the phrase "all sums" is in the body of the policy. Thus, to insert the pro rata language, we would have to rewrite the insurance policy.

¶ 60. In addition to our conclusion that a pro rata approach does not apply to allocating damages here, we also conclude that there can be no pro rata approach to the duty to defend. Under Wisconsin law, if coverage exists, an insurer must defend the entire suit even though some of the allegations fall outside the scope of coverage. U.S. Fire Ins. Co. v. Good Humor Corp., 173 Wis. 2d 804, 824-25, 496 N.W.2d 730 (Ct. App. 1993). Here, the same principle applies. We do not base the scope of a duty to defend upon whether some allegations fall outside of the complaint or whether some of the damages fall partly within and partly outside of a policy period. If the duty to defend arises, the insurer must defend the lawsuit in its entirety.

V CONCLUSION

¶ 61. We conclude that under the language in this policy and the facts of this case, each claimant's repeated exposure is one occurrence; Wis. Stat. § 631.43(1) does not apply to successive insurance policies; and once this policy is triggered, Liberty Mutual must fully defend the lawsuit in its entirety and pay for all sums up to the policy limits that Plenco is obligated to pay because of the injury. The policy language here does not support a pro rata allocation of damages.

By the Court. — Certified questions of law answered and cause remanded to the United States Court of Appeals for the Seventh Circuit.

1 All subsequent references to the Wisconsin Statutes are to the 2005-06 version unless otherwise indicated.

2 Furthermore, when arguing before the Seventh Circuit Court of Appeals, the parties made nearly identical arguments.

3 See Plastics Eng'g Co. v. Liberty Mut. Ins. Co., 514 F.3d 651, 660 (7th Cir. 2008) (stating that this contract language undoubtedly appears in other contracts governed by Wisconsin law).

4 The language contained in Wis. Stat. § 631.43(1) has not been revised since its creation in 1975. Therefore, all subsequent references to this statute are to the 1975-current version unless otherwise indicated.

5 While, according to the stipulated facts, Plenco purchased excess or umbrella excess policies from other insurers at times when it sold asbestos-containing products, those policies are not at issue in this litigation.

6 Plastics Eng'g Co. v. Liberty Mut. Ins. Co., 466 F. Supp. 2d 1071 (E.D. Wis. 2006).

7 See, e.g., Liberty Mut. Ins. Co. v. Treesdale, Inc., 418 F.3d 330, 334-39 (3d Cir. 2005); Air Prods. & Chems., Inc. v. Hartford Accident & Indem. Co., 707 F. Supp. 762, 772-74 (E.D. Pa. 1989); Owens-Illinois, Inc. v. Aetna Cas. & Sur. Co., 597 F. Supp. 1515, 1524-28 (D.D.C. 1984); Owens-Illinois, Inc. v. United Ins. Co., 625 A.2d 1, 21-23 (N.J. Super. Ct. App. Div. 1993); U.S. Gypsum Co. v. Admiral Ins. Co., 643 N.E.2d 1226, 1257-60 (Ill. Ct. App. 1995).

8 See, e.g., Fina, Inc. v. Travelers Indem. Co., 184 F. Supp. 2d 547, 549-53 (N.D. Tex. 2002); Metro. Life Ins. Co. v. Aetna Cas. & Sur. Co., 765 A.2d 891, 896-909 (Conn. 2001).

9 See, e.g., In re Prudential Lines Inc., 158 F.3d 65, 79-83 (2d Cir. 1998); Stonewall Ins. Co. v. Asbestos Claims Mgmt. Corp., 73 F.3d 1178, 1212-14 (2d Cir. 1995); Commercial Union Ins. Co. v. Porter Hayden Co., 698 A.2d 1167, 1210-11 (Md. Ct. Spec. App. 1997); Cole v. Celotex Corp., 588 So. 2d 376, 390-91 (La. Ct. App. 1991).

