THE ATCHISON, TOPEKA AND ) SANTA FE RAILWAY COMPANY, ) Plaintiff, ) ) v. ) Case No. 94-CV-1464 ) STONEWALL INSURANCE ) COMPANY, et. al., ) Defendants. ) ___________________________)
Santa Fe's Motion for Partial Summary Judgment
Declaring that the NIHL Loss Arises Out of One Occurrence
The above captioned matter comes before the court on Plaintiff's Motion for Partial Summary Judgment, pursuant to K.S.A. 60-256. Plaintiff requests the court declare that the underlying noise induced hearing loss (NIHL) claims, for which Plaintiff seeks indemnification, arose out of one occurrence. After careful consideration, the Court concludes as follows:
1. The Plaintiff, The Atchison, Topeka and Santa Fe Railway Company ("Santa Fe"), as of March 1998, has paid an excess of $28 million in connection with over 3,800 claims and lawsuits that have been filed by its employees. The employees alleged that they sustained NIHL from the continuous exposure to excessive noise while employed by Santa Fe.
2. Santa Fe purchased millions of dollars of comprehensive general liability insurance policies throughout the years, also maintaining a variable level of Self-Insured Retention (SIR).
3. The pre-1974 policies contain the following insuring agreements, which, subject to the terms and conditions of the policies, typically require the insurers to:
indemnify [Santa Fe] for any and all sums which [Santa Fe] shall become liable to pay, and shall pay to any person or persons as compensation for injury or damage to persons . . . arising out of any accident or accidents caused by or growing out of [Santa Fe's] Railroad operations. . .
Lloyd's 12/15/69 - 12/15/70 policy at SF 9-SF10.
Some of the pre-1974 policies define "occurrence" to mean, "one or more accidents or series of accidents arising out of or resulting from one event."
Lloyd's 12/15/69 - 12/15/70 policy at SF12.
4. The post-1974 policies typically provide that Certain Defendants (1) will:
indemnif[y] [Santa Fe] for any and all sums which [Santa Fe] shall become legally liable or obligated by contract . . . to pay to any person or persons as compensation or damages for injury or damage to any person or persons . . . arising out of any occurrence or occurrences caused by or growing out of [Santa Fe's] operations. . .
ISLIC 2/15/74 - 2/15/75 policy GP 1496 at SF / 0001110
The post-1974 policies typically defined "occurrence" as:
[O]ne or more accidents or disasters and/or series of accidents or disasters arising out of or resulting from one event.
. . Each "occurrence" shall be deemed to commence on the first happening of any material damage not within the period of any previous "occurrence".
5. The limits and retention section of the post-1974 policies state:
A. Limit: the limit of liability hereunder shall not exceed the sum of $5,000,000 Ultimate Net Loss . . . excess of $3,000,000 Ultimate Net Loss any one occurrence . . .
B. Retention: Underwriters shall not be liable hereunder unless the Ultimate Net Loss amounts to $3,000,000 any one occurrence . . . and then only for the sum in excess of $3,000,000 Ultimate Net Loss subject to the limit of $5,000,000 Ultimate Net Loss . . .
ISLIC 2/15/74 - 2/15/75 policy GP 1496 at SF / 0001111
6. Steve Hanks, attorney with the law firm of Helm, Pletcher, Hogan, Bowen & Saunders, handled over 100 NIHL lawsuits and 25 claims against Santa Fe. Hanks testified in his deposition in this case:
Q: Okay. In the noise-induced hearing loss cases, I take it from your affidavit that your belief or feeling or legal position is that the negligence was Santa Fe's failure to have a timely hearing conservation program; is that correct?
A: It was and is our position.
Q: Okay. Causation. What's the causation of the claims?
A: Well, as a result of Santa Fe's failure to have a timely and appropriate hearing conservation program, the employees suffered noise-induced hearing loss while working for the railroad. I don't know exactly what you are asking.
* * *
Q: I'm asking you, you told me the elements of a FELA cause of action are negligence, causation, and damages. Negligence we've talked about. What do you mean by causation?
