Insured’s Decision to Manufacture A Dangerous Product Knowing No Insurance Is Available Doesn’t Sway Court To Create An Equitable Exception To The Unavailability Rule

The Supreme Court of New Jersey recently resolved an 18-year-old asbestos coverage row, encompassing 330 policies and thousands of claims. In reaching its decision in Cont’l Ins. Co. v. Honeywell Int’l, Inc., No. 078152, 2018 WL 3130638 (N.J. June 27, 2018), the court confirmed that lex loci contractus is dead in New Jersey for purposes of resolving choice of law issues in contract cases and declined to recognize an equitable exception to the “unavailability of insurance” allocation principle it had announced in its seminal Owen-Illinois decision even where an insured elects to manufacture a dangerous product fully aware that there is no insurance available in the marketplace to shield it from liability. By way of background, the Bendix Corporation, a corporate predecessor to Honeywell, manufactured and sold friction products that contained asbestos. Beginning around 1975, Bendix began to receive liability claims asserting that asbestos in its friction…

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