10 The London Market court criticizes a number of the courts cited above for their failure to examine the relevant policy language. London Mkt. Insurers v. Superior Court, 53 Cal. Rptr. 3d 154, 161 (Ct. App. 2007). The court states, "while we recognize that consistent interpretation of standardized terms in insurance contracts promotes clear understanding of future contracts, it would be foolish to state as a matter of law that the word occurrence has the same meaning in all insurance contracts." Id. (citing Flintkote Co. v. Gen. Accident Assurance Co., 410 F. Supp. 2d 875, 887 (N.D. Cal. 2006)) (internal quotations and ellipses removed).

11 This definition, which was used in the primary policy from January 1, 1973, through January 1, 1989, and the following two definitions of "occurrence" are taken from the stipulated facts in this case. The parties do not assert that the differences between these three definitions change the meaning of "occurrence"; we agree. As stated in ¶ 12, the primary policy from January 1, 1967, through January 1, 1973, used the following definition of "occurrence": "an accident, including injurious exposure to conditions, which results, during the policy period, in bodily injury or property damage neither expected nor intended from the standpoint of the insured." As stated in ¶ 19, the excess policies used the following definition of "occurrence": " 'occurrence' means injurious exposure to conditions, which results in personal injury.. . neither expected nor intended from the standpoint of the insured."

12 In Society, the parties agreed that only one occurrence had taken place and the court of appeals concluded that "Society must make good on each [triggered] policy." Society Ins. v. Town of Franklin, 2000 WI App 35, ¶ 11, 233 Wis. 2d 207, 607 N.W.2d 342. This does not give rise to an inconsistency. The number of policies triggered is distinct from the number of occurrences. The district court, here, seemingly concluded that because there was only one occurrence, multiple policies could not be triggered. However, under a continuous trigger theory, each policy from injury to manifestation may be triggered despite the fact that only one occurrence, the repeated and continuous exposure, caused the injury.

13 Wisconsin Stat. § 203.11 (1973-74), "Effect of other policies on same risk," provided in part:

[T]he insuring company shall not be liable for loss or damage occurring while the insured shall have any other contract of insurance,... such other or additional insurance,. .. shall nevertheless not operate to relieve the insuring company from liability for loss or damage occurring while the insured shall have such other contract of insurance .... Subject to all other terms and conditions of its policy, each insuring company shall be liable for its proportionate share of any such loss or damage ....

14 See, e.g., Sec. Ins. Co. of Hartford v. Lumbermens Mut. Cas. Co., 826 A.2d 107, 118 (Conn. 2003); Domtar, Inc. v. Niagara Fire Ins. Co., 563 N.W.2d 724, 732-33 (Minn. 1997); Spartan Petrol. Co., Inc. v. Federated Mut. Ins. Co., 162 F.3d 805, 812 (4th Cir. 1998); Olin Corp. v. Ins. Co. of N. Am., 221 F.3d 307, 322-23 (2d Cir. 2000); Gulf Chem. & Metallurgical Corp. v. Associated Metals & Minerals Corp., 1 F.3d 365, 371-73 (5th Cir. 1993); Commercial Union Ins. Co. v. Sepco Corp., 765 F.2d 1543, 1544 (11th Cir. 1985).

15 See, e.g., Hercules, Inc. v. AIU Ins. Co., 784 A.2d 481, 490-94 (Del. Super. Ct. 2001); Allstate Ins. Co. v. Dana Corp., 759 N.E.2d 1049, 1058 (Ind. 2001); Am. Nat'l Fire Ins. Co. v. B&L Trucking & Constr. Co., 951 P.2d 250, 253-54 (Wash. 1998); J.H. France Refractories Co. v. Allstate Ins. Co., 626 A.2d 502, 507 (Pa. 1993); ACandS, Inc. v. Aetna Cas. & Sur. Co., 764 F.2d 968, 974 (3d Cir. 1985).