A: Well, when you have an industry, any industry that generates noise in the process of work, then it is incumbent on the industry to provide a hearing conservation program for their employees who are working, to ensure that they do not suffer damage to their hearing.
The railroad failed to do that. Had the railroad instituted a timely and appropriate hearing conservation program, our clients would not have suffered noise-induced hearing loss.
* * *
A: See, what I want to make sure you understand, because you keep talking about causation, in a FELA case, you have to prove that the defendant was negligent, you have to prove that the defendant's negligence caused the harm and then you have to prove the extent of the harm.
So in the hearing loss cases, it didn't do us any good to prove that noise -- put it this way: Just proving that their hearing had been damaged by noise did not even get us to the jury, because that did not establish causation.
Causation that you are required to establish under the FELA is that the defendant's negligence caused, in whole or in part, damage to the plaintiffs and it was the negligence -- it was the fact that their negligence caused the harm that we had to prove. The simple fact that there was noise out there doesn't establish negligence.
7. John Fabry, an attorney at the law firm of Jones and Granger, handled NIHL cases against Santa Fe. Jones and Granger filed over 1,000 claims against Santa Fe, approximately 230 of those being lawsuits. Fabry testified in his deposition regarding the Jones and Granger cases:
Q: Can you elaborate for me as well as you can what theory of liability has been in noise-induced hearing loss cases?
A: There was sufficient information available for the railroad to recognize that a hazard existed to their employees and sufficient information to protect them against that hazard by way of implementing a hearing conservation program, and the railroad simply failed to do that. That failure to implement the program caused hearing loss in individual claimants, and, therefore, they were entitled to recover damages from the railroad under the FELA.
8. Noise is an obvious and unavoidable by-product of Santa Fe's normal railroad operations.
9. The NIHL claimants alleged that their work environment involved a network of multiple excessive noise sources and that they were exposed in different ways on a daily basis to noises from a variety of sources. The claimants, whether engineers, carmen, or maintenance-of-way workers, were mobile employees, changing locations and job assignments in the course of their work.
10. Plaintiff asserts that an adequate hearing conservation program requires six system-wide components: (1) noise exposure monitoring; (2) employee notification of monitoring results; (3) annual audiometric testing for affected employees; (4) availability of adequate hearing protection devices; (5) a NIHL training program; and (6) feasible administrative and engineering controls to reduce exposure to potentially hazardous noise levels as measured by appropriate testing and monitoring. Defendants controvert this fact only to state that another element is necessary to have an adequate hearing conservation program: proper management at all (including local) levels.
Santa Fe contends that the claims and lawsuits brought by its employees resulted from the company's failure to timely implement an effective hearing conservation program (HCP). On this basis, Santa Fe requests that the court qualify these claims as having arisen from a single occurrence for the purposes of determining the extent of liability of Santa Fe's comprehensive general liability insurance policies. Defendants contend, however, that the liability of Santa Fe resulted from multiple occurrences. Thus, Defendants are asserting that they are not liable for these claims because no individual claim was for an amount larger than Santa Fe's self-insured retention level. Defendants also assert that Santa Fe's single occurrence theory is contrary to the contract language, inconsistent with the "cause" test used to determine the number of occurrences, contradicts the Kansas Supreme Court's recognition that the NIHL claims arose from multiple occurrences, and is counter to the underlying allegations which clearly indicate that the damage arose from separate and distinct negligent acts.
Summary judgment is appropriate when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits if any, show that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Dickens v. Snodgrass, Dunlap & Co., 255 Kan. 164, 166, 872 P. 2d. 252 (1994).
Generally before summary judgment may be granted, the record before the court must show conclusively that there remains no genuine issue as to a material fact and the moving party is entitled to judgment as a matter of law. A mere surmise or belief on the part of the trial court, no matter how reasonable, that a party cannot prevail upon a trial will not warrant a summary judgment if there remains a dispute as to a material fact which is not clearly shown to be sham, frivolous, or so unsubstantial that it would be futile to try the case. The manifest purpose of summary judgment is to obviate delay when there is no real issue of fact. A court should never attempt to determine the factual issues on a motion for summary judgment, but should search the record for the purpose of determining whether factual issues do exist. If there is a reasonable doubt as to their existence, a motion for summary judgment will not lie. A court, in making its determination, must give to the party against whom summary judgment is sought the benefit of all inferences that may be drawn from the facts.
