Choice of Law Analysis: Delaware's "Continuous Trigger" Theory vs. Alabama's Reliance on the "Exposure Trigger" Theory
Shook & Fletcher Asbestos Settlement Trust v. Safety National Casualty Corp., 04C-02-087 MMJ, 2005 WL 2436193 (Del. Super. Ct. Sept. 29, 2005).
Plaintiff Shook & Fletcher Asbestos Settlement Trust, as Successor to Certain Assets and Liabilities of Shook & Fletcher Insulation Company ("Shook & Fletcher"), brought an action to establish coverage for asbestos bodily injury claims under three excess liability policies issued by Safety National Casualty Company, successor to Safety Mutual Casualty Corporation ("Safety"), for policy years 1983 through 1985. The parties moved for summary judgment on various issues, including the choice of law and what act "triggered" the insurance coverage. The court found that Alabama law governed the insurance policies. The Court also determined that a conflict between Delaware and Alabama law exists because Delaware has adopted the "continuous trigger" standard. Because the choice of law analysis favored Alabama, that state's "exposure trigger" standard governed.
Safety and Shook & Fletcher both moved for partial summary judgment on the choice of law issue and on the question of what "triggered" the policies. Applying the "most significant relationship" test, the Court found that Alabama law applied. The Court focused on the fact that Shook & Fletcher's principal place of business was in Alabama, the majority of its job sites were in Alabama, and Alabama based employees would have negotiated the contract. By comparison, neither the insured nor the insurer's principal place of business was in Delaware, the contract was not negotiated in Delaware, and the contract was not performed in Delaware. After determining that Alabama law applied, the Court turned to the question of the applicable "trigger." Delaware courts follow the "continuous trigger" approach, while Alabama courts follow the "exposure trigger" standard. Under the continuous trigger theory, all policies in effect from a claimant's date of first exposure to asbestos or asbestos-containing products to the time of the claimant's death are triggered. Under the exposure theory, the applicable insurance policies only apply to claims where the claimant was exposed to asbestos during the policy's term. Because there was a true conflict of law, the Court found that Alabama law would govern the trigger issue.