Insurance company files oppositions in suit over defense of asbestos suit

An insurance company being sued for failing to pay for the defense in a Madison County asbestos suit filed oppositions to Apex Oil's motions to strike affirmative defenses and to dismiss their counterclaim for declaratory judgment on Aug. 16.

Apex filed the suit against Arrowood Indemnity Co. last December for defense costs it incurred in defending a 2010 asbestos lawsuit.

The asbestos suit was filed by Mary Krohn over the death of her husband, Richard A. Krohn, who worked for Clark Oil from 1957 to 1996. Apex is Clark’s successor.

Arrowood’s arguments in both of its oppositions to the defendant's motions focus on the insurance company's policy and accuse Apex of presupposing it had a duty to defend under the policy.

According to Arrowood’s opposition to Apex’s motion to strike affirmative defenses, the company argues it should not be held responsible for covering the asbestos claim because it was not notified in a timely manner.

Richard Krohn was last exposed to asbestos at the Clark Oil Blue Island facility in 1996 and his suit for asbestos bodily injuries was filed against Apex on Aug. 4, 2010. Arrowood, however, asserts that it didn’t receive notice of the case until December 2012 when Apex filed the instant action against Arrowood.

In opposition to Apex’s motion to dismiss Arrowood’s counterclaim for declaratory judgment, the insurance company contends it is not responsible for covering the case because Apex’s policy expired well before the incident.

Its last policy expired on January 1, 1982, meaning Richard Krohn’s last exposure did not take place during the period the policy was in effect as required to trigger coverage, the opposition states.

Arrowood further explained that it operates on a 36 month provision, which says it is not responsible to cover bodily injury by disease unless filed 36 months or sooner after the policy expires.

In this particular case, Richard Krohn wasn’t diagnosed with mesothelioma until December 2008, which the company asserts was well after the required time period for coverage.

The insurance company also argues in its opposition to dismiss the counterclaim that Apex “does not even remotely identify or sustain its burden of establishing any enumerated ground for dismissal” in its 2 ½ page motion.

In the opposition, Arrowood points out that Apex is assuming Illinois law will apply to the case, but the court has not determined which state law will apply as Arrowood is a Wisconsin-based company and Apex is located in Missouri.

Arrowood’s opposition requests Apex's motion to strike certain affirmative defenses be denied, along with its  demand for a jury trial, and to supplement defenses when the time is appropriate.

The insurance company argues that its affirmative defenses are necessary. While Apex alleges that Arrowood failed to provide factual support for the affirmative defenses, Arrowood asserts that this is unsupported considering its defenses are clearly based on its policy, Apex’s allegation or both.

“Illinois does not require a defendant to exhaustively restate factual allegations that have already been pled in the complaint in order to raise a defense thereon,” the motion states.

Arrowood also argues that Apex’s claim of being unfairly “surprised” by its affirmative defenses is improper because it has already responded to Apex’s requests to admit, document demands and interrogatories.

Previously, Apex wanted Arrowood to admit receiving a tender letter from Apex on or about Dec. 6, 2010, and that Arrowood issued a policy, to admit it received notice of the Krohn lawsuit and to admit it did not defend Apex under “reservation of rights.”

Arrowood has responded to the plaintiff’s requests by saying it is not legally obligated to pay a claim when damages involve “bodily injury by accident or by disease, including death.”

Apex seeks an award for the amount spent defending itself in the Krohn lawsuit, plus attorneys’ fees, pre and post-judgment interest, costs and other relief the court deems just.

Madison County Circuit Judge William Mudge scheduled a motion hearing for 1:30 p.m. Oct. 31. Matters to be heard include the defendant’s motion for admission of counsel, the plaintiff’s motion to dismiss Arrowood’s counterclaim and the plaintiff’s motion to strike.

William J. Knapp and Heather Mueller-Jones of Knapp, Ohl and Green in Edwardsville represent Apex.

Gary Meadows of HeplerBroom in Edwardsville represents the defense.

The case had been assigned to Circuit Judge Andreas Matoesian, but was transferred to Mudge after Arrowood sought substitution as a matter of right.

Madison County Circuit Court case number 12-L-1962.