Mechtley v. Price, 217 Kan. 344, 347, 536 P. 2d. 1385 (1975). Where genuine issues of fact remain undetermined, the granting of summary judgment is improper. Willard v. City of Kansas City, 235 Kan. 655, Syl. ¶1, 681 P. 2d. 1067 (1984). The court, upon drawing all inferences in the light most favorable to the Defendant, finds that no genuine issues of material fact have been raised and that the Plaintiff is entitled to judgment as a matter of law.
Certain Defendants assert that Santa Fe's single occurrence theory is contrary to the language contained in the insurance contracts. The pertinent contract language defines an occurrence to mean, "[o]ne or more accidents or disasters and/or series or accidents or disasters arising out of or resulting from one event." This language is found in the post-1974 policies. The pre-1974 policies define occurrences as being, "one or more accidents or series of accidents arising out of or resulting from one event."
The Defendants are contesting that a 30 year failure to act is not an "event" under the policy, but rather a "non-event". Thus, they maintain that Santa Fe's failure to timely implement an HCP is not an "event" under the terms of the insurance policies. The event, according to the Defendants, is the exposure to the excessive noise which occurred in many different locations, at many different machines, and at many different times.
As support for the Defendant's contention that a corporate omission is not an event they cite to Black's Law Dictionary.
Event: the consequence of anything; the issue or outcome of an action as finally determined; that in which an action, operation, or series of operations, terminates. Noteworthy in happening or occurrence. Something that happens.
Distinguished from an act in that an act is the product of the will whereas an event is an occurrence which takes place independent of the will such as an earthquake or flood.
Black's Law Dictionary 498, (5th ed. 1979) (emphasis added).
Defendants also cite to the case of Babcock & Wilcox Co. v. Arkwright-Boston Manufacturing Mutual Ins. Co., 53 F. 3d. 762 (6th Cir. 1995). Babcock involved the company's use of asbestos in its broilers which resulted in claims by employees arising from their exposure to asbestos. The plaintiff asserted that the "event" under the policy was that of the company's decision to use asbestos in the broilers, however the Babcock court did not agree. The court in Babcock found that in this particular circumstance the event was not the corporate failure but instead the multiple exposures to asbestos. The Defendants are asserting that Babcock stands for the proposition that a "corporate failure" is not an event.
However, there are numerous cases that suggest that a corporate failure to act may be considered an event. In Folz v. State of New Mexico, 110 N.M. 457, 797 P. 2d. 246 (1990), the event was the failure of the defendant to design and implement an appropriate traffic-control plan for a construction project. Such failure by the defendant was used in the determination of whether there were single or multiple occurrences. See also Washoe County v. Transcontinental Insurance Co., 110 Nev. 798, 878 P.2d. 306 (1994) (holding that the county's failure to monitor daycare caused the children's injuries and is considered an occurrence), Chemstar, Inc. v. Liberty Mutual Insurance Co., 797 F. Supp. 1541 (C.D. Cal. 1992) (holding that the company's failure to warn that the lime should not be used indoors was the underlying cause of the plaster-pitting claims), and Home Indemnity Co. v. City of Mobile, 749 F. 2d. 659 (11th Cir. 1984) (holding that the liability for the overflows of the city's drainage system was the result of the failure of the city to properly construct and maintain the drainage system).
Santa Fe also cites to an excerpt from a Lloyd's of London insurance law treatise, in which the author states:
In the past, that event was usually the occurrence giving rise to the insured's liability, such as an act of negligence on his part. Whereas a positive act of negligence is likely to be of short duration and thus easy to pin to a relevant period of time, negligence by omission can be regarded as continuing and attributable to any contract or insurance in force during its continuance. This is one factor that has encouraged the development and use of claims-made contracts, which specify the event as the claim by a third party victim arising out of the occurrence.
