Keyspan Gas East Corporation, Appellant,v.Munich Reinsurance America, Inc., Defendant, Century Indemnity Company et al., Respondents.BriefN.Y.February 6, 2018To be Argued by: JONATHAN D. HACKER (Pro Hac Vice) (Time Requested: 30 Minutes) APL-2016-00236 New York County Clerk’s Index No. 604715/97 Court of Appeals of the State of New York KEYSPAN GAS EAST CORPORATION, Plaintiff-Appellant, – against – MUNICH REINSURANCE AMERICA, INC., Defendant, – and – NORTHERN ASSURANCE COMPANY OF AMERICA and CENTURY INDEMNITY COMPANY, Defendants-Respondents. BRIEF FOR DEFENDANT-RESPONDENT CENTURY INDEMNITY COMPANY JOHN L. ALTIERI, JR. BOUTIN & ALTIERI, P.L.L.C. P.O. Box 630 Carmel, New York 10512 Tel.: (845) 306-7076 Fax: (603) 432-7419 JONATHAN ROSENBERG ANTON METLITSKY LEAH GODESKY O’MELVENY & MYERS LLP Times Square Tower Seven Times Square New York, New York 10036 Tel.: (212) 326-2000 Fax: (212) 326-2061 JONATHAN D. HACKER (Pro Hac Vice) O’MELVENY & MYERS LLP 1625 Eye Street, N.W. Washington, D.C. 20006 Tel.: (202) 383-5300 Fax: (202) 383-5414 Attorneys for Defendant-Respondent Century Indemnity Company April 20, 2017 i RULE 500.1(f) CORPORATE DISCLOSURE STATEMENT Century Indemnity Company is a wholly owned subsidiary of Brandywine Holdings Corporation, which is a wholly owned subsidiary of INA Financial Corporation. INA Financial Corporation is a wholly owned subsidiary of INA Corporation, which is a wholly owned subsidiary of Chubb INA Holdings, Inc. Chubb INA Holdings, Inc. is 80% owned by Chubb Group Holdings Inc. and 20% owned by Chubb Limited. Chubb Group Holdings, Inc. is a wholly owned subsidiary of Chubb Limited. Chubb Limited, the ultimate parent corporation, is publicly traded (NYSE: CB). Chubb Limited affiliates include: ACE Marketing Group C.A. ACE Property and Casualty Insurance Company ACE Reinsurance (Switzerland) Limited ACE Resseguradora S.A. ACE Seguradora S.A. ACE Seguradora S.A. (Brazil) ACE Seguros De Vida S.A. ACE Seguros S.A. ACE Seguros S.A. ACE Seguros S.A. ii ACE Servicios Regionales Limitada ACE Servicios S.A. ACE Servicios S.A. ACE Serviços para Seguradoras e Resseguradoras Ltda. ACE Tempest Re Escritorio De Representacao No Brasil Ltda. ACE Underwriting Agencies Limited AFIA AFIA (Chubb) Corporation Limited AFIA (INA) Corporation, Limited AFIA Finance Corp. Chile Limitada AFIA Finance Corporation AFIA Finance Corporation Agencia En Chile AFIA Venezolana, C.A. Agri General Insurance Company Agri General Insurance Service, Inc. Ally Insurance Holdings LLC American Lenders Facilities, Inc. Atlantic Employers Insurance Company Bankers Standard Insurance Company Bellemead Development Corporation iii Bellemead/Marina Del Rey Corp. Brandywine Holdings Corporation Century Indemnity Company Century International Reinsurance Company Ltd. Century Inversiones, S.A. Chiewchanwit Company Limited Chubb Insurance Company of Puerto Rico Chubb & Son Inc. Chubb (CIDR) Limited Chubb (CR) Holdings Chubb (RGB) Holdings Limited Chubb Alternative Risk Ltd. Chubb Alternative Risk Solutions Inc. Chubb Arabia Cooperative Insurance Company Chubb Argentina de Seguros S.A. Chubb Asia Pacific Pte. Ltd. Chubb Asset Management Inc. Chubb Atlantic Indemnity Ltd. Chubb Bermuda Insurance Ltd. Chubb Bermuda International Insurance Ireland Designated Activity Company iv Chubb Brazil Holdings Ltd. Chubb Canada Holdings Inc. Chubb Capital I Limited Chubb Capital II Limited Chubb Capital III Limited Chubb Capital IV Limited Chubb Capital Ltd. Chubb Capital V Limited Chubb Capital VI Limited Chubb Capital VII Limited Chubb Computer Services, Inc. Chubb Custom Insurance Company Chubb Custom Market Inc. Chubb de Chile Compania de Seguros Generales, S.A. Chubb de Mexico Compania Afianzadora, S.A. de C.V. Chubb de Mexico Compania de Seguros, S.A. de C.V. Chubb Direct Marketing Company Ltd. Chubb do Brasil Companhia de Seguros Chubb Europe Finance Ltd. Chubb Europe Services Ltd. v Chubb European Group Limited Chubb European Investment Holdings, SLP. Chubb Excess and Surplus Insurance Services Inc. Chubb Executive Risk Inc. Chubb Fianzas Holdings Inc. Chubb Financial Solutions (Bermuda) Ltd. Chubb Financial Solutions, Inc. Chubb Global Financial Services Corporation Chubb Group Holdings Inc. Chubb Group Holdings Limited Chubb Group Management and Holdings Ltd. Chubb Holdings Australia Pty Limited Chubb Holdings Canada Ltd. Chubb Holdings Limited Chubb INA Excess and Surplus Insurance Services, Inc. Chubb INA Financial Institution Solutions Inc. Chubb INA G.B. Holdings Ltd. Chubb INA Holdings Inc. Chubb INA International Holdings Ltd. Chubb INA Overseas Holdings Inc. vi Chubb INA Properties Inc. Chubb Indemnity Insurance Company Chubb Insurance Agency Inc. Chubb Insurance Australia Limited Chubb Insurance Company Limited Chubb Insurance Company of Australia Ltd. Chubb Insurance Company of Canada Chubb Insurance Company of Europe SE Chubb Insurance Company of New Jersey Chubb Insurance Hong Kong Limited Chubb Insurance Investment Holdings Ltd. Chubb Insurance Japan Chubb Insurance Malaysia Berhad Chubb Insurance New Zealand Limited Chubb Insurance Pakistan Limited Chubb Insurance S.A.-N.V. Chubb Insurance Service Company, Ltd. Chubb Insurance Singapore Limited Chubb Insurance Solutions Agency, Inc. Chubb Insurance South Africa Limited vii Chubb Insurance Vietnam Company Limited Chubb Intermediaries Bermuda Ltd. Chubb International Management Corporation Chubb Investment Holdings (Hong Kong) Ltd. Chubb Investment Holdings Inc. Chubb Investment Services Limited Chubb IT Development Centre Sdn. Bhd. Chubb Leadenhall Limited Chubb Life Assurance Public Company Limited Chubb Life Fund Management Company Limited Chubb Life Insurance Company Chubb Life Insurance Company Egypt SAE. Chubb Life Insurance Company Ltd. Chubb Life Insurance Company of Canada Chubb Life Insurance Korea Company Ltd. Chubb Life Insurance Vietnam Company Limited Chubb Limited Chubb Lloyds Insurance Company of Texas Chubb London Group Limited Chubb London Holdings Limited viii Chubb London Investments Limited Chubb London Limited Chubb London Services Limited Chubb Managing Agent Ltd. Chubb Market Company Limited Chubb Multinational Manager Inc. Chubb National Insurance Company Chubb Pension Trustee Limited Chubb Perú S.A. Compañia de Seguros y Reaseguros Chubb Re, Inc. Chubb Realty Holdings Limited Chubb Russia Investments Limited Chubb Samaggi Insurance Public Company Limited Chubb Seguros Panama S.A. Chubb Seguros Colombia SA Chubb Seguros Ecuador S.A. Chubb Seguros Holdings Chile Inc. Chubb Seguros Mexico Holdings Inc. Chubb Services Corporation Chubb Services Limited ix Chubb Servicios Panama S.A. Chubb SSI Japan Chubb Structured Products Inc. Chubb Tarquin Chubb Tempest Life Reinsurance Ltd. Chubb Tempest Re Canada Inc. Chubb Tempest Re USA LLC Chubb Tempest Reinsurance Ltd. Chubb Underwriting (DIFC) Limited Chubb Underwriting Agencies Limited Chubb US Holdings Inc. Combined Insurance Company of America Combined Insurance Company of Europe Limited Combined Life Insurance Company of Australia Limited Combined Life Insurance Company Of New York Conference Facilities, Inc. Corporate Officers & Directors Assurance Ltd. Cover Direct, Inc. CoverHound, Inc. Cravens, Dargan & Company, Pacific Coast x Delpanama S.A. DHC Corporation Eksupsiri Company Limited ESIS Academy PTE. Ltd. ESIS Asia Pacific PTE. Ltd. ESIS Canada Inc. ESIS Environmental Health And Safety Consulting (Shanghai) Company Limited ESIS, Inc. Executive Risk Indemnity Inc. Executive Risk Management Associates Executive Risk Specialty Insurance Company Federal Insurance Company Federal Insurance Company Escritorio de Representacao No Brasil Ltd. FM Holdco LLC Freisenbruch-Meyer Insurance Limited Freisenbruch-Meyer Insurance Services Ltd. Great Northern Insurance Company Green & Grey Financial Solutions International, Ltd. H.S. Life Small Amount & Short Term Insurance Co., Ltd. Halifax Plantation Golf Management, Inc. xi Halifax Plantation Golf, Inc. Halifax Plantation Realty, Inc. Halifax Plantation, Inc. Harbor Island Indemnity Ltd. Huatai Insurance Group Co., Ltd. Huatai Life Insurance Company, Limited Huatai Property & Casualty Insurance Co., Ltd. Illinois Union Insurance Company INA Corporation INA Financial Corporation INA Holdings Corporation INA International Holdings, LLC INA Tax Benefits Reporting, Inc. INACOMB S.A. De C.V. INAMAR Insurance Underwriting Agency, Inc. INAMAR Insurance Underwriting Agency, Inc. Of Texas INAMEX S.A. INAVEN, C.A. Indemnity Insurance Company of North America Insurance Company of North America xii Inversiones Continental, S.A. de C.V. LLC Chubb Insurance Company Majesco Masterpiece Netherlands B.V. MI Insurance Brokers Ltd. Nam Ek Company Limited NewMarkets Insurance Agency, Inc. Oasis Insurance Services Ltd. Oasis Investments 2 Ltd. Oasis Investments Limited Oasis Real Estate Company, Ltd. Operadora FMA, S.A. de C.V. Oriental Equity Holdings Limited Pacific Employers Insurance Company Pacific Indemnity Company Paget Reinsurance Ltd. Pembroke Reinsurance, Inc. Penn Millers Agency, Inc. Penn Millers Holding Corporation Penn Millers Insurance Company xiii PMMHC Corp. Proclaim America, Inc. PT Asuransi Chubb Indonesia PT Chubb General Insurance Indonesia PT Chubb Life Insurance Indonesia PT Jaya Prima Auto Center PT Jaya Proteksi Takaful PT. ADI Citra Mandiri Rain and Hail Financial, Inc. Rain and Hail Insurance Service de Mexico, S.A. de C.V. Rain and Hail Insurance Service International, Inc. Rain and Hail Insurance Service, Inc. Rain and Hail Insurance Service, Ltd. Rain and Hail L.L.C. Recovery Services International, Inc. Rhea International Marketing (L) Inc. Ridge Underwriting Agencies Limited RIYAD Insurance Company Ltd. Russian Reinsurance Company Scarborough Property Holdings Ltd. xiv Servicios ACE INA, S.A. de C.V. Siam Liberty Insurance Broker Co., Ltd. Siam Marketing & Analytics Company Limited Sovereign Risk Insurance (Dubai) Limited Sovereign Risk Insurance Ltd. Sullivan Kelly, Inc. Symmetry Private Insurance Limited Texas Pacific Indemnity Company Transit Air Services, Inc. Ventas Personales Limitada Vigilant Insurance Company Westchester Fire Insurance Company Westchester Specialty Insurance Services, Inc. Westchester Surplus Lines Insurance Company TABLE OF CONTENTS Page xv QUESTIONS PRESENTED ..................................................................................... 1 PRELIMINARY STATEMENT .............................................................................. 1 STATEMENT OF JURISDICTION......................................................................... 6 STATEMENT OF THE CASE ................................................................................. 6 A. KeySpan’s Claims And The Century Policies ..................................... 6 B. Trial And Appellate Court Proceedings ............................................... 8 ARGUMENT .......................................................................................................... 13 I. THE APPELLATE DIVISION CORRECTLY DECLINED TO APPLY AN INSURANCE-UNAVAILABILITY EXCEPTION TO PRO RATA ALLOCATION ........................................................................ 14 A. The Century Policies’ Language Precludes An Unavailability Exception To Pro Rata Allocation ..................................................... 14 1. The Century Policies’ Language, As Authoritatively Construed In Con Ed And Viking Pump, Does Not Permit Coverage For Damage Resulting From Occurrences Outside The Policies’ Coverage Period ................................................................................. 14 2. An Unavailability Exception Would Impermissibly Make Century Liable For Damage Resulting From Occurrences Outside The Policies’ Coverage Period ............................................. 19 3. The Vast Majority Of Courts Agree That An Unavailability Exception To Pro Rata Allocation Imposes On The Insurer Liability It Did Not Agree To Cover .................................................. 22 B. KeySpan’s Contrary Arguments Lack Merit ..................................... 24 1. The “Legal Fiction” Underlying Pro Rata Allocation Does Not Support, But Undermines, The Unavailability Exception .................. 24 2. KeySpan’s Text-Based Arguments Are Wrong ................................... 27 3. The Cases Cited By KeySpan Impermissibly Reject The Policy Text In Favor Of Irrelevant “Public Policy Factors” ....................... 30 C. The Unavailability Exception Is Contrary To Sound Public Policy .................................................................................................. 33 TABLE OF CONTENTS (continued) Page xvi 1. An Unavailability Exception Reduces The Incentives For Policyholders To Discover And Remediate Environmental Contamination .................................................................................... 33 2. The Unavailability Exception Inefficiently Transfers Risk, And Raises The Cost Of Insurance ............................................................ 35 3. An Unavailability Exception Would Generate Complicated And Costly Litigation ................................................................................. 37 II. CASES RECOGNIZING AN UNAVAILABILITY EXCEPTION FOR THE POST-COVERAGE PERIOD DO NOT APPLY HERE AND DO NOT JUSTIFY APPLYING AN EXCEPTION TO THE PRE-COVERAGE PERIOD ........................................................................ 39 III. KEYSPAN’S CONTENTION THAT ALL-SUMS ALLOCATION APPLIES HERE IS PROCEDURALLY BARRED AND MERITLESS ................................................................................................. 46 A. KeySpan’s All-Sums Argument Is Procedurally Barred ................... 46 B. KeySpan’s Argument That All-Sums Allocation Applies Under Its Policies Is Meritless ...................................................................... 54 CONCLUSION ....................................................................................................... 61 TABLE OF AUTHORITIES Page(s) xvii CASES 511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144 n.3 (2002) .................................................................................... 48 AAA Disposal Sys., Inc. v. Aetna Cas. & Sur. Co., 821 N.E.2d 1278 (Ill. App. Ct. 2005) ........................................................... 23, 32 Am. Home Prods. Corp. v. Liberty Mut. Ins. Co., 565 F. Supp. 1485 (S.D.N.Y. 1983) .................................................................... 