In Pepsi-Cola Metropolitan Bottling Company, Inc. v. Employers Insurance Company of Wausau (2023 WI 42), the Wisconsin Supreme Court did not reach a decision in a case involving an insurer’s duty to defend and the applicability of an anti-assignment clause. As a per curiam opinion, the supreme court’s decision did not establish a precedent; however, the published court of appeals decision was affirmed.

Facts

Employers Insurance Company of Wausau first issued primary and umbrella liability insurance policies to Waukesha Foundry Company in 1963, insuring the company and its immediate successor through 1971. After a series of corporate mergers, acquisitions, and reorganizations, Pneumo Abex, LLC became the successor in interest to the original Waukesha Foundry Company.

In 2019, Pneumo Abex, LLC and Pepsi-Cola Metropolitan Bottling Company entered into an assignment agreement whereby Pepsi became the indemnitor for asbestos lawsuits related to a Waukesha Foundry product, and Pneumo assigned its rights under the liability insurance policies to Pepsi. Pepsi sought coverage from Employers Insurance for defense against the asbestos liability claims.

Decision

The court of appeals held that Employers Insurance had a duty to defend Pepsi because the loss at issue occurred during the period in which Waukesha Foundry maintained liability insurance coverage. Therefore, the policy’s anti-assignment clause did not apply.

The appellate court disagreed with Employers Insurance’s argument that breaks in the chain of corporate succession precluded coverage, finding that “the insureds’ rights under the Wausau policies were continuously assigned through each of the corporate transactions and mergers.” The court also found that the complaint regarding the Waukesha Foundry product was sufficient to invoke the insurer’s duty to defend.

The supreme court wrote in a per curiam opinion that “no three justices reach agreement to either affirm, reverse, or affirm in part and reverse in part the court of appeals decision. Because the court did not reach a majority as to the mandate, the decision of the court of appeals is affirmed.”

Chief Justice Ziegler did not participate in the case and Justice Hagedorn withdrew from participation during the proceedings.