Malcolm A. Clarke, The Law of Insurance Contracts, §17-4B at 399 (1994). This treatise also supports the conclusion that a corporate failure to act may be considered an event.
In the alternative, the Defendants contend that even if the failure to timely implement an HCP is the "event", it is not a single occurrence. The Defendants assert that there were multiple occasions upon which Santa Fe failed to implement an HCP and that these multiple failures amount to multiple occurrences. To support this assertion the Defendants have relied upon letters and reports of Santa Fe, claiming that they show the failure to implement an HCP occurred on multiple occasions. Upon reviewing the documents before the court, the letters represent observations that were made and studies done regarding the potential damage caused by long-term exposure to noise. However, there is no specific evidence that the corporation rejected the implementation of an HCP multiple times. Knowledge or observance of potential NIHL or tests of decibel levels does not constitute specific and multiple failures to implement an HCP.
Another item the Defendants rely upon to prove multiple failures by Santa Fe is a statement made by a NIHL claimant's attorney during the voir dire examination. The attorney asked, "Does anyone have a problem evaluating the conduct of the people up in Chicago where these decisions were being made about not instituting the hearing conservation program. . ." The Defendants have suggested that this statement proves that there were numerous decisions made concerning the issue of hearing protection. This court views this as a weak attempt to show evidence of multiple failures. An attorney's question during voir dire does not constitute evidence.
Defendants assert that Santa Fe's single occurrence theory is contrary to the "cause test." In the case of North River Ins. Co. v. Huff, 628 F. Supp. 1129 (D. Kan. 1985), the court applied the "cause test" used in Appalachian Insurance Co. v. Liberty Mutual Insurance Co., 676 F. 2d. 56 (3rd Cir. 1982). In applying this test the court must determine if there was one proximate, uninterrupted and continuing cause which resulted in all of the injuries and damage. North River at 1133.
The Defendants maintain that the court should apply a strict proximate cause analysis in determining the cause of the injuries. As support for this proximate cause analysis the Defendants cite to the case of North River, in which the court analyzed numerous loan transactions to determine if the loan program constituted a single occurrence. The court found that the injuries arose not from the decision to implement the loan swap program but from the alleged negligence on the part of the insureds in making or approving the unprofitable loans. Thus, each of the loans was held to be a separate occurrence. Id. at 1134. See also St. Paul Fire & Marine Insurance Co. v. Chong, 787 F. Supp. 183 (D. Kan. 1992) aff'd 979 F. 2d. 858 (10th Cir. 1992) (held that each client injured by the attorney's negligence constituted a separate occurrence under the insurance policy despite the similarities and interrelationship of the service).
Santa Fe requests that this court apply a broader view of the "cause test." In support for this, Santa Fe cites the case of Champion International Corp. v. Continental Casualty Co., 546 F. 2d. 502 (2nd Cir. 1976), which held that 1,400 individual installations of defective panels were not separate occurrences but constituted a single occurrence with the occurrence being the continuous and repeated selling of the paneling. The Court in Champion determined that the "per occurrence" based contract rather than a "per claim" based contract indicated that the policy was not intended to gauge coverage on the basis of individual accidents but upon the underlying circumstances which resulted in the claim for damages. Id. at 505-506. Santa Fe urges that this broad interpretation of the cause test should be applied here and that the cause of the hearing loss claims be linked back to the single occurrence of the failure to timely implement an HCP.