36 Boston Gas Co v. Century Indem. Co., 910 N.E.2d 290 (Mass. 2009) ...................................................................... passim Bradford Oil Co. v. Stonington Ins. Co., 54 A.3d 983 (Vt. 2011) ........................................................................................ 23 Breed v. Ins. Co. of N. Am., 46 N.Y.2d 351 (1978) ............................................................................. 28, 33, 37 Chem. Leaman Tank Lines, Inc. v. Aetna Cas. & Sur. Co., 177 F.3d 210 (3d Cir. 1999) ................................................................................ 32 Consolidated Edison Co. of New York, Inc. v. Allstate Ins. Co., 98 N.Y.2d 208 (2002) .................................................................................. passim Cont’l Cas. Co. v. BorgWarner Inc., 2005 WL 6955478 (Ill. Cir. Ct. Aug. 15, 2005) .................................................. 32 Continental Cas. Co. v. Indian Head Indus., Inc., 666 F. App’x 456 (6th Cir. 2016) ........................................................................ 32 Crossman Comtys. of N.C., Inc. v. Harleysville Mut. Ins. Co., 717 S.E.2d 589 (S.C. 2011) .............................................................. 20, 23, 25, 26 Decker Mfg. Corp. v. Travelers Indem. Co., 106 F. Supp. 3d 892 (W.D. Mich. 2015) ............................................................. 32 Doerr v. Goldsmith, 25 N.Y.3d 1114 (2015) ........................................................................................ 22 EnergyNorth Nat. Gas Ins, Inc. v. Certain Underwriters at Lloyd’s, 934 A.2d 517 (N.H. 2007) ................................................................................... 32 TABLE OF AUTHORITIES (continued) Page(s) xviii Finest Invs. v. Sec. Tr. Co. of Rochester, 96 A.D.2d 227 (4th Dep’t 1983) .......................................................................... 59 Foley v. Roche, 86 A.D.2d 887 (2d Dep’t 1982) ........................................................................... 51 Fulton Boiler Works, Inc. v. Am. Motorists Ins. Co., 828 F. Supp. 2d 481 (N.D.N.Y. 2011) ................................................................. 31 Gen. Elec. Co. v. Lines, 2010 WL 2486721 (Mass. Super. Ct. Mar. 16, 2010) .................................. 32, 45 Goulds Pumps, Inc. v. Travelers Cas. & Sur. Co., 2016 WL 3564244 (Cal. Ct. App. Jun 22, 2016) ................................................. 31 Haverstraw Park v. Runcible Props. Corp., 33 N.Y.2d 637 (1973) .......................................................................................... 48 Hecht v. City of N.Y., 60 N.Y.2d 57 (1983) ............................................................................................ 48 In re OnBank & Trust Co., 90 N.Y.2d 725 (1997) .......................................................................................... 52 In re Viking Pump, Inc., 27 N.Y. 3d 244 (2016) ................................................................................. passim J.H. Fr. Refractories Co. v. Allstate Ins. Co., 626 A.2d 502 (Pa. 1993) ...................................................................................... 59 Liberty Mut. Ins. Co. v. Fairbanks Co., 170 F. Supp. 3d 634 (S.D.N.Y. 2016) ................................................................. 32 Mayor & City Council of Balt. v. Utica Mut. Ins. Co., 802 A.2d 1070 (Md. Ct. Spec. App. 2002) .......................................................... 31 Midamerican Energy Co. v. Certain Underwriters at Lloyd’s London, 2011 WL 2011374 (Iowa Distr. Ct. Apr. 13, 2011) ............................................ 24 Mt. McKinley Ins. Co. v. Corning Inc., 2012 N.Y. Misc. LEXIS 6531 (Sup. Ct., N.Y. Cnty. Sept. 7, 2012) ................... 53 Nomet Mgmt. Corp. v. Va. Sur. Co., 2012 WL 10007753 (Sup. Ct., N.Y. Cnty. Apr. 2, 2012) ................................... 32 TABLE OF AUTHORITIES (continued) Page(s) xix Olin Corp. v. Ins. Co. of N. Am., 221 F.3d 307 (2d Cir. 2000) ........................................................................ passim Owens-Illinois, Inc. v. United Ins. Co., 650 A.2d 974 (N.J. 1994) ................................................................. 11, 30, 40, 41 P. Ballantine & Sons v. Pub. Serv. Corp. of N.J., 91 A. 95 (N.J. 1914) ............................................................................................ 44 Parochial Bus Sys., Inc. v. Bd. of Educ. of the City of N.Y., 60 N.Y.2d 539 (1983) .......................................................................................... 48 Patrician Plastic Corp. v. Bernadel Realty Corp., 25 N.Y.2d 599 (1970) .......................................................................................... 47 People v. Andrades, 4 N.Y.3d 355 (2005) ............................................................................................ 22 Pneumo Abex Corp. v. Md. Cas. Co., 2001 WL 37111434 (D.D.C. Oct. 9, 2001) ......................................................... 31 R.T. Vanderbilt Co., Inc. v. Hartford Accident & Indem. Co., 171 Conn. App. 61 (2017) ................................................................ 31, 39, 40, 43 Roman Catholic Diocese of Brooklyn v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA., 21 N.Y.3d 139 (2013) ............................................................... 16 Sec. Ins. Co. of Hartford v. Lumbermans Mut. Cas. Co., 826 A.2d 107 (Conn. 2003) ................................................................................. 32 Slamow v. Delcol, 79 N.Y.2d 1016 (1992) ........................................................................................ 29 Soto v. State Farm Ins. Co., 83 N.Y.2d 718 (1994) .......................................................................................... 34 Spartan Petroleum Co. v. Federated Mut. Ins. Co., 162 F.3d 805 (4th Cir. 1998) ............................................................................... 23 Spaulding Composites Co. v. Aetna Cas. & Sur. Co., 819 A.2d 410 (N.J. 2003) .................................................................................... 31 State v. Green, 96 N.Y.2d 403 (2001) .......................................................................................... 22 TABLE OF AUTHORITIES (continued) Page(s) xx Stonewall Ins. Co. v. Asbestos Claims Mgmt. Corp., 73 F.3d 1178 (2d Cir. 1995) ......................................................................... 10, 39 Sybron Transition Corp. v. Sec. Ins. of Hartford, 258 F.3d 595 (7th Cir. 2001) ....................................................................... passim Travelers Indem. Co. v. Fischbach, LLC, 2011 WL 1495196 (Sup. Ct., N.Y. Cnty. Apr. 8, 2011)...................................... 32 U.S. Fid. & Guar. Co. v. Cont’l Ins. Co., 2010 WL 4102250 (D. Mont. Oct. 18, 2010) ...................................................... 32 Uniroyal, Inc. v. Am. Re-insurance, Co., 2005 WL 4934215 n.5 (N.J. Super Ct. App. Div. Sept. 13, 2005) ...................... 31 USF&G v. Maggiore, 299 A.D.2d 341 (2d Dep’t 2002) ......................................................................... 35 Viking Pump, Inc. v. Century Indem. Co., 2 A.3d 76 (Del. Ch. 2009) ................................................................................... 53 Wooddale Builders, Inc. v. Md. Cas. Co., 722 N.W.2d 283 (Minn. 2006) ............................................................................ 31 CONSTITUTIONAL PROVISIONS N.Y. Const. art. VI, § 3(b)(4) ................................................................................... 47 STATUTES AND RULES 1922 N.Y. Laws 661 ................................................................................................ 43 CPLR § 5513(a) ................................................................................................ 48, 51 CPLR § 5602 ............................................................................................................ 47 CPLR § 5004 ............................................................................................................ 34 OTHER AUTHORITIES 3-22 New Appleman on Insurance Law Library Edition § 22.03[2] ................ 19, 25 Arthur Karger, Powers of the NY Court of Appeals § 17.2 ..................................... 50 Developments in the Law—Toxic Waste Litigation, 99 Harv. L. Rev. 1573 (1986) .......................................................................................................... 36 TABLE OF AUTHORITIES (continued) Page(s) xxi Insurance Law § 70, Annual Report of the Att’y Gen. 90 (transmitted Jan. 2, 1894) ......................................................................................................... 43 Jan M. Michaels et. al., The Avoidable Evils of “All Sums” Liability for Long-Tail Insurance Coverage Claims, 64 U. Kan. L. Rev. 467 (2015) ................................................................................................................... 26 Michael G. Doherty, Allocating Progressive Injury Liability Among Successive Insurance Policies, 64 U. Chi. L. Rev. 257 (1997) .................... 33, 36 Scott M. Seaman & Jason R. Schulze, Allocation of Losses in Complex Insurance Coverage Claims § 4:3[c][1] .................................. 22, 27, 45 T.H. Prendergaast & F.A. McKenry, Am. Gas Ass’n, Insurance Committee Report 6 (1933) .................................................................................. 44 1 QUESTIONS PRESENTED 1. Whether the Appellate Division correctly held that when an insurance policy’s plain language provides coverage for damage arising from occurrences that happened “during the policy period,” the insurer cannot be made to provide coverage for damage from occurrences that happened during years outside its policy period, merely because other insurance was “unavailable” to the policyholder during those years. 2. Whether appellant’s contention that “all sums” allocation applies, rather than pro rata allocation—a contention not presented to or addressed by the Appellate Division—is properly before this Court, and if so, whether all-sums allocation is required by the policies’ “Other Insurance” clauses. PRELIMINARY STATEMENT This appeal involves liability coverage under several insurance policies issued by Century Indemnity Company (“Century”) for environmental damage caused by two manufactured gas plant (“MGP”) sites owned by KeySpan Gas East Corporation’s (“KeySpan”)1 corporate predecessors. That environmental damage began in the late nineteenth or early twentieth century and continued to the present 1 KeySpan is the corporate successor to the Long Island Lighting Company (“LILCO”), the original plaintiff in this case. LILCO and its corporate predecessors owned the MGP sites for which KeySpan seeks coverage. This brief’s references to “KeySpan” include all of KeySpan’s predecessors. 2 (for the Rockaway Park site) or the recent past (for the Hempstead site). KeySpan, however, obtained insurance coverage from Century only for the years 1953-1969, and the policies it obtained covered only accidents or occurrences that happened “during the policy period.” In Consolidated Edison Co. of New York, Inc. v. Allstate Insurance Co., 98 N.Y.2d 208 (2002) (“Con Ed”), this Court construed nearly identical policy language in a similar progressive environmental contamination case. That language, the Court held, “provide[s] indemnification for liability incurred as a result of an accident or occurrence during the policy period, not outside that period.” Id. at 224 (emphasis added). The Court accordingly rejected the policyholder’s attempt to make an insurer liable for the entire period that damage was occurring, including during years outside the insurer’s own policy period. Id. at 224-25. The Court instead held that liability should be divided and allocated to the insurer on a “pro rata” basis. Under pro rata allocation, continuous damage is assumed (absent contrary evidence) to occur consistently and evenly throughout the total period of damage, and the insurer is held responsible only for the proportion of damage ratably allocated to the years covered by its policies. The trial court in this case agreed—and KeySpan affirmatively acknowledged—that damages should be allocated pro rata, and that KeySpan itself therefore is generally responsible for damages that occurred in years when 3 KeySpan operated without insurance. But the trial court carved out a significant exception to that rule: if KeySpan lacked coverage in certain years because insurance was “unavailable,” Century is responsible for those damages, rather than KeySpan. And according to KeySpan, insurance was unavailable from the start of property damage at each site until 1933, and again from 1986 to the present. Accordingly, under the trial court’s “unavailability exception,” Century became responsible for more than seventy years of coverage outside its policy periods. Century even became liable for damage that occurred in years when it was illegal for Century to sell property-damage insurance to KeySpan and when KeySpan was actively polluting knowing it lacked coverage. That position is indefensible, as the Appellate Division recognized. It cannot be reconciled with the plain-policy-language approach applied in Con Ed and reaffirmed recently in In re Viking Pump, Inc., 27 N.Y. 3d 244 (2016). KeySpan’s approach would effectively rewrite its policy language to add the italicized phrasing: “during the policy period and any other period when insurance was or will become unavailable.” But Century never agreed to that language and would have needed to charge a much higher premium for decades of extra-policy-period coverage. As the Seventh Circuit has explained in applying New York law, imposing an unavailability exception on pro rata allocation is “the economic equivalent of requiring [the insurer] to furnish free coverage during” the 4 “unavailability” period. Sybron Transition Corp. v. Sec. Ins. of Hartford, 258 F.3d 595, 600 (7th Cir. 2001). KeySpan’s approach also contravenes the established rule precluding courts from creating extracontractual coverage based on notions of equity. Judicially created, unbargained-for coverage (i) increases the cost of insurance, (ii) creates unnecessary confusion and complexity in coverage litigation, and (iii) decreases incentives for policyholders to discover and limit latent property damage. For those reasons, the majority of courts that have considered the question have rejected any unavailability exception to pro rata allocation. And the minority applying that exception have made no effort to reconcile it with either the principles