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ELJER MFG. v. LIBERTY MUT. INS. CO.

June 14, 1991

ELJER MANUFACTURING, INC., a Delaware corporation, and Successor in Interest to HOUSEHOLD MANUFACTURING, INC., Plaintiff, THE TRAVELERS INDEMNITY COMPANY OF ILLINOIS, and HIGHLANDS INSURANCE COMPANY, Intervening Plaintiffs,
v.
LIBERTY MUTUAL INSURANCE COMPANY, a Massachusetts corporation, Defendant



The opinion of the court was delivered by: HART

 WILLIAM T. HART, UNITED STATES DISTRICT JUDGE

 This case is a declaratory judgment action concerning the issue of which of a series of insurance policies provides coverage for various claims against Eljer Manufacturing, Inc., the plaintiff in this action. *fn1" Presently pending are cross motions for summary judgment. *fn2" All parties agree that this case can be resolved on summary judgment by interpreting the language of the insurance policies, any remaining factual disputes being nonmaterial.

 The parties have entered into a lengthy stipulation of facts. Many of those facts, however, are immaterial to the resolution of this case which requires only a general declaration as to the meaning of the insurance policies, not a specific determination as to which policy provides coverage for any particular claim. The basic facts are as follows.

 This action was brought by Eljer in April 1988. Named as defendant was Liberty Mutual Insurance Company ("Liberty"), a Massachusetts corporation with its principal place of business in Massachusetts. Liberty issued a series of one-year insurance policies to Eljer that ran from January 1, 1979 to January 1, 1989. The four policies that covered calendar years 1979 through 1982 were issued in New York. The six policies that covered calendar years 1982 through 1988 were issued in Illinois. Five supplemental policies covering Texas operations and calendar years 1980 through 1985 were also issued. The first three were issued in New York and the latter two in Illinois. United States Brass Corporation ("U.S. Brass") is a subsidiary of Eljer and is a named insured under all of the policies. In October 1988, Highlands Insurance Company ("Highlands"), a Texas corporation with its principal place of business in Texas, was permitted to intervene as a party plaintiff. In November 1988, Travelers Indemnity Company of Illinois ("Travelers"), an Illinois corporation with its principal place of business in Illinois, was permitted to intervene as a party plaintiff. Highlands provided Eljer with first level excess coverage for the years 1979 through 1981. Travelers provided Eljer with first level excess coverage for the years 1982 through 1986.

 The parties agree that, despite a slight modification of policy language over the years, the same ruling should apply to all the policies. From 1979 through 1985, the policies contained the following language:

 
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,. . . .
 
* * * * * *
 
" property damage" means (1) physical injury to or destruction of tangible property which occurs during the policy period, including the loss of use thereof at any time resulting therefrom, or (2) loss of use of tangible property which has not been physically injured or destroyed provided such loss of use is caused by an occurrence during the policy period.
 
* * * * * *
 
"occurrence" means, (a) 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" . . . .

 From 1986 through 1988, the policies contained the following language:

 
We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this policy applies. . . . This insurance applies only to "bodily injury" or "property damage" which occurs during the policy period. The "bodily injury" or "property damage" must be caused by an "occurrence." The "occurrence" must take place in the "coverage territory." . . .
 
* * * * * *
 
"Property damage" that is loss of use of tangible property that is not physically injured shall be deemed to occur at the time of the "occurrence" that caused it.
 
* * * * * *
 
"Occurrence" means an accident, including continuous or repeated exposure to substantially the same ...

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