Santa Fe maintains that another reason for applying a broad causal analysis is because the policy provides coverage for bodily injury "arising out of" an occurrence. Santa Fe asserts that the terms "arising out of" suggest applying a cause test that is less stringent than proximate cause. As support for this contention Santa Fe cites the case of Pestock v. State Farm Automobile Insurance Co., 9 Kan. App. 2d. 188, 674 P. 2d. 1062 (1984). Pestock held that, "the phrase 'arising out of the . . . use of' a vehicle imparts a more liberal concept of causation than does the phrase 'proximate cause.'" Id. at 189, quoting from Farm Bureau Mutual Insurance Co., Inc. v. Evans, 7 Kan. App. 2d. 60, 63, 637 P. 2d. 491 (1981). There have been numerous Kansas cases which have held that the phrase "arising out of" results in more liberal causation. See Garrison v. State Farm Mutual Automobile Insurance Co., 20 Kan. App. 2d. 918, 894 P. 2d. 226 (1995) aff'd 258 Kan. 547, 907 P. 2d. 891 (1995) (held that the injury sustained by the accidental discharge of a gun while unloading it from a vehicle fell under the insurance provision of injury that, "arises out of the ownership, maintenance, or use of a car or other motor vehicle." The causal connection was held to be satisfied by the use of the automobile for transporting the gun while hunting.), McIntosh v. Scottsdale Insurance Co., 992 F. 2d. 251 (10th Cir. 1993) (held that the phrase "arising out of" allowed for more liberal causation), and Missouri Pacific Railroad Co. v. Kansas Gas and Electric Co., 862 F. 2d. 796 (10th Cir. 1988) (held that the "arising out of" phrase allowed a causal connection to be maintained between the injuries sustained by an employee in attempting to re-rail the engine and the obligation to indemnify for any claim that arose out of the failure of defendant to keep the track clear of obstructions, even though defendant claimed to have done nothing to make the area unsafe).
The court, after considering what type of causal relationship is required to meet the terms of the contract between the Defendants and Santa Fe, finds that a broader causal analysis should be applied. The insurers could have required in the contract language that a closer proximate cause relationship be shown before liability would be incurred, however they failed to do so. Defendants are required, "[t]o indemnify [Santa Fe] for any and all sums which [Santa Fe] shall become liable to pay, and shall pay to any person or persons as compensation for injury or damage to persons . . . arising out of any accident or accidents caused by or growing out of [Santa Fe's] Railroad operations. . ." Lloyd's Policy No. 614/53930, June 1970. Kansas case law clearly supports this broader causal analysis when the contract contains the phrase "arising out of." Therefore, although the proximate cause of the NIHL injuries is the actual noise from the machines, this court will apply a broader causal approach and find that the failure to timely implement an HCP is sufficiently connected causally to the hearing loss of the employees. Thus, the "cause" test is not violated if a single occurrence is found to exist. This is not a question of fact, but rather an interpretation of the meaning of the policy. "As a general rule, the interpretation or construction and meaning and legal effect of written instruments are matters of law exclusively for the court and not questions of fact." Garrison v. State Farm Mutual Automobile Insurance Co., 20 Kan. App. 2d. 918, 922, 894 P. 2d. 226 (1995).
The Defendants contend that a finding of single occurrence would directly contradict the holding of the Kansas Supreme Court in the reversal of an earlier decision in this case. Previously this case was before Judge Terry Bullock of the District Court of the Third Judicial District of Kansas, where one of the issues decided prior to discovery was that there was a single occurrence. On appeal the Kansas Supreme Court reversed the decision of the District Court and remanded the case to allow for compliance with Supreme Court Rule 141, requiring that before a motion for summary judgment may be heard the parties must have filed a statement of uncontroverted facts relied upon by the parties. The Atchinson, Topeka & Santa Fe Railway Co. v. Stonewall Insurance Co., et. al., 1997 WL 1048134 (Kan. 1997).