underlying pro rata allocation or the policy language on which that approach is based. This Court should reject the unavailability exception and enforce policy language limiting coverage to damage occurring “during the policy period,” as Con Ed and Viking require. Even if the Court were to conclude that certain years of insurance “unavailability” could in some circumstances be excluded from the allocation period for equitable reasons, that justification cannot possibly apply to the “pre- coverage period”—i.e., before the first year coverage became available, when companies like KeySpan were operating with full knowledge that they lacked insurance to protect themselves from third-party property damage caused by their 5 operations. Other than one unexplained Massachusetts trial court opinion, no case in any jurisdiction has excluded from pro rata allocation years during which the policyholder chose to pollute despite its lack of insurance. KeySpan instead relies on cases that apply an unavailability exception to later years of coverage because insurers allegedly withdrew from the market coverage that already existed. These cases almost all involve personal-injury coverage for latent asbestos-related injuries, where courts presume that companies reasonably expected insurance coverage for the injuries because they actually did have personal-injury coverage when they were selling or using asbestos-laden products. That principle does not justify overriding the plain policy language in any case, but even on its own terms, it has no application to companies operating in the late-eighteenth and early-twentieth century before property-damage liability coverage ever became available—indeed, before it was even lawful to sell such insurance in New York. Those companies could not possibly have expected insurance coverage for environmental harms caused by their uninsured operations. And even after New York finally legalized the sale of property-damage liability insurance in 1923, KeySpan still elected not to purchase such coverage until decades later, long after a market developed—indicating that if insurance remained “unavailable” for some period of time after it became lawful, it was only because demand for this new form of coverage was emerging slowly at best. In short, 6 contrary to the premise underlying recognition of an unavailability exception in the post-coverage period, there is no evidence that insurers in the pre-coverage period collectively decided to withhold third-party property damage coverage that companies had come to expect. Finally, the Court should not entertain KeySpan’s newly raised contention that Century’s policies require “all sums” allocation rather than pro rata allocation. This Court lacks jurisdiction to consider that issue because it was not addressed or even considered by the Appellate Division. KeySpan failed to raise the issue before that court, and indeed affirmatively and repeatedly waived any objection to pro rata allocation in both trial and appellate proceedings below. The argument for all sums allocation is also demonstrably wrong—it cannot be reconciled with policy language definitively construed in Con Ed and Viking Pump. The Appellate Division’s judgment should be affirmed. STATEMENT OF JURISDICTION The Court has subject matter jurisdiction over the first question presented under CPLR § 5602(b)(1). This Court lacks jurisdiction to consider the second question presented. See infra Part III. STATEMENT OF THE CASE A. KeySpan’s Claims And The Century Policies 1. The coverage period for the Century policies at issue spanned 16 years, from 1953 through 1969. A-643. As with the policies in Con Ed, each of the 7 Century policies expressly limits coverage to property damage resulting from “accidents” or “occurrences” that happen “during the policy period.” A-653-54. It is undisputed that the property damage here was “continuous over a long period of time that greatly exceeded the 16-year period,” A-640—while KeySpan has disputed precisely when property damage began at each site, gas production at Hempstead commenced in 1903 and at Rockaway Park in 1880, A-136, A-139-40, and KeySpan has argued that property damage at both sites continued into the twenty-first century, A-122, A-126. It is also “undisputed” that on the existing record “the parties cannot parse out the exact amount of property damage which occurred within each policy period.” A-16. 2. In In re Viking Pump, Inc., 27 N.Y. 3d 244 (2016), this Court held that unlike in Con Ed, policies that include certain specific “non-cumulation” provisions—also known as “anti-stacking” provisions—require liability to be allocated on a joint-and-several or “all sums” basis. Id. at 260-64. Under all-sums allocation, the policyholder can select any triggered policy and hold that policy liable for all damage, for the entire period, up to the policy’s limit. As the Appellate Division recognized, the Century policies do not contain the non- cumulation provisions “that were at issue in Viking Pump.” A-654. 3. The Century policies do contain a different type of provision, labeled “Other Insurance.” The language of these “Other Insurance” provisions differs 8 somewhat between policies, but they are all in substance identical to Other Insurance provisions in the 1961-1967 Century policies, which provide that (i) the policies are in excess of other insurance issued by other carriers “covering a loss also covered hereunder (except insurance purchased to apply in excess of the sum of the retained limit and the limit of liability hereunder),” and (ii) if other insurance issued by Century “cover[ed] a loss also covered hereunder (other than underlying insurance of which the insurance afforded by this policy is in excess),” then Century could be liable only up to the highest limit of any Century policy. A-281- 82 (emphasis added).2 B. Trial And Appellate Court Proceedings 1. In 2003, after this Court’s Con Ed decision, KeySpan moved for partial summary judgment, contending that the Century policies were distinguishable from the Con Ed policies, in part based on the Other Insurance provisions just described, and that the policies here required all-sums allocation. RA-49-53. The trial court denied the motion in 2003, holding that Con Ed controlled the construction of the Century policies’ language. A-233-34. KeySpan did not appeal that decision. 2 The 1953-1961 policies differ from the subsequent policies as to the latter provision in requiring the insured to “elect which [Century] policy to apply,” rather than simply applying the policy with the highest limit. E.g., A-255. The difference has no bearing on the issues in this appeal. 9 2. a. In 2014, now before a different trial judge, Century moved for partial summary judgment as to the Rockaway Park and Hempstead sites, seeking a judgment that it is not responsible for any portion of the property damage at those sites that occurred outside Century’s policy periods—i.e., that damages should be allocated pro rata across the entire period of property damage at each site. At oral argument on that motion, KeySpan’s counsel explained that “I don’t want the record to seem as if I was arguing that we seek joint-and-several [i.e., all- sums] solution, we put all the liability on the single policy here. There’s complete agreement that Con Ed rejected that.” A-39. The trial court made clear its view that it was “not bound by anything” the prior trial judge had decided, A-44, yet KeySpan affirmed its position that “you can’t put all the liability in a single policy,” A-38, and labeled the “all sums” approach as an “extreme alternative” rejected by Con Ed, A-68. b. Unsurprisingly, the trial court reaffirmed that “[w]here an injury such as environmental damage occurs over a number of years and triggers multiple sequential insurers and policies, courts have determined damages based upon pro rata allocation.” A-13. The court recognized that “[f]or years where an insured has no insurance coverage, the insured generally bears its own pro rata share of the loss,” since, “[f]or those years, the insured is treated as self-insured and bears responsibility for its pro rata share of damages.” A-14. 10 But the trial court also adopted an unavailability exception that gave KeySpan free coverage for liability it would otherwise retain under pro rata allocation. The court held that “[p]roration to the insured is inappropriate … for those years where insurance was unavailable in the marketplace,” id., relying on the Second Circuit’s pre-Con Ed decisions in Stonewall Insurance Co. v. Asbestos Claims Management Corp., 73 F.3d 1178, 1203 (2d Cir. 1995), and Olin Corp. v. Insurance Co. of North America, 221 F.3d 307, 325 (2d Cir. 2000). Thus, “[f]or those periods where Keyspan did not purchase insurance when it was available in the marketplace,” the trial court held that “Keyspan will be allocated its pro rata share accordingly.” A-19. The court recognized one exception to the unavailability exception from pro rata allocation: it concluded “that the period between 1971 and 1982 must be included in the denominator of the pro rata time on the risk allocation for the Hempstead and Rockaway Park sites, even though no insurance coverage was available to Keyspan and its predecessors during that time period.” A-17. During that period, the court explained, New York law required a pollution exclusion in all liability policies. Id. Citing “the Legislature’s clear intent that companies such as Keyspan bear the full burden of their own actions affecting the environment,” the 11 court “decline[d] to exclude the period between 1971 and 1982 from the allocation period when pollution insurance was prohibited.” A-18.3 3. Century appealed the court’s ruling that pro rata allocation would be subject to an unavailability exception. KeySpan, by contrast, elected not to appeal the court’s threshold ruling that pro rata allocation applied. To the contrary, KeySpan affirmatively argued on appeal that pro rata allocation was “consistent with and properly applies Century’s policy language.” RA-46 (capitalization altered). The Appellate Division agreed with both parties that pro rata allocation applies, noting that the trial court’s adoption of “a pro rata time on the risk allocation formula” is “not challenged on appeal.” A-644. As to the sole issue actually on appeal—the trial court’s adoption of an unavailability exception to pro rata allocation—the Appellate Division agreed with Century and reversed. The court rejected a short line of decisions with its “genesis” in Owens-Illinois, Inc. v. United Insurance Co., 650 A.2d 974 (N.J. 1994)—a New Jersey case later followed by the Second Circuit in Stonewall and Olin—because they disregarded the “language of the policies” and imposed an unavailability exception based entirely on their view of “public interest factors.” 3 The trial court also held that Century bears the burden of proving when insurance was available, A-19, and subsequently held that this question would be resolved by the jury rather than the court, see infra at 37. 12 A-650. As the Appellate Division explained, many other courts had found that approach to be inconsistent with the policy language, which obviously “did not provide coverage for the disputed periods” when no coverage was available. A- 652. Imposing liability on an insurer for such periods, the court observed, would “provide free insurance coverage to the policyholder[].” Id. The Appellate Division held that an unavailability exception could not be reconciled with New York law’s emphasis on enforcing policies as written. This Court’s decisions in Con Ed and Viking Pump, the court explained, together “make it abundantly clear that the predominant consideration in the Court’s analysis of [allocation] is the language of the particular insurance policy.” A-645. Like the policies in Con Ed, the court observed, the policies here cover only occurrences “that result in damage ‘during the policy period.’” A-654-55. And that language precludes an unavailability exception that would allocate to the insurer responsibility for periods outside the policy period, because that approach obviously would be “inconsistent with policy language restricting coverage to the policy period.” A-655. The court declined KeySpan’s invitation to override the plain policy language based on “policy” considerations, because “New York courts … will not rewrite the terms of a policy for equitable reasons.” A-656. And in any event, policy considerations would not support an unavailability exception, the court concluded, because an unavailability exception would subject insurers to 13 “risks beyond those contemplated by the parties when the policies were purchased.” A-655. 4. KeySpan moved for reargument or, in the alternative, leave to appeal to this Court, mainly reiterating its arguments for a non-textual unavailability exception to pro rata allocation. As a secondary argument, however, KeySpan also inserted the new contention that the pro rata allocation itself is improper under the Century policies’ “Other Insurance” provisions. The Appellate Division granted the motion for leave to appeal, certifying the question whether its decision was “properly made.” RA-106. ARGUMENT The Appellate Division correctly held that nothing in Century’s policies or New York law justifies holding Century liable for damage caused by KeySpan during years, outside the Century policy period, when KeySpan lacked insurance because coverage was unavailable. KeySpan relies almost entirely on decisions that reject New York’s policy-language-focused approach. Even on their own terms, those decisions provide no basis for imposing on Century liability for damage caused during the pre-coverage period when KeySpan was actively polluting, particularly given that (a) New York law affirmatively prohibited the purchase and sale of standalone property liability coverage, and (b) KeySpan itself chose to self-insure for many years even after coverage became lawful and a 14 coverage market had formed. KeySpan fares no better with its secondary argument that pro rata allocation does not apply at all: that argument has been waived in every way an argument can be waived, and is wrong in any event. I. THE APPELLATE DIVISION CORRECTLY DECLINED TO APPLY AN INSURANCE-UNAVAILABILITY EXCEPTION TO PRO RATA ALLOCATION A. The Century Policies’ Language Precludes An Unavailability Exception To Pro Rata Allocation This Court in Con Ed and Viking Pump held that when insurance policies, like Century’s, cover damage only from occurrences that happen during the policy period, the insurer cannot be held liable for any damage resulting from occurrences that happen before or after the policy period. Viking Pump, 27 N.Y.3d 259-62; Con Ed., 98 N.Y.2d at 224. That controlling construction cannot be reconciled with an insurance-unavailability exception, the whole point of which is to make the insurer liable for occurrences that happen before or after its policy period. 