Five years ago, the New York Court of Appeals held in Appalachian Insurance Company v. General Electric Company, 8 N.Y.3d 162, 831 N.Y.S.2d 742 (2007) (“Appalachian”), that asbestos claims against a policyholder constituted thousands of separate occurrences under New York’s unfortunate-events test. The court recognized that different results might ensue in cases where the policy language supersedes the unfortunate-events test and provides for the grouping of multiple claims into a single occurrence. A recent decision by the New York Supreme Court, Appellate Division, First Department, ruled that New York law does not automatically equate every asbestos claim with a separate occurrence, but instead requires a fact sensitive inquiry that encompasses both the policy language and the underlying facts to determine how many occurrences such claims constitute.

Specifically, in Mt. McKinley Ins. Co. v. Corning Inc., No. 04398, slip op. (N.Y. App. Div. 1st Dep’t, June 7, 2012) (“Corning”) the New York Supreme Court, Appellate Division, First Department affirmed the denial of insurers’ motions seeking summary judgment that each asbestos claim for which their insured sought coverage was a separate occurrence. The Corning court recognized that New York law, under Appalachian,required it to examine the policy language closely to determine how it defined “occurrence” and whether it permitted the grouping of multiple claims into one occurrence. The policy language at issue in Corning provided that “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.” Id. at 52. Appalachian had identified this particular language as expressing the intent to permit the grouping of claims – in contrast to the language in the policies actually before it – and the Corning court agreed that the definition allowed certain claims to be combined for the purposes of counting occurrences.