Defendant relies upon the Kansas Supreme Court's lengthy quotation from CSX Transportation, Inc. v. Continental Insurance Co., 343 Md. 216, 680 A. 2d. 1082 (1996), to suggest that the Kansas Supreme Court adopted the CSX court's finding that there were multiple occurrences. The facts in CSX are very similar to the case at hand. The plaintiff was liable for NIHL claims that had arisen from operation of the railroad and was asserting that the defendant insurance companies were required to reimburse the plaintiff for these claims. The plaintiff was urging the court to find that there was only a single occurrence, while defendants were claiming that there were multiple occurrences. The issue was submitted to a jury to determine whether there was a single occurrence or multiple occurrences. The jury returned a verdict for the defendants, finding multiple occurrences. The Defendant contends that the Kansas Supreme Court, by quoting the language from the CSX case, was clearly rejecting Santa Fe's theory of a single occurrence. The issue of single or multiple occurrences however was not the issue that was before the Kansas Supreme Court. The CSX case was used to illustrate the need for discovery, since the court in CSX presented the occurrence issue to the jury as a factual question. The CSX case demonstrates that cases such as this are complex, and it was not proper, according to the Kansas Supreme Court, to have issued summary judgment on the issue without allowing discovery and compliance with Supreme Court Rule 141. Therefore, this court rejects the Defendant's contention that because the Kansas Supreme Court quoted at length from CSX, the CSX court's ruling must be applied in this case. The issue before the Kansas Supreme Court was that of whether discovery was necessary before the lower court could make such a ruling, and everything else that can be gleaned from that decision, although persuasive, is dicta and not binding upon this court.
The CSX case was an appeal from a lower court decision in which the appellant was alleging abuse of discretion by the lower court. The Appellate Court determined that the lower court had not abused its discretion in the issuance of jury instructions, yet clearly indicated that it did not attempt to determine if the cause of the NIHL claims was correctly decided at the lower court level. Id. at 1094. Another factor in the CSX case that diminishes its persuasiveness is that the jury instruction required that the proximate cause of the injuries must be determined, whereas in this case the court has determined that a broader causal analysis is appropriate.
The Defendants also assert that Santa Fe's single occurrence theory is contrary to the underlying allegations of the employees of Santa Fe in their claims for NIHL. The underlying claims list numerous causes for the loss of the claimants' hearing. The Defendants cite the example of the petition filed by John P. Livingston. Livingston alleged in his Petition against Santa Fe in the District Court of Johnson County, Kansas, that his NIHL injuries were "caused directly and proximately" when:
(a) [Santa Fe] failed to exercise due care in providing [Livingston] with a reasonably safe and healthy work environment;
(b) [Santa Fe] failed to take reasonably adequate precautionary steps to protect [Livingston] from reasonably foreseeable danger;
(c) [Santa Fe] failed to provide [Livingston] with an adequate in-house safety training program;
(d) [Santa Fe] failed to protect [Livingston] from extremely loud and excessive noise levels through the use of personal protective equipment;
(e) [Santa Fe] failed to warn [Livingston] of the potential risk and hazards associated with extreme and constant high levels of noise;
(f) [Santa Fe] failed to adequately administer a continuing hearing conservation program;
(g) [Santa Fe] failed to conform to the occupational safety and health standards promulgated under the Occupational Safety and Health Act of 1970; the Federal Railway Administration and the Walsh-Healey Act of 1969.
Appendix to Santa Fe's Memorandum in Support of Its Motion for Partial Summary Judgment Declaring That the NIHL Loss Arises Out of One Occurance, Exhibit 5.
Defendant contends that claims, such as the ones quoted above, do not support Santa Fe's contention that the failure of Santa Fe to timely implement an HCP was a single occurrence. Although Livingston does not allege that the only cause of his NIHL was Santa Fe's failure to timely implement an HCP, the allegations in his complaint are included in the components of an HCP. See Uncontroverted Statement of Fact, No. 10. Therefore, although the Defendants contend that numerous causes were claimed to have resulted in the NIHL claims, those causes would all have been addressed by a single HCP.
The court recognizes that some of the complaints which Santa Fe has asserted as NIHL claims are not the result of the failure to timely implement an HCP. An example of such a complaint would be that of Joe M. Vasquez. Vasquez listed as the cause of his hearing loss, "[I]n my (sic) job is partly, welding, and while doing it, some slack from welding drop (sic) in my right ear, this was done while working in Clovis drainge (sic) and his pitched noseis (sic) from welder and nosie (sic) of air test, during work on ears." Certain Defendants Rule 141 Statement of Uncontroverted Contentions of Fact in Support of Their Response to Santa Fe's Motion for Partial Summary Judgment Declaring That NIHL Loss Arises Out of One Occurrence, Exhibit 33. Although some of the complaint is related to loud noises there is also a significant portion of the claim that has to do with the slack that fell into Vasquez's right ear. Clearly, any claim not due to NIHL would not be included since the claim would not be an NIHL claim and therefore could not be the result of Santa Fe's failure to timely implement an HCP.
