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CONNECTICUT INS. GUARANTY ASSN. v. UNION CARBIDE2/5/1991
The plaintiff, Connecticut Insurance Guaranty Association (CIGA), brought this declaratory judgment action for the purpose of resolving certain issues relating to its obligation pursuant to the Connecticut Insurance Guaranty Association Act, General Statutes 38-273 through 38-289, to reimburse the defendant Union Carbide Corporation (UCC) for claims arising out of a chemical plant disaster in Bhopal, India, which were covered by liability policies insuring UCC issued by insurance companies that have become insolvent. Cross motions for summary judgment were filed by CIGA and UCC and the trial court rendered a declaratory judgment in favor of UCC upon three of the five issues presented, concluding that two of the issues could not be decided on the basis of the record. The court ruled that: (1) the definition of a "covered claim" in General Statutes 38-275 (4), which CIGA is obligated
to pay, refers to the claim of each Bhopal victim and not the aggregate demand of UCC to be reimbursed for all the claims it has paid from noninsurance sources as a result of the insolvency of three of its insurers; (2) CIGA must reimburse UCC for paying all claims of the Bhopal victims covered by the policies of the insolvent carriers, because UCC "now stands in the shoes" of those companies, subject to the maximum of $300,000 for each victim's claim as provided by General Statutes 38-278 (1)(a) (ii); and (3) CIGA must also pay for UCC's costs of defense and settlement. The court deemed the record insufficient to render a declaratory judgment on the two remaining issues:
(1) how the deductible of $100 provided by 38-278 (1) (a) (ii) should be allocated to the claims for which UCC seeks reimbursement; and (2) what effect payments made by other insurance carriers in settlement of Bhopal claims should have pursuant to General Statutes 38-282 (1) in reducing the amount due UCC.
On appeal CIGA challenges the trial court's decision on the three issues resolved by the judgment and also seeks a ruling by this court upon the issues left undetermined. UCC has filed a cross appeal in which it seeks a remand directing the entry of judgment for the amount of its claim for reimbursement, $32,500,000 plus interest.
We affirm the judgment of the trial court on the first two issues ruled upon, vacate its declaration upon defense costs as premature, and remand the case for further proceedings with respect to the remaining issues. With respect to the cross appeal, we agree with the trial court that the relief sought by UCC would be inappropriate at this stage of the proceeding.
There is no dispute about the facts relied upon by the trial court in rendering judgment, which were taken largely from the affidavits filed in support of the motions for summary judgment. CIGA is a "nonprofit unincorporated legal entity" created by General Statutes 38-276 and composed of all insurers licensed to transact business in this state that write any kind of direct insurance, except for those specifically excluded
from the application of the Connecticut Insurance Guaranty Association Act by General Statutes 38-274. UCC is a corporation organized under the laws of New York but having its principal place of business in Danbury. It was the owner of 50.9 percent of the common stock of Union Carbide of India , Ltd., which owned a chemical plant in Bhopal, India.
During the night of December 2-3, 1984, a release of toxic gas from the Bhopal plant killed approximately 2300 residents in the area, injured more than 200,000 other people, and also resulted in extensive damage to livestock and crops. Over 500,000 claims were asserted in India against UCC, alleging that it was respon
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