1. The Century Policies’ Language, As Authoritatively Construed In Con Ed And Viking Pump, Does Not Permit Coverage For Damage Resulting From Occurrences Outside The Policies’ Coverage Period a. Con Ed establishes the basic proposition that absent explicit language to the contrary, an insurance policy that limits coverage to damage from the occurrences “during policy period” does not permit the insurer to be held liable for any damage resulting from occurrences that happen before or after the period. The underlying dispute in Con Ed was an MGP environmental-coverage action 15 essentially identical to the dispute here. As in the summary judgment record here, supra at 7, it was “impossible to determine the extent of the property damage that is the result of an occurrence in a particular policy period.” Con Ed., 98 N.Y.2d at 224. The policies at issue in Con Ed indemnified the policyholder for damage that “resulted from an accident or occurrence ‘during the policy period.’” Id. (emphasis in original). The question was how to apply that provision where “an alleged continuous harm spans many years and thus implicates several successive insurance policies.” Id. at 221. The policyholder sought to collect its “total liability” from any one policy “in effect during the 50 years that the property damage occurred, up to that policy’s limit”—the “joint and several” or “all sums” approach to allocation. Id. at 222. This Court rejected that approach as “inconsistent with the unambiguous language of the policies,” because they only authorized “indemnification for ‘all sums’ of liability that resulted from an accident or occurrence ‘during the policy period.’” Id. at 224. It is true, as KeySpan observes (Br. 22), that the Con Ed policies did not “explicitly mandate” a particular method for allocating liability for long-tail harms such as gradual environmental contamination. 98 N.Y.2d at 224. What matters, however, is that pro rata allocation was required despite the lack of an explicit allocation provision, precisely because only pro rata allocation was “consistent with the language of the policies,” since it properly “limits” the “insurer’s liability” 16 to losses incurred by the insured “‘during the policy period.’” Id. at 222-23. All- sums allocation, by contrast, would make the insurer responsible for occurrences and losses in other years and thus “would read this important qualification out of the policies.” Id. at 224; see Roman Catholic Diocese of Brooklyn v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA., 21 N.Y.3d 139, 154 (2013) (construing policy providing coverage for “bodily injury [that] ‘occurs during the policy period’ and is caused by an ‘occurrence,’” and concluding that, “[p]lainly, the policy’s coverage is limited only to injury that occurs within the finite one-year coverage period of the policy”). It is also true that Con Ed on its facts involved “pro rata allocation among insurers,” 98 N.Y.2d at 225, whereas this case involves allocation between the insurer and policyholder. KeySpan Br. 24. The distinction matters not. Con Ed’s legal analysis focuses entirely on the “unambiguous” policy language limiting coverage to occurrences “during the policy period.” 98 N.Y.2d at 224. Nothing about that unambiguous language, or Con Ed’s reading of it, depends on whether or not the insured obtained (or could obtain) other coverage for losses incurred during other periods. b. This Court’s recent decision in Viking Pump reinforces the controlling significance of policy language. The Court in that case focused specifically on language contemplating policy coverage for damage from occurrences outside the 17 policy period. 27 N.Y.3d at 259-62. When a policy includes such language, the Viking Pump Court explained, all-sums allocation is appropriate, because the policy is not temporally limited to coverage for occurrences within its own policy period. Id. The Viking Pump Court reaffirmed the critical premise of Con Ed that under New York law, “the contract language controls the question of allocation,” not “policy concerns.” Id. at 257. Absent specific policy language extending coverage outside the policy period, Viking Pump explains, Con Ed’s text-based rule applies—the “insurer’s liability is limited to sums incurred by the insured during the policy period,” meaning that “each insurance policy is allocated a ‘pro rata’ share of the total loss representing the portion of the loss that occurred during the policy period.” Id. at 256. c. The Century policies here are materially indistinguishable from the policies at issue in Con Ed, as has been the law of this case since 2003, A-233-34, and as the Appellate Division correctly reaffirmed, A-654. KeySpan inexplicably emphasizes that six of the Century policies limit coverage to damages resulting from “occurrences” that happen “during the policy period,” A-653, rather than limiting coverage only to “damage” that occurred during the policy period. KeySpan Br. 7 n.4, 26. That difference exists, but if anything it favors Century, not KeySpan, because the language of those six policies is exactly identical to the language of the policies this Court highlighted in Con Ed, which limited coverage 18 to damage that “resulted from an accident or occurrence ‘during the policy period.’” Con Ed, 98 N.Y.2d at 224 (emphasis omitted); see id. at 222 (quoting policy as providing that “[t]his policy applies only to ‘occurrences’ … happening during the policy period” (emphasis in original)).4 KeySpan also observes that several policies provide that all “damages” from continuous or repeated exposure to conditions “shall be considered as arising out of one occurrence.” KeySpan Br. 26. This, too, was true of the Con Ed policies. 98 N.Y.2d at 222. As the Massachusetts Supreme Judicial Court has explained, these provisions “do not expand coverage for damages occurring outside the policy period,” but instead “govern only the number of occurrences” in any one policy period “for purposes of determining the limit of Century’s liability” in each period. Boston Gas Co v. Century Indem. Co., 910 N.E.2d 290, 308 (Mass. 2009). For that reason, the presence of the “continuous exposure” provision in the Con Ed policies could not and did not affect this Court’s conclusion, reaffirmed in Viking Pump: 4 As KeySpan admits (Br. 26), two of the Century policies contain an even more emphatic “policy period” limitation—they limit coverage only to property damage that happened “during the policy period.” A-319, A-322, A-337, A-340 (Policy Nos. XBC-41176 and SRL-2220). Under those policies, even if KeySpan could prove that all the property damage at issue resulted from one occurrence within the policy period, Century would be responsible only for the proportion of the damage that occurred within the policy period. But here, all agree that, as in Con Ed, the summary judgment record contains no such proof, so the Con Ed rule applies. 19 an insurer cannot be made liable for damage from occurrences outside its policy period unless there is policy language specifically extending coverage beyond the policy period. Because there is no such language here, pro rata allocation applies, see infra Part III, and an unavailability exception is precluded for the same reason, as the next section shows. 2. An Unavailability Exception Would Impermissibly Make Century Liable For Damage Resulting From Occurrences Outside The Policies’ Coverage Period An unavailability exception to pro rata allocation is contrary to the foundational textual premise of pro rata allocation itself, viz., that Century cannot be held liable for damage resulting from occurrences outside the period covered by the Century policies. Under a pro rata regime, unless there is evidence of the actual amount of damage that took place in each policy period, “courts generally consider the entire time period in which the continuous loss or damage occurred, and then spread the entire value of that loss equally among all of the relevant years.” 3-22 New Appleman on Insurance Law Library Edition § 22.03[2] (citing Con Ed); see Con Ed, 98 N.Y.2d at 224 (allocating to each coverage period an amount of damage “based on the amount of time the policy was in effect in comparison to the overall duration of the damage” (emphasis added)). In other words, the court assumes (absent contrary evidence) that “the damage occurred in equal portions during each 20 year that it progressed,” Crossman Comtys. of N.C., Inc. v. Harleysville Mut. Ins. Co., 717 S.E.2d 589, 602 (S.C. 2011), and then holds each applicable policy liable for the portion of damage allocated to its coverage period. An unavailability exception, however, would by design allocate to each policy more than its pro rata share of liability, thereby making each insurer liable for damage that occurs outside the policy period. That result is “inconsistent with the unambiguous language of the policies.” Con Ed, 98 N.Y.2d at 224. A simple example demonstrates the point. Assume damage resulting in $10 million in liability occurred over a period of 10 years, two of which were covered by one insurer’s policies. The pro rata methodology assumes that the occurrences and resulting damage were spread evenly over the full period—i.e., $1 million in each of the ten years of damage. Consequently, $2 million in liability is allocated to the two policy years, and the insurer must indemnify for that liability up to its applicable policy limits. It follows that regardless of what happened in the other 8 years of damage— whether there were other insurers on the risk, the policyholder decided to self- insure, the policyholder bought too little coverage, or insurance was unavailable— the insurer cannot be held liable for more than $2 million in damages, because only that amount is presumed to have occurred during its two-year coverage period. 21 The other $8 million of damage is presumed to have occurred during the 8 years that the insurer simply did not provide coverage. An unavailability exception to pro rata allocation cannot be reconciled with that analysis, as a minor alteration to the foregoing hypothetical demonstrates. Suppose that during the remaining 8 years of property damage not covered by insurance policies, insurance was unavailable. The unavailability exception would exclude those 8 years from the actual period of damage, thereby leaving the insurer responsible for the full $10 million. Under KeySpan’s approach, in other words, the insurer would be forced to foot the bill for damages from occurrences that happened outside the policy period, directly contrary to Con Ed’s holding. To shift from hypothetical to reality, an unavailability exception would make Century responsible for damage not only from 1953 to 1969, when Century actually agreed to cover KeySpan’s losses, but (i) for the several decades of property damage from when the MGP sites opened until 1933, when KeySpan says insurance first became available, and (ii) from 1986 until the end of property damage in the twenty-first century, when KeySpan contends coverage became unavailable. A-643. Century’s policy language, as construed in Con Ed and Viking Pump, clearly precludes that result.5 5 It is obviously beside the point (KeySpan Br. 11) that the Con Ed Court itself declined to address the question—not explicitly presented in the case—of 22 3. The Vast Majority Of Courts Agree That An Unavailability Exception To Pro Rata Allocation Imposes On The Insurer Liability It Did Not Agree To Cover The “vast majority” of appellate courts have rejected an unavailability exception to pro rata allocation, holding that under policy language limiting coverage to the policy period, an insurer cannot be made liable for years in which it did not agree to provide coverage, “regardless of whether applicable insurance was ‘available’ or ‘unavailable.’” Scott M. Seaman & Jason R. Schulze, Allocation of Losses in Complex Insurance Coverage Claims § 4:3[c][1]. As the Appellate Division recognized, these cases are based on the principle that the “policies themselves did not provide coverage for the disputed periods,” and they recognize that “the overall effect of passing that risk on to the insurance companies would be to provide free insurance coverage to the policyholders for those periods of no insurance.” A-652. “how to treat … periods where no insurance is available.” Con Ed, 98 N.Y.2d at 225. The point is that the textual analysis applied in Con Ed provides the answer here, where the question is presented. It is not unusual for this Court to note a question left open in a particular decision, and then answer the question later by relying on the very decision that left it open. See, e.g., Doerr v. Goldsmith, 25 N.Y.3d 1114, 1116 (2015); People v. Andrades, 4 N.Y.3d 355, 357 (2005); State v. Green, 96 N.Y.2d 403, 408 (2001). And here, Con Ed is not the only relevant decision—Viking reinforces its holding that an insurer cannot be made liable for coverage outside its policy period unless the policy language allows it, which is the rule that controls this case. 23 The Massachusetts Supreme Judicial Court’s decision in Boston Gas is a leading precedent on this issue. Applying the same text-based analysis applied in Con Ed and Viking Pump, Boston Gas holds that an unavailability exception “would contravene the limitation of coverage in the Century policies to liability attributable to property damage during the policy periods.” 