Santa Fe uses the broad causal relationship, which this court finds as the appropriate standard of causation, to link the NIHL claims to the failure to timely implement an HCP. The Defendants in asserting that there are numerous allegations as to the reason for the hearing loss contend that there is not one single event which resulted in the NIHL claims. Defendants are attempting to re-visit every NIHL claim that was asserted and to determine the direct cause of each individual's hearing loss. Santa Fe, however, asserts that it relied upon a single theory of liability in settling the NIHL claims and that this single theory of liability should be the only basis the court should use in determining the cause of the NIHL claims. There is strong support for Santa Fe's position that the court must only look to the legal liability upon which the claims were settled and not to the underlying claims themselves. In United Wats, Inc., v. Cincinnati Insurance Co., 971 F. Supp. 1375, 1385 (D. Kan. 1997), the court recognized that, ". . . the duty to indemnify is determined by the facts as they are established at trial or as they are finally determined by some other means (e.g., summary judgment or settlement)."
Santa Fe suggests that the single theory of liability upon which it settled all the NIHL claims was the failure to timely implement an HCP. Although the majority of the claims were settled before proceeding to trial there is evidence before this court that the only liability faced by Santa Fe was its negligence in failing to timely implement an HCP. An attorney, David J. Pels, who represented Santa Fe in approximately 150 NIHL lawsuits, states in his affadavit that,
[I]n the NIHL cases, the Santa Fe employees all alleged, as a basis for liability against the railroad, that Santa Fe failed to implement a timely and effective hearing conservation program protect them from excessive noise on the railroad. . . . The sum and substance of all the allegations of the railroad employees in cases that I handled was that Santa Fe was liable for negligence because it failed to implement a timely and effective hearing conservation program to protect employees from excessive noise in the workplace. All the NIHL claimants alleged that Santa Fe's failure to implement a timely and effective hearing conservation program caused their NIHL.
Appendix to Santa Fe's Memorandum In Support of Its Motion for Partial Summary Judgment Declaring That The NIHL Loss Arises Out Of One Occurrence, Exhibit 28. See also Uncontroverted Statement of Facts No. 6. The settlement agreements and claim settlements do not specify Santa Fe's liability, however the evidence before the court is that the legal liability theory behind the claims is Santa Fe's failure to timely implement an HCP.
The insurer is not entitled to relitigate the underlying action following a settlement. Nordstrom, Inc., v. Chubb & Son, Inc., 820 F. Supp. 530, 535 (W.D. Wash. 1992). "To require claims to be actually proved in an action to enforce a settlement and collect insurance proceeds would defeat the purpose of settlement agreements." Public Utility District No. 1 of Klickitat County v. International Insurance Co., 124 Wash. 2d. 789, 881 P. 2d. 1020, 1032 (1994). The affidavits of the attorneys involved in the NIHL claims setting out Santa Fe's legal liability under FELA were not refuted by the Defendants. The fact that the claimants did not use the precise language, "failure to timely implement an HCP", does not establish that there is a material question of fact. In addition the fact that claimants included other potential allegations as to causes of their NIHL in their petitions and claims does not constitute a genuine issue of material fact. Each claimant alleged failure to implement an HCP or components of an HCP and the attorneys representing Santa Fe as well as those representing claimants stated that Santa Fe's liability was due to failure to timely implement an HCP. The Defendants may not rely upon mere allegations when opposing a motion for summary judgment, but must put forth evidence to establish that there is a material question of fact. Mitzner v. State of Kansas, 257 Kan. 258, 260, 891 P. 2d. 435 (1995). The facts subject to the dispute must be material to the conclusive issues in the case, in order to preclude summary judgment. Id.