910 N.E.2d at 315. By overriding the policies’ temporal limitation, Boston Gas explains, the unavailability exception would “effectively provide[] insurance where insurers made the calculated decision not to assume risk and not to accept premiums.” Id. Many other courts agree. As the South Carolina Supreme Court put it, an unavailability exception would “shift losses from one policy period to another in order to create coverage where none was purchased.” Crossman, 717 S.E.2d at 602, n.16. And the Seventh Circuit, applying New York law, likewise denounced the unavailability exception as “the economic equivalent of requiring [the insurer] to furnish free coverage” during the unavailability period. Sybron, 258 F.3d at 600. The cases are legion,6 and their analysis is unassailable: an unavailability 6 See, e.g., Bradford Oil Co. v. Stonington Ins. Co., 54 A.3d 983, 991 (Vt. 2011) (unavailability exception inconsistent “with a pure time-on-the-risk methodology,” a form of pro rata allocation applied in Con Ed); AAA Disposal Sys., Inc. v. Aetna Cas. & Sur. Co., 821 N.E.2d 1278, 1290 (Ill. App. Ct. 2005) (rejecting unavailability exception because, under the policy language, policyholders “cannot shift responsibility for the uninsured years [to insurer]”); Spartan Petroleum Co. v. Federated Mut. Ins. Co., 162 F.3d 805, 807 n.1, 813 (4th Cir. 1998) (allocating coverage over “the total period of damages,” even though 24 exception to pro rata allocation would override a policy’s textual coverage limitation to the policy period, thereby extending coverage into periods the insurer never agreed—and was never paid premiums—to cover. B. KeySpan’s Contrary Arguments Lack Merit 1. The “Legal Fiction” Underlying Pro Rata Allocation Does Not Support, But Undermines, The Unavailability Exception KeySpan’s principal argument for an unavailability exception rests on repeated invocation of Viking Pump’s observation that pro rata allocation is a “legal fiction.” 27 N.Y.3d at 261. KeySpan takes that observation as a license for courts to override policy text in favor of “public policy concerns.” KeySpan Br. 32. Viking Pump, of course, suggests no such thing. To the contrary, Viking Pump reiterates that “the contract language controls the question of allocation.” 27 N.Y.3d at 257. KeySpan simply misunderstands the “legal fiction” underlying pro rata allocation. It is merely the assumption that, absent contrary evidence, damages result from occurrences spread evenly across all years of property damage. And that assumption does not support KeySpan’s position, but undermines it. An that period was subject to absolute pollution exclusion); Midamerican Energy Co. v. Certain Underwriters at Lloyd’s London, 2011 WL 2011374, at *3 (Iowa Distr. Ct. Apr. 13, 2011) (“‘unavailability’ exception disproportionately allocate[s] damage to insurers for periods of time when no coverage was agreed to or bargained for”). 25 insured seeking to recover on an insurance policy normally bears the burden to prove “precisely what injury or damage took place during each contract period.” Boston Gas, 910 N.E.2d at 312. But in situations of long-tail harm, it is often “impossible to determine the extent of the property damage that is the result of an occurrence in a particular policy period,” Con Ed, 98 N.Y.2d at 224, as is true on the summary judgment record here. Because the damage is “not actually … capable of being confined to specific time periods,” Viking Pump, 27 N.Y.3d at 261, the insured would be unable to carry its normal burden of proving which damage was caused by occurrences within specific coverage periods. The “legal fiction” underlying pro rata allocation solves that problem for the insured by allowing the court to assume that the loss was “spread … equally among all of the relevant years”—even though the loss may not in fact have been spread equally. 3-22 New Appleman on Insurance Law Library Edition § 22.03[2]; see Con Ed, 98 N.Y.2d at 224. Proration is a next-best effort to reflect the unproved (and sometimes unprovable) reality of when the damage occurred—it “reasonably approximates the loss attributable to each policy period.” Crossman, 717 S.E.2d at 602; see Boston Gas, 910 N.E.2d at 314 (pro rata allocation is designed to best “approximat[e] the actual distribution of property damage,” absent better evidence). If an insured cannot produce evidence of actual per-period damage, then it is reasonable to assume that “the damage occurred in equal 26 portions during each year that it progressed.” Crossman, 717 S.E.2d at 602. Contrary to KeySpan’s characterization, this is an inherently policyholder-friendly assumption—it “relieves policyholders of their burden to prove the amount of injury or damage that happened in each policy period.” Jan M. Michaels et. al., The Avoidable Evils of “All Sums” Liability for Long-Tail Insurance Coverage Claims, 64 U. Kan. L. Rev. 467, 487 (2015); see Sybron, 258 F.3d at 602 (New York law) (pro rata allocation “solve[s], or at least mitigate[s], th[e] causation problem” inherent in long-tail injury cases). The equal-loss-distribution assumption underlying pro rata allocation is irreconcilable with an unavailability exception. By assuming that damage occurred equally during each year it progressed, the court can determine how much damage to allocate to each policy period consistent with policy language limiting coverage to the policy period. The unavailability exception directly overrides that language, by making the insurer liable for damage occurring in years outside its period. To remain consistent with the policy language, a court would have to assume that during the overall period of contamination, the damage somehow just happened to stop occurring altogether during a period when insurance was unavailable—an assumption that is not a plausible fiction, but an absurd fantasy: just as “[p]rogressive injuries by definition do not magically gravitate toward periods with more coverage,” Boston Gas, 910 N.E.2d at 314 (emphasis added; quotations and 27 alterations omitted), they do not magically gravitate toward periods of available coverage. The assumption that no damage occurred when insurance was unavailable is, on its face, merely an attempt to “avoid the rationale and natural consequence of a pro rata allocation.” Seaman & Schulze, supra, § 4:3. 2. KeySpan’s Text-Based Arguments Are Wrong Unable to supplant the textual policy period limitation with an inapposite legal fiction, KeySpan asserts a few arguments based on other aspects of the policy. None has merit. a. KeySpan argues that an unavailability exception is justified because the Century policies do not contain a special allocation formula. KeySpan Br. 27. The conclusion hardly follows from the premise, but in any event, no such formula is required: the policy period limitation is what compels pro rata allocation, and the same limitation is what precludes an unavailability exception. An allocation formula might be required for one occurrence within the policy period that actually does cause damage both within and outside that period—as with the Century policy KeySpan highlights that included a proration formula for advertising injury that straddled policy periods. KeySpan Br. 29-30. But pro rata allocation does not result from the presence or absence of a particular allocation formula—it results from the insured’s inability to prove how much actual damage occurred within the policy period, as the policies require. See supra Part I.A.2. 28 b. KeySpan also urges adoption of an unavailability exception because otherwise pro rata allocation would “transfer a significant portion of the risk back to a policyholder that was unable to buy coverage.” KeySpan Br. 39 (emphasis added). Again, KeySpan simply misunderstands the textual premise of pro rata allocation: the policy language was written expressly to prevent the insurer from assuming any risk of liability for damage from occurrences happening outside the policy period. Accordingly, no matter how the insured handles coverage for other periods, there is no transfer of risk from the insurer “back” to the insured—the insurer never assumed it in the first place. c. KeySpan also cites drafting history of the 1966 General Liability form (Br. 27-29) and the doctrine of contra proferentem (Br. 30-31). But “before the rules governing the construction of ambiguous contracts are triggered, the court must first find ambiguity in the policy.” Breed v. Ins. Co. of N. Am., 46 N.Y.2d 351, 355 (1978).7 And here, this Court has already held that the policy’s temporal limitation to coverage of damage from occurrences during the policy period is 7 The drafting history cited by KeySpan is also highly misleading. KeySpan quotes (Br. 28) an article—Eugene R. Anderson et al., Liability Insurance Coverage for Pollution Claims, 59 Miss. L.J. 699, 729-30 & n.147 (1989)—which in turn quotes the drafting history of the 1966 General Liability form, which predates nearly all of the Century policies here (covering 1953 to 1969). 29 “unambiguous.” Con Ed, 98 N.Y.2d at 224. That unambiguous limitation precludes an unavailability exception. d. Finally, KeySpan asserts that an unavailability exception reflects the parties’ reasonable expectations. KeySpan Br. 32-35. But the “best evidence of what parties to a written agreement intend is what they say in their writing.” Slamow v. Delcol, 79 N.Y.2d 1016, 1018 (1992). And the parties’ writing here says that Century cannot be held liable for damage resulting from occurrences outside the policy period. If the parties had agreed to the rule that KeySpan advocates—i.e., a rule that makes KeySpan responsible for damage only during periods when it “chooses to ‘go bare,’” KeySpan Br. 32—then the policy would have promised to cover damage caused by occurrences that happened “during the policy period and any other period when insurance was or will be unavailable.” And if the parties had so agreed, KeySpan would have paid much higher premiums. KeySpan instead simply demands more than seven decades worth of free coverage—an “expectation” that cannot be considered “reasonable” by any definition. Rejecting that viewpoint would be the opposite of “extreme” or “draconian.” KeySpan Br. 27, 42. KeySpan instead would receive exactly what it paid for, and what the agreed-upon policy language reflects. 30 3. The Cases Cited By KeySpan Impermissibly Reject The Policy Text In Favor Of Irrelevant “Public Policy Factors” According to KeySpan, cases applying New York law uniformly recognize an unavailability exception to pro rata allocation. Br. 41-44. KeySpan is wrong: as KeySpan itself points out, Con Ed expressly left this question open, see supra note 5, the Seventh Circuit (applying New York law) has rejected an unavailability exception, Sybron, 258 F.3d at 600, and the only New York appellate court to have considered the question—the First Department below—unanimously rejected KeySpan’s position. KeySpan chiefly relies on the Second Circuit’s decisions in Stonewall and Olin, but they were both decided before Con Ed, and they are inconsistent with the textual analysis of pro rata allocation in both Con Ed and Viking Pump. Con Ed and Viking Pump hold that “the contract language”—and not “policy concerns”— “controls the question of allocation.” Viking Pump, 27 N.Y.3d at 257. By contrast, Stonewall and Olin do not analyze the policy language at all, relying instead on the New Jersey Supreme Court’s decision in Owens-Illinois that explicitly rejected a policy-language-based approach. According to the Owens- Illinois court, there was no “answer to allocation in the language of the policies,” 650 A.2d at 990, and thus the court relied entirely on “public interest factors” to determine the proper allocation method, id. at 992. As the New Jersey Supreme Court later candidly acknowledged, “Owens-Illinois eliminated reliance on 31 particular contract language … and on traditional rules of interpretation.” Spaulding Composites Co. v. Aetna Cas. & Sur. Co., 819 A.2d 410, 420 (N.J. 2003). The Owens-Illinois/Stonewall/Olin approach is inconsistent with New York law, which relies entirely on policy language to determine allocation, as both Con Ed and Viking Pump illustrate. Every other case adopting an unavailability exception suffers from the same flaw. Some explicitly conduct the non-textual equitable analysis that Con Ed rejects. A good example is the recent decision in R.T. Vanderbilt Co., Inc. v. Hartford Accident & Indemnity Co., 171 Conn. App. 61 (2017), which holds that the policy language does not address insurance unavailability, id. at 131, and thus adopts the unavailability exception because it ostensibly “distributes the burdens equitably,” id. at 140; accord Wooddale Builders, Inc. v. Md. Cas. Co., 722 N.W.2d 283, 297-98 (Minn. 2006). Many other cases simply cite Owens-Illinois or other precedent applying non-textual analysis without elaboration.8 And a number of cases cited by KeySpan are inapposite or unhelpful for various other reasons.9 8 See, e.g., Fulton Boiler Works, Inc. v. Am. Motorists Ins. Co., 828 F. Supp. 2d 481, 494 (N.D.N.Y. 2011); Pneumo Abex Corp. v. Md. Cas. Co., 2001 WL 37111434, at *10 (D.D.C. Oct. 9, 2001); Goulds Pumps, Inc. v. Travelers Cas. & Sur. Co., 2016 WL 3564244, at *9, 13 (Cal. Ct. App. Jun 22, 2016); Uniroyal, Inc. v. Am. Re-insurance, Co., 2005 WL 4934215, at *22 n.5 (N.J. Super Ct. App. Div. Sept. 13, 2005); Mayor & City Council of Balt. v. Utica Mut. Ins. Co., 802 A.2d 32 This Court should not follow the minority, “public policy factor” cases cited by KeySpan, but the vast majority of courts that have rejected the unavailability exception as inconsistent with the same policy language this Court definitively construed in Con Ed and Viking Pump. 1070, 1104 (Md. Ct. Spec. App. 2002); Travelers Indem. Co. v. Fischbach, LLC, 2011 WL 1495196 (Sup. Ct., N.Y. Cnty. Apr. 8, 2011); Gen. Elec. Co. v. Lines, 2010 WL 2486721 (Mass. Super. Ct. Mar. 16, 2010). 9 See Continental Cas. Co. v. Indian Head Indus., Inc., 666 F. App’x 456, 467 (6th Cir. 2016) (policyholder failed to show insurance was unavailable, so no unavailability question presented); Chem. Leaman Tank Lines, Inc. v. Aetna Cas. & Sur. Co., 177 F.3d 210, 228 (3d Cir. 1999) (allocation governed by New Jersey law, so Owens-Illinois applied); Liberty Mut. Ins. Co. v. Fairbanks Co., 170 F. Supp. 3d 634, 636 (S.D.N.Y. 2016) (no question of insurance-unavailability presented, prorating to the insured, and following Stonewall in dicta); Decker Mfg. Corp. v. Travelers Indem. Co., 106 F. Supp. 3d 892, 898 (W.D. Mich. 2015) (policyholder failed to show insurance was unavailable, so no unavailability question presented); U.S. Fid. & Guar. Co. v. Cont’l Ins. Co., 2010 WL 4102250, at *3 (D. Mont. Oct. 18, 2010) (declining even to decide what allocation method would be used under Montana law); EnergyNorth Nat. Gas Ins, Inc. v. Certain Underwriters at Lloyd’s, 934 A.2d 517, 526 (N.H. 2007) (no question of insurance unavailability presented, and court agreed with Owens-Illinois that allocation is based on public-policy considerations); Sec. Ins. Co. of Hartford v. Lumbermans Mut. Cas. Co., 826 A.2d 107, 121 (Conn. 2003) (no question of insurance- unavailability presented); Nomet Mgmt. Corp. v. Va. Sur. Co., 2012 WL 10007753, at *4 (Sup. Ct., N.Y. Cnty. Apr. 2, 2012) (no question of insurance-unavailability presented and citing nothing in support of dictum endorsing unavailability rule); Cont’l Cas. Co. v. BorgWarner Inc., 2005 WL 6955478, at *4 (Ill. Cir. Ct. Aug. 15, 2005) (case overruled by appellate court in AAA Disposal Sys., 821 N.E.2d 1278). 33 C. The Unavailability Exception Is Contrary To Sound Public Policy For the reasons explained thus far, the question presented here is controlled by the unambiguous policy text as construed in this Court’s precedents. And because “the contract language controls the question of allocation” under New York law, Viking Pump, 27 N.Y.3d at 257, the public policy arguments KeySpan advances are irrelevant. “Equitable considerations will not allow an extension of the coverage beyond its fair intent and meaning.’” Breed, 46 N.Y.2d at 355 (quotation omitted) (cited by Con Ed, 98 N.Y.2d at 221). Such considerations in any event overwhelmingly favor enforcing the policy language and rejecting an unavailability exception to pro rata allocation. 1. An Unavailability Exception Reduces The Incentives For Policyholders To Discover And Remediate Environmental Contamination This Court recognized in Con Ed that “[e]specially in the environmental pollution context,” courts should favor “a result [that] provides the insured with an incentive to strive for early detection that it is releasing pollutants into the environment.” 98 N.Y.2d at 220 (quotations omitted). An unavailability exception does the opposite—it “reduces the incentives for insureds to discover and limit progressive injury damage,” because “[i]f insurers pay more of the insured’s liability, the insured must pay less and consequently will be less concerned about limiting injury.” Michael G. Doherty, Allocating Progressive Injury Liability 34 Among Successive Insurance Policies, 64 U. Chi. L. Rev. 257, 281 (1997) (emphasis added). Absent the exception, the allocation period ends only when the property damage ends, thereby incentivizing policyholders to identify and mitigate damage to terminate the allocation period and minimize the proportion of liability allocable to them for uninsured years. KeySpan says the incentives go the other way, because absent an unavailability exception, “insurers would have a perverse incentive to delay paying claims, because the more time that goes by while progressive injury or property damage, continues, the less insurers have to pay.” Br. 38. Insurers, however, have an “obligation to perform in good faith,” Soto v. State Farm Ins. Co., 83 N.Y.2d 718, 723 (1994), enforced by the threat of substantial penalty—9% prejudgment interest, CPLR § 5004—if they breach that obligation by unjustly delaying payment. Insurers thus already have ample incentive not to delay paying valid claims merely to extend the allocation period. KeySpan’s equitable argument rests heavily on the assertion that an unavailability rule sometimes results in unfair consequences in asbestos cases. KeySpan Br. 27, 34, 39-40. This is not an asbestos case. As discussed below, equitable considerations cited by courts in the asbestos context are unique to that context and should be addressed in an asbestos case actually raising them. See infra Part II. KeySpan’s incentives argument well illustrates the difference. 35 According to KeySpan, asbestos injury is often latent and undiscoverable for many years, potentially leaving companies with reduced coverage, depending on when the injury occurred and how long insurance was unavailable. That concern simply has no application to environmental contamination, which can be discovered essentially any time through adequate investigation, and can be ameliorated through remediation. For this reason, relieving insureds of responsibility for damage occurring when insurance was unavailable affirmatively reduces their incentives to investigate their properties and work with environmental authorities to remediate contamination quickly. Whatever may be true in the distinct context of asbestos coverage, concerns about incentives fully support enforcement of the plain policy language in the context of environmental contamination. 2. The Unavailability Exception Inefficiently Transfers Risk, And Raises The Cost Of Insurance KeySpan touts its unavailability rule as promoting “the fundamental purpose of insurance: to transfer risk from the policyholder to the insurer.” KeySpan Br. 38. But KeySpan fails to acknowledge that efficient “spreading of industry risk is accomplished through the setting and payment of premiums,” A-656—as KeySpan’s principal case (Br. 38) recognizes, see USF&G v. Maggiore, 299 A.D.2d 341, 344 (2d Dep’t 2002) (the “purpose of an insurance contract” is to transfer risk only where “the insurer has accepted payments from the insured to assume th[e] risk of loss”). Only where the premiums paid are based on “the level 36 of risk incurred” does the insurance market operate effectively by spreading risk to those who can bear it, while “forci[ing] insured companies to internalize the costs of their activities.” Doherty, supra, 64 U. Chi. L. Rev. at 266. The problem for KeySpan is that the unavailability exception by design provides policyholders with coverage for periods in which they paid nothing, including years in which “insurers made the calculated decision not to assume risk and not to accept premiums.” Boston Gas, 910 N.E.2d at 315. Free insurance does not efficiently transfer risk—it provides policyholders an inequitable windfall. That windfall, moreover, is not only inequitable, but creates incentives for overly risky behavior: “By tailoring premiums to the level of risk incurred, insurance forces insured companies to internalize the costs of their activities” and “assess and manage their risks.” Doherty, supra, 64 U. Chi. L. Rev. at 266. And “[w]ithout premiums tied closely to risks”—as under an unavailability rule—policyholders have “insufficient incentives to avoid risky activities.” Developments in the Law— Toxic Waste Litigation, 99 Harv. L. Rev. 1573, 1575-76 (1986). Such free coverage would, in the end, make insurance itself more expensive, because “in the long run insurance companies must pass on [the] price [of increased coverage] or must themselves suffer hardship or failure.” Am. Home Prods. Corp. v. Liberty Mut. Ins. Co., 565 F. Supp. 1485, 1511 (S.D.N.Y. 1983). KeySpan says that policyholders may face larger financial burdens if they are not 37 afforded extra insurance beyond that for which they paid premiums, Br. 39-41, but granting these policyholders a windfall would necessarily result in more expensive (and even non-existent) insurance in the future. For just that reason, New York courts do not invoke equity to extend an insurance policy “beyond its fair intent and meaning.” Breed, 46 N.Y.2d at 355. 3. An Unavailability Exception Would Generate Complicated And Costly Litigation Finally, one of the primary virtues of pro rata allocation is “its inherent simplicity,” which “promotes predictability, reduces incentives to litigate, and ultimately reduces premium rates.” Boston Gas, 910 N.E.2d at 314 (alteration and quotation omitted). Recognizing an unavailability exception would upend that simplicity and inject complicated, time-consuming, and distracting inquiries into already complicated litigation. After the trial court’s summary judgment decision on allocation recognizing an unavailability exception, the court held (over Century’s objection) that a jury, rather than the court, must determine when insurance was available—and the parties subsequently tried the unavailability issue to a jury along with the ordinary coverage issues centrally at issue in this litigation (e.g., whether the property damage at KeySpan’s MGP sites was accidental). Lay jurors thus were asked to determine whether and when coverage was “generally available in the marketplace,” and the “relevant inquiry [was] not limited to whether an insured 38 was able to continue obtaining coverage for the particular risk in the same policy type but may take into account whether the insured could purchase coverage of another policy type that would have provided similar coverage.” A-19. As a threshold matter, this inquiry creates an impossible line-drawing problem, because there is no reasonable way for lay jurors to determine what it means for insurance to be “available.” See Sybron, 258 F.3d at 599 (“[W]e do not know what it means (or could mean) to say that coverage for a particular risk is ‘unavailable.’ Unavailable at what price?”). Absent a legal prohibition, after all, insurance is always available to a would-be policyholder at some price, “even after a risk has come to pass and the obligation to pay is certain.” Id. at 599-600. It is accordingly wrong to “assume that insurance is ‘available’ or ‘unavailable,’ as if it were on or off like a light bulb.” Id. Determining when the price is so high that there was no practical “opportunity for [the plaintiff] to obtain some form of generally available insurance,” Olin, 221 F.3d at 325, is an inherently arbitrary exercise. Moreover, even if this threshold problem could be overcome, the jury would be forced to engage in a confusing, counterfactual exercise that would distract its attention from the central coverage questions at issue in insurance litigation. Rather than focusing on the language and scope of the policies at issue, the jury would be asked to consider different policies from different periods, issued by 39 different insurers to different policyholders, to determine whether reasonably equivalent coverage was “available” to policyholders during any particular period. It is difficult enough for the jury to determine whether there was coverage under the applicable policies based on the facts of the case. But it is simply too much to ask a jury reasonably to determine whether similar coverage (whatever that means) was “available” (whatever that means) in other periods under other policies in light of hypothetical facts. Even if the policies at issue here did not preclude this inquiry altogether, sound public policy would strongly favor avoiding this sideshow, and instead adopting an easy-to-administer allocation methodology that simply allocates liability “based on the amount of time the policy was in effect in comparison to the overall duration of the damage.” Con Ed, 98 N.Y.2d at 224. II. CASES RECOGNIZING AN UNAVAILABILITY EXCEPTION FOR THE POST-COVERAGE PERIOD DO NOT APPLY HERE AND DO NOT JUSTIFY APPLYING AN EXCEPTION TO THE PRE- COVERAGE PERIOD The few appellate decisions that have recognized an unavailability exception have applied it to exclude from the allocation period only those recent years in which previously-available coverage was voluntarily withdrawn from the market by the insurance industry. Most involve personal-injury coverage for asbestos- related injuries, based on purported equitable considerations unique to that context. See, e.g., R.T. Vanderbilt, 171 Conn. App. at 130; Stonewall, 73 F.3d at 1204; 40 Owens-Illinois, 650 A.2d at 976. For example, the R.T. Vanderbilt court recently emphasized that companies seeking coverage for latent asbestos injuries reasonably expected coverage for them, because they did have coverage when they were producing or using asbestos—personal injury coverage was not unlawful or unavailable. 171 Conn. App. at 137. And as discussed above, the effect of insurance allocation on incentives to investigate and remediate differ substantially between the asbestos context and the environmental contamination context. See supra at 34-35. This Court can await a case involving the unavailability of insurance for asbestos injuries in the post-coverage period to determine whether a limited exception for that period is justified by considerations specific to that context. The Court certainly should not apply an unavailability exception to the period before insurance ever became available, when companies chose to operate without property-liability insurance and hence could not have expected that an insurer would pay to remediate property damage occurring during their uninsured period of operation. Other than one unexplained Massachusetts trial court opinion, no case anywhere has excluded pre-coverage years of active pollution from a pro rata allocation period. Rightly so: applying an unavailability exception to the pre- coverage period conflicts with the parties’ reasonable expectations, contravenes the 41 very the premise of the exception, and would exacerbate the problems of proof already inherent in the exception. The cases cited by KeySpan recognize an unavailability exception for essentially one equitable reason: it is unfair to impose liability on a policyholder who long ago concluded its harm-causing activities, and was later precluded from purchasing insurance for damages caused by those activities because insurers collectively withdrew coverage from the market. See Olin, 221 F.3d at 325. KeySpan repeats that equitable argument here, complaining that it would be “draconian” to make an insured liable for the “years after the insurance industry withdrew … coverage from the market.” KeySpan Br. 27; see id. at 34-35, 39-40. But KeySpan does not say one word about why equity or public policy would favor absolving insureds of responsibility for damage from polluting activities that occurred even before they could obtain any insurance to cover those activities. KeySpan’s silence speaks volumes. As KeySpan knows full well, any company choosing to operate without insurance necessarily expects to bear the full risk of its operations. To shift that risk to an insurer would blatantly flout the “objectively reasonable expectations” of policyholders and insurers alike. Owens- Illinois, 650 A.2d at 991. There is no conceivable equitable or public policy basis for holding Century responsible for harm caused by KeySpan when it elected to operate without insurance and hence had absolutely no expectation of coverage 42 (much less a reasonable expectation). If the unavailability exception is to apply at all, it cannot exclude years in which KeySpan chose to operate despite the lack of insurance for risk of loss from its operations. Though KeySpan’s brief to this Court wholly ignores the pre-coverage period, KeySpan has elsewhere argued that insurers can fairly be held responsible for a policyholder’s pre-coverage activities because the insurer could have inspected the company’s