Santa Fe maintains that a strong argument for the insurance policies to be applicable is that Santa Fe had a reasonable expectation in procuring the insurance coverage that losses such as this would be covered. Defendants contend however, and the court agrees, that this was probably not the type of loss that either party contemplated. Santa Fe in acquiring such insurance policies had a reasonable expectation that such policies would cover train accidents, explosions, and other major catastrophies. This intent is evident from the high self-insured retentions Santa Fe maintained, coupled with the excess coverage contained in Defendants policies for any of a large liability.
Despite the court's finding that such coverage was not a reasonable expectation of Santa Fe, Santa Fe is not barred from recovering under the insurance policies for this loss. If the conditions fit within the terms of coverage under the insurance policy, despite such liability coverage not being within the reasonable expectations of the insured, the insurance policy will be held to apply.
The court, upon reviewing the evidence before it and considering it in the light most favorable to the non-moving party, grants the Plaintiff's Motion for Partial Summary Judgment. The implementation of the broad causal analysis, along with the legal liability theory upon which Santa Fe litigated and settled the NIHL claims, clearly shows that the failure to timely implement an HCP is the single occurrence that led to the NIHL claims.
Based on the foregoing reasons, this court grants the Plaintiff's motion for Partial Summary Judgment, and declares that the NIHL losses arose out of one occurrence.
This Memorandum Decision and Order shall serve as the Order of the Court, no further journal entry being required.
IT IS SO ORDERED.
Dated this 24th day of July , 2000.
_______________________________
Nancy Parrish
District Court Judge
I hereby certify that a copy of the above and foregoing MEMORANDUM DECISION AND ORDER was mailed this 24th day of July , 2000, to the following:
Weston W. Marsh
David V. Goodsir
Freeborn & Peters
311 S. Wacker Drive
Suite 3000
Chicago, Illinois 60606
Steve R. Fabert
Fisher, Patterson, Sayler & Smith
3550 SW 5th Street
Topeka, Kansas 66601
Thomas M. Ryun
Bollinger, Ruberry & Garvey
Citicorp Center
500 West Madison Street
Suite 2300
Chicago, Illinois 60661
Arthur A. Glassman
Michael E. Francis
Sloan, Listrom, Eisenbarth, Sloan & Glassman
714 Capitol Federal Building
Topeka, Kansas 66603
Corliss S. Worford
Richard M. Watson
Lord, Bissell & Brook
One Atlantic Center
1201 West Peachtree Street
Suite 3700
Atlanta, Georgia 30309
Daniel E. Murphy, II
Gilberg & Kiernan
1250 Eye Street, N.W.
Suite 600
Washington, DC 20005
Steven W. Cavanaugh
Fisher, Cavanaugh & Smith
534 Kansas Avenue
Suite 1035
Topeka, Kansas 66603
Eric C. Young
Dunham Boman & Leskera
103 East B Street
Belleville, Illinois 62220
Paul E. Escobar
German, Gallagher & Murtagh
The Bellevue
Fifth Floor
South Broad Street
Philadelphia, PA 19102
Richard W. Bryan
Jackson & Campbell
South Tower
One Lafayette Center
1120-20th Street, NW
Washington, DC 20036
Richard V. Eckert
5601 SW Barrington Court South
Topeka, Kansas 66614
Stacy S. Freel
Brand & Novak
135 South LaSalle Street
Suite 3700
Chicago, Illinois 60603
__________________________
Norma J. Dunnaway
Administrative Assistant
1. Certain Defendants include: International Insurance Co., as successor-in-interest to International Surplus Lines Insurance Co.; London Market Insurance Cos. and Certain Underwriters at Lloyds, London; Stonewall Insurance Co.; Employers Insurance of Wausau; Nationwide Insurance Co.; American Home Assurance Co.; Audobon Indemnity Co.; Granite State Ins. Co.; Insurance Company of the State of Pennsylvania; Landmark Ins. Co.; Lexington Ins. Co.; National Union Fire Insurance Company or Pittsburgh, PA; New Hampshire Insurance Co., Union Atlantique D'Assurrances, S.A. and Yasuda Fire and Marine Ins. Co.; First State Insurance Co.