facilities and written policies to exclude liability resulting from operations before the policy period. But Century did exactly that, by restricting coverage to damages resulting from occurrences during the policy period. What is more, the insurer is decidedly not the entity in the best position to understand what operations the polluting company engaged in decades ago and what effects those operations might have—the company will know far more about its own past activities than any insurer could ever divine. Excluding pre-coverage years from the allocation period is also inconsistent with the equitable principle that justifies the unavailability exception in the first place, i.e., the supposed unfairness of holding policyholders liable when self- insurance was “imposed” on them by insurers. Olin, 221 F.3d at 325. A Connecticut intermediate appellate court recently endorsed that view, adopting an unavailability exception on the ground that the non-textual, equitable reasons that courts have identified as favoring pro rata allocation to the policyholder do not 43 apply when the “policyholder desires and attempts to obtain coverage but the insurance industry declines to supply it.” R.T. Vanderbilt, 171 Conn. App. at 130. Even accepting that analysis, by its terms it has no application to the pre-coverage period here, where insurers had no role whatsoever in denying KeySpan access to insurance for its operations. Before 1922, New York state law prohibited insurers from selling standalone property liability policies. A-404. Specifically, the Attorney General opined in 1893 that “[n]othing can be lawfully the subject of … insurance unless it is specified in” Insurance Law § 70, Annual Report of the Att’y Gen. 90 (transmitted Jan. 2, 1894), and § 70 did not specifically authorize property liability coverage until 1922, see 1922 N.Y. Laws 661. KeySpan agreed below that the statutory prohibition made coverage “unavailable” before 1922. A-404. There is no logical or equitable basis for making Century liable for damage from occurrences during a period when Century was literally prohibited by law from providing insurance for such damage. Certainly no reasonable policyholder could expect insurance to cover a period when insurance was illegal. For these very reasons, the trial court (correctly) held that the period from 1971 to 1982— when the Legislature again prohibited the sale of pollution coverage—must be allocated to KeySpan. A-17-18. There is no basis for a different result in the pre- 1922 period. 44 Beyond this legal prohibition is the fact that KeySpan elected not to purchase insurance until 1953, two decades after the first year—1933—when KeySpan itself agrees that property liability insurance became available in the market. See, e.g., A-429 (1951 board meeting minutes explaining that the “Company is self-insured for damage to property of others,” except for coverage not relevant here). In other words, KeySpan’s lack of insurance in the pre- coverage period was not “imposed on” it by the insurance industry, Olin, 221 F.3d at 321—KeySpan and others instead were simply choosing to self-insure. Operators in the early twentieth century were well aware that waste from their plants could and often did cause third-party property damage for which they could face liability.10 And statements from KeySpan’s own senior executives show that KeySpan knew by 1933 at the latest that “public liability” insurance could be had. See T.H. Prendergaast & F.A. McKenry, Am. Gas Ass’n, Insurance Committee Report 6 (1933); see also id. at 2 (noting that utilities “may see fit to assume certain risks,” including the risk of “public liability” (capitalization omitted)); id. at 6 (the “most attractive feature of self-insurance … is the cash savings expected”). 10 See, e.g., P. Ballantine & Sons v. Pub. Serv. Corp. of N.J., 91 A. 95, 95 (N.J. 1914) (gas manufacturing process creates “a residuum of … tar and its compounds” which can “sink down into and permeate surrounding soil and underground percolating waters,” resulting in “injuries” and “long-continued litigation”). 45 Yet KeySpan waited an additional two decades to purchase insurance. No plausible equitable principle supports KeySpan’s contention that Century, which first wrote KeySpan coverage in 1953, should be liable for the five decades of property damage before KeySpan ever decided to insure. Given the foregoing, it is no surprise that the “few decisions recognizing an ‘unavailability’ exception have been limited to instances involving later years where a policyholder was unable to obtain coverage in the market place for a particular risk with respect to losses resulting from activities or products placed into commerce before such time as coverage became ‘unavailable’ due to pollution and asbestos exclusions.” Seaman & Schulze, supra, § 4.3[c][1] (emphasis added). KeySpan cites only one decision finding a pre-coverage unavailability exception— the Massachusetts trial court decision in General Electric Co. v. Lines, 2010 WL 2486721 (Mass. Super. Ct. Mar. 16, 2010). But that decision simply cites Stonewall and Olin, which involve only the post-coverage period, without explaining why they survive Con Ed or why they support allocation to the insurer in the pre-coverage period. Particularly in light of the obvious inequity of saddling insurers for liability during periods of active pollution that no insurer ever agreed to cover, this Court should not be the first to recognize an entirely unprecedented exception to 46 proration based on the unavailability of insurance before the policyholder ever purchased coverage. III. KEYSPAN’S CONTENTION THAT ALL-SUMS ALLOCATION APPLIES HERE IS PROCEDURALLY BARRED AND MERITLESS Since Century filed its partial summary judgment motion in 2014, and until its motion to reargue in the Appellate Division, KeySpan had affirmatively conceded that pro rata allocation applies. The only relevant disputes between the parties concerned the unavailability exception to pro rata allocation—i.e., whether that exception applies at all, and if so, how it applies in this case. KeySpan now argues, however, that certain “Other Insurance” provisions in the Century policies actually require all-sums allocation. This argument should be rejected because it is not properly before the Court. It should also be rejected because it is wrong. KeySpan’s all-sums theory misconstrues the policy language and misreads this Court’s decision in Viking Pump, which affirmatively rejects the all-sums theory KeySpan belatedly proffers. A. KeySpan’s All-Sums Argument Is Procedurally Barred 1. This Court lacks jurisdiction to consider KeySpan’s argument that all- sums allocation applies, and that argument is in any event affirmatively waived. a. This Court lacks jurisdiction over KeySpan’s new argument for three reasons. 47 First, this argument is not within the scope of the question the Appellate Division certified for review. This Court’s jurisdiction over appeals from non-final judgments is limited to questions the Appellate Division certified for appeal. See N.Y. Const. art. VI, § 3(b)(4) (“the appeal shall bring up for review only the question or questions so certified”); CPLR § 5602, Practice Commentaries (“Court of Appeals can review only the question(s) certified”). The Appellate Division never certified the all-sums allocation question for this Court’s review. Rather, the Appellate Division certified the question whether its decision was “properly made.” RA-106. And the Appellate Division’s decision, as KeySpan concedes, “addressed only the implementation of pro rata allocation.” KeySpan Br. 54-55. That concession suffices to preclude review. This Court construes a certified question that “asks whether the Appellate Division’s order was ‘properly made’ … as posing the question of law decided by that court and which it evidently intended to certify.” Patrician Plastic Corp. v. Bernadel Realty Corp., 25 N.Y.2d 599, 604 (1970) (emphasis added). The only question of law decided by the Appellate Division is whether there is an unavailability exception to pro rata allocation. Because the Appellate Division did not decide—and hence did not certify—any question concerning the application of all-sums allocation, this Court lacks jurisdiction to consider any such question. 48 Second, KeySpan’s attempt to raise this issue now is jurisdictionally time- barred. The trial court rejected KeySpan’s “all sums” argument in 2003, and KeySpan failed to appeal that decision. See supra at 8. Courts lack jurisdiction to consider appeals of interlocutory orders not appealed within 30 days of a decision’s notice of entry. See CPLR § 5513(a); Haverstraw Park v. Runcible Props. Corp., 33 N.Y.2d 637, 637 (1973); Hecht v. City of N.Y., 60 N.Y.2d 57, 60- 62 (1983). Third, KeySpan also failed to appeal or cross-appeal the October 2014 trial court order now under review, which held that pro rata allocation applies. An appeal or cross-appeal of that order was required here because KeySpan is not merely raising an alternative argument in support of the trial court’s order, see Parochial Bus Sys., Inc. v. Bd. of Educ. of the City of N.Y., 60 N.Y.2d 539, 543-46 (1983), but is instead seeking “affirmative relief” that would enlarge the judgment below in its favor, 511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 151, n.3 (2002); see Hecht, 60 N.Y.2d at 61-62 (“[A]n appellate court’s reversal or modification of a judgment as to an appealing party will not inure to the benefit of a nonappealing coparty.”). b. Apart from these jurisdictional defects, KeySpan affirmatively waived its all-sums argument in both the trial court and the Appellate Division. 49 In the trial court, KeySpan’s counsel affirmed in no uncertain terms: “I don’t want the record to seem as if I was arguing that we seek joint-and-several solution, we put all the liability on the single policy here. There’s complete agreement that Con Ed rejected that.” A-39. The trial court made clear that it was “not bound by anything” in the prior judge’s 2003 allocation order, A-44, and still KeySpan affirmatively disclaimed all-sums allocation, labeling it an “extreme alternative” that Con Ed had rejected, A-68. See also supra at 9. KeySpan also affirmatively represented on appeal that proration was the proper allocation method under the policies. KeySpan’s appellate brief explained that proration was “consistent with and properly applies Century’s policy language,” RA-46 (capitalization altered)—an assertion incompatible with its contention here that the Century policy language requires all-sums allocation. Even after this Court decided Viking Pump, KeySpan still did not argue on appeal that the decision requires all-sums allocation. When Viking Pump was issued, KeySpan filed in the Appellate Division a detailed letter-brief elaborating the various ways KeySpan considered the decision relevant to this case. RA-47-48. Nowhere in that letter did KeySpan remotely suggest that Viking Pump required applying all-sums allocation. RA-47. On the basis of that unambiguous record, the Appellate Division correctly observed that the trial court’s decision adopting “a pro rata time on the risk allocation formula” is “not challenged on appeal.” A-644. 50 It is well-established that parties are “precluded from raising a new point on appeal where that point is contrary to a concession previously made by that party or his counsel.” Arthur Karger, Powers of the NY Court of Appeals § 17.2. KeySpan’s repeated concession that pro rata allocation applies under the Century policies precludes it from denying that point at this late stage. 2. KeySpan offers three reasons why it should be allowed to raise its all- sums argument now. Each is incorrect in multiple respects. a. KeySpan argues that because its all-sums argument can be raised after a final judgment, it would be more “efficient” to simply decide it now on an interlocutory appeal. Br. 55. That contention is wrong for several reasons. First, KeySpan’s repeated and affirmative waiver prevents it from raising this argument even after final judgment. It is one thing to decline to appeal an interlocutory order but preserve the right to appeal after final judgment; it is quite another to concede repeatedly that the prior order was correct, yet then seek reversal of the order at the end of the case. That is why this Court does not consider new questions affirmatively conceded below. See Karger, supra, § 17.2. Second, a claim to efficiency cannot overcome a jurisdictional defect. There are two here. As shown above, the all-sums question was not decided by the Appellate Division, creating an insurmountable jurisdictional barrier to consideration of the question in this proceeding. See supra at 47. Separately, 51 there is the jurisdictional 30-day time-bar on appeals from interlocutory orders. See CPLR § 5513(a). KeySpan made exactly the same argument it makes now in 2003, and chose not to appeal then, even though it had every opportunity to do so. Even if KeySpan could appeal this issue after final judgment despite its waiver, the necessary consequence of § 5513(a) is that KeySpan cannot raise the “all sums” issue before final judgment. KeySpan cites Foley v. Roche, 86 A.D.2d 887, 887 (2d Dep’t 1982), KeySpan Br. 56, but that case holds only that the law-of-the-case doctrine does not require appellate courts to follow prior decisions in determining whether to grant reargument. Here, by contrast, the Appellate Division denied reargument on the basis KeySpan now asserts, and the question before this Court is whether it can review a prior unappealed interlocutory order 14 years after it was entered. The answer is no. b. KeySpan next argues (Br. 55) that the Appellate Division itself raised the question of all-sums allocation. KeySpan is exactly wrong. Not only did the Appellate Division not raise a “raise a new issue” concerning application of all- sums allocation, but it explicitly noted KeySpan’s affirmative concession that pro rata allocation was the correct allocation method. See supra at 49. To argue otherwise, KeySpan mischaracterizes the Appellate Division’s passing observation that the Century policies did not contain “the anti-stacking provisions that were at issue in Viking Pump.” A-654; see KeySpan Br. 47. That observation was 52 relevant not to any argument that all-sums allocation should apply, but solely to KeySpan’s erroneous argument that an unavailability exception should apply to pro rata allocation because Century’s policies, like those in Viking Pump, contemplated coverage outside the policy period. A-655. As the Appellate Division concluded, that argument “simply adds language that is not in any of the policies.” Id. Nothing in the court’s observation about the distinct provisions in Viking Pump raised any questions about application of pro rata allocation. c. Finally, KeySpan contends that its all-sums argument “could not have been raised below” because Viking Pump was not yet decided. Br. 56 (quoting In re OnBank & Trust Co., 90 N.Y.2d 725, 730 (1997)). Of course, even after Viking Pump was decided, KeySpan still did not raise the argument in its letter-brief to the Appellate Division explicitly addressing the decision. Nor was there any reason KeySpan was barred from objecting to pro rata allocation even before Viking Pump. The first clue that KeySpan could have objected to pro rata allocation before Viking Pump is that KeySpan actually did object to pro rata allocation thirteen years before the decision, arguing in 2003 that the Century policies’ “Other Insurance” clauses distinguished those policies from the Century policies the Con Ed Court construed to require pro rata allocation. RA-49-53. KeySpan certainly could have reiterated that argument long before 2016, rather than affirmatively and 53 repeatedly conceding that pro rata allocation is the correct approach. After all, Viking Pump itself explained that its decision was based directly on Con Ed, and on “the very type of language that we signaled might compel all sums allocation in Consolidated Edison.” Viking Pump, 27 N.Y.3d at 258-59. And other courts and parties had managed to assert the all-sums argument Viking Pump eventually endorsed. Indeed, the Delaware Chancery Court decision applying New York law that was ultimately upheld in Viking Pump was issued in 2009, five years before the trial court’s decision below. Viking Pump, Inc. v. Century Indem. Co., 2 A.3d 76 (Del. Ch. 2009). And other parties had argued the same point to New York state and federal courts well before the trial court’s decision here. See, e.g., Mt. McKinley Ins. Co. v. Corning Inc., 2012 N.Y. Misc. LEXIS 6531, at *12-14 (Sup. Ct., N.Y. Cnty. Sept. 7, 2012); Olin Corp. v. Am. Home Assurance Co., 704 F.3d 89, 102 (2d Cir. 2012). KeySpan thus cannot excuse its strategic decision not to pursue its all-sums argument until after it had already lost its principal allocation argument. The argument that certain non-cumulation provisions require all-sums allocation was widely understood and fully available to KeySpan well before the trial court’s decision here. KeySpan’s failure to raise that argument precludes KeySpan from asserting it now. 54 B. KeySpan’s Argument That All-Sums Allocation Applies Under Its Policies Is Meritless Citing Viking Pump’s holding that specific “non-cumulation” clauses compel all-sums allocation, KeySpan contends that the Century policies here likewise compel all-sums allocation, even though KeySpan admits that the Century policies do not contain provisions like those addressed in Viking Pump. KeySpan instead invokes different provisions in the Century policies—their “Other Insurance” provisions. KeySpan Br. 46-52. The “Other Insurance” provisions, however, have nothing to do with the language addressed in Viking Pump. Indeed, they have nothing to do with allocation at all, as this Court explicitly held in both Con Ed and Viking Pump. 1. Viking Pump addressed two specific policy provisions: a “non- cumulation” or “anti-stacking” clause, and a “continuing coverage” clause. The non-cumulation clause provided coverage for certain losses also “‘covered in whole or in part [by policies] issued to the [insured] prior to the inception date’ of the instant policy.” 27 N.Y.3d at 261 (emphasis added). The continuing-coverage clause similarly “expressly extend[ed] a policy’s protections beyond the policy period for continuing injuries.” Id. at 262. Both clauses, in other words, contemplated coverage outside the policy period, an approach at odds with Con Ed’s textual basis for pro rata allocation, which was premised on language strictly limiting coverage to the policy period. Id. at 261 (policy provisions contravened 55 “the very essence of pro rata allocation,” which is “that the insurance policy language limits indemnification to losses and occurrences during the policy period”). Viking Pump accordingly held that these non-cumulation and continuing- coverage clauses precluded pro rata allocation and required the all-sums approach. The Century policies here do not contain either the continuing-coverage provision or the non-cumulation clause, as the Appellate Division recognized, A- 654, and as KeySpan does not dispute. KeySpan instead cites the Century policies’ “Other Insurance” provisions, which KeySpan labels “anti-stacking” provisions for the sake of rhetorical effect and analytical confusion. According to KeySpan, these Other Insurance clauses require all-sums allocation for the same reasons the distinct non-cumulation provision required all-sums allocation in Viking Pump. They do not. The Viking Pump Court held that the non-cumulation clause there compelled all-sums allocation not because the clause could be labeled an “anti-stacking” provision, but because its specific language contemplated coverage for losses that occurred “‘prior to the inception date’ of the instant policy”—i.e., outside the policy period. 27 N.Y.3d at 261. The Other Insurance provisions KeySpan cites do no such thing. To the contrary, this Court explicitly held in both Con Ed and Viking Pump that Other Insurance clauses only “apply when two or more policies provide coverage during the same period,” in order to “prevent multiple recoveries from such policies.” Con Ed, 98 N.Y.2d at 223 (emphasis 56 added). As the Court explained, Other Insurance clauses thus “have nothing to do with” whether policies “in force during successive years” cover the same loss. Id.; see Viking Pump, 27 N.Y.3d at 265-66 (same). Contrary to KeySpan’s submission (Br. 49), the Other Insurance clauses in its Century policies do not differ in any material respect from those in the Century policies construed in Viking Pump. Br. 49. KeySpan highlights language from the 1961-1967 Century policies addressing their operation when a loss by the policy is also covered by insurance issued other insurers, or by Century itself: – One clause makes the policy excess of other insurance issued by other carriers “covering a loss also covered hereunder (except insurance purchased to apply in excess of the sum of the retained limit and the limit of liability hereunder).” – The second clause provides that if Century issued other insurance “covering a loss also covered hereunder (other than underlying insurance of which the insurance afforded by this policy is in excess),” then the policyholder would only be liable up to the highest limit of any Century policy. KeySpan Br. 47-48 (emphasis added). As KeySpan recognizes, this Court held in Viking Pump that the first clause of the Other Insurance provision applies only to “two or more policies [that] provide coverage during the same period.” KeySpan Br. 48 (quoting Viking Pump, 27 N.Y.3d at 266). But according to KeySpan, the second clause somehow applies to Century policies covering successive periods, id. at 49, even though the clause uses exactly the same operative language. KeySpan speculates that the latter clause must refer to successive Century policies because no insurer would issue 57 multiple policies “covering the same period at the same level of coverage for the same insured.” KeySpan Br. 49. On the basis of that conjured assumption, KeySpan contends that the second clause necessarily contemplates coverage of a loss outside the policy period, and thus compels all-sums allocation just like the distinct provisions construed in Viking. The Massachusetts Supreme Judicial Court squarely rejected that argument in Boston Gas, and this Court should do the same. Boston Gas construes Century policies with “other insurance” language materially identical to the language KeySpan emphasizes, 910 N.E.2d at 295-97, and holds that the clauses “do not reflect an intention to cover losses from damage outside the policy period,” id. at 308 (emphasis added). As Boston Gas observes, “the ‘other insurance’ clauses simply reflect a recognition of the many situations in which concurrent, not successive, coverage would exist for the same loss.” Id. Like KeySpan, Boston Gas speculated that the provisions necessarily contemplated coverage of a single loss by successive Century policies, but the Massachusetts Supreme Judicial Court recognized that the provisions “come into play where two concurrent policies, one issued to a parent company and one to a subsidiary, both insure the subsidiary.” Id. at 309 (emphasis added).11 The clauses might plausibly be described as “anti- 11 In addition to concurrent policies for a parent and a subsidiary, concurrent coverage can arise when, for example, a professional liability policy or automobile 58 stacking” provisions because they would preclude the subsidiary from recovering more than the limit of the highest-limit policy. Yet “[t]his is not a successive coverage situation, but simply one in which two concurrent policies insure the same loss.” Id. KeySpan’s contrary reading of the language is untenable. On KeySpan’s view, the phrase “covering a loss also covered hereunder” in the first sentence of the Century policies’ Other Insurance provision refers to policies providing coverage during the same period, whereas the same phrase in the very next sentence refers to policies providing coverage during successive periods. KeySpan cannot defend that stark asymmetry. And indeed, the Viking Pump Court already rejected it, construing the same language to apply only “when two or more policies provide coverage during the same period,” and not in successive periods. Viking Pump, 27 N.Y.3d at 266; see RA-62 (sample Viking Pump policy “other insurance” clause providing that the policy is in excess of other insurance “covering a loss also covered by this Policy, other than insurance that is in excess of the insurance afforded by this Policy” (emphasis added)); see generally RA-60-105 (numerous Viking Pump policies with similar “other insurance” provisions). There is no plausible justification for construing identical language to mean different things in policy overlaps with a general liability policy, or an errors-and-omissions policy provides coverage overlaps with a directors-and-officers policy. 59 different Century policies, and even in different sentences of the same provision of the same policy. To the contrary, courts always presume “that the same words used in different parts of a writing have the same meaning.” Finest Invs. v. Sec. Tr. Co. of Rochester, 96 A.D.2d 227, 230 (4th Dep’t 1983). Contrary to KeySpan’s argument (KeySpan Br. 52-54), Century’s position here is entirely consistent with the position it took before a Pennsylvania trial court in Mine Safety Appliances Co. v. Century Indemnity Co. See RA-35. Century did argue in Mine Safety that similar Other Insurance clauses applied to successive insurance policies under Pennsylvania law, but only because the Pennsylvania Supreme Court had previously construed the policy language limiting coverage to “all sums” incurred “during the policy period” to require joint-and-several allocation, not pro rata allocation. See J.H. Fr. Refractories Co. v. Allstate Ins. Co., 626 A.2d 502, 505, 508 (Pa. 1993). Century explicitly argued that under pro rata allocation, the Other Insurance clauses do not apply to successive insurance policies—exactly the same position Century takes here. RA-35. Where pro rata allocation applies, Century explained, “‘other insurance’ clauses are not intended to allocate liability among successive insurers,” because such insurers “do not insure the same risk and would unjustly make consecutive insurers liable for damages occurring outside their policy periods.” RA-36 (quotation omitted; emphasis deleted). Under an all-sums allocation regime, by contrast, the insurer 60 does cover the same risk covered by a successive insurer, and thus an Other Insurance clause is properly understood as applying to a successive policy covering the same risk. Id. Nothing about that argument remotely conflicts with Century’s position here—expressly adopted in Con Ed—that under the pro rata allocation regime mandated by its policy text, the Other Insurance clauses apply only to policies covering the same risk in the same policy period. In fact, New York law goes even beyond Pennsylvania law in limiting Other Insurance clauses to concurrent coverage in the same policy period. In New York, that rule applies even under all-sums allocation. See Viking Pump, 27 N.Y.3d at 265-66. The insurers in Viking (including Century) argued—much like Century argued in Mine Safety—that if all-sums allocation applied because of the policies’ non-cumulation provisions, then the policies’ Other Insurance clauses should be construed as applying to successive years of coverage, thus requiring the policyholder to exhaust all primary coverage before tapping any excess layer. See id. This Court squarely rejected that argument, holding that even in an all-sums allocation regime, Other Insurance clauses apply only to concurrent coverage, not successive coverage. Id. That holding conclusively refutes KeySpan’s argument for all-sums allocation here. CONCLUSION The certified question should be answered in the affirmative, and the Appellate Division's decision affirmed. Dated: April20, 2017 Respectfully submitted, JOHN L. ALTIERI, JR. BOUTIN & ALTIERI, P.L.L.C. P.O. Box 630 Carmel, New York 10512 (845) 306-7076 do~ J)A_ ~ " JONATHAN ROSEN~ ANTON METLITSKY LEAH GODESKY 0 'MEL VENY & MYERS LLP Times Square Tower Seven Times Square New York, New York 10036 (212) 326-2000 JONATHAN D . HACKER (Pro hac vice) 0 'MELVENY & MYERS LLP 1625 Eye St., N.W. Washington, D.C. 20006 (202) 383-5300 Attorneys for Defendant-Respondent Century indemnity Company 61 CERTIFICATION I certify pursuant to 22 N.Y.C.R.R. § 500.13(c)(l) that the total word count for all printed text in the body of the brief, exclusive of the corporate disclosure statement, the table of contents, the table of cases and authorities, and the statement of questions presented required by 22 N.Y.C.R.R. § 500.13(a), is 13,994 words. ~q;#{a., l2 9 ~ •. £J.. .~ n JONATHAN ROSE~~ O'MELVENY & MYERS LLP Times Square Tower Seven Times Square New York, New York 10036 (212) 326-2000