Young Women's Christian Ass'n of the National Capital Area, Inc. v. Allstate Insurance Co. of Canada , 275 F.3d 1145 ( 2002 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 20, 2001 Decided January 15, 2002
No. 00-7259
Young Women's Christian Association
of the National Capital Area, Inc.,
a District of Columbia Non-Profit Corporation,
Appellant
v.
Allstate Insurance Company of Canada,
a Canadian Corporation, et al.,
Appellees
Appeal from the United States District Court
for the District of Columbia
(No. 94cv00741)
Bardyl R. Tirana argued the cause and filed the briefs for
appellant.
Elizabeth B. Sandza argued the cause for appellees. With
her on the brief were Michael F. McBride, David M. Ross,
Ronald W. Fuchs, Richard W. Driscoll, Stuart L. Peacock,
William H. White Jr., John A. Scaldara and Donald J.
Walsh.
Before: Ginsburg, Chief Judge, Rogers and Garland,
Circuit Judges.
Opinion for the Court filed by Circuit Judge Rogers.
Rogers, Circuit Judge: The Young Women's Christian
Association of the National Capital Area ("YWCA") appeals
the grant of summary judgment to several insurance compa-
nies, contending principally that the district court erred in its
choice of law ruling and, alternatively, in its application of
law, having failed to abide by the language of the insurance
policies and the applicable rules for construction of insurance
contracts. We reverse the district court's choice of law ruling
and its application of law, and we remand the case for
consideration of exclusions under the policies and related
issues.
I.
On November 30, 1979, YWCA contracted with Tiber Con-
struction Company ("Tiber"), a Virginia corporation, for the
construction of a new building at 9th and G Streets, N.W., in
Washington, D.C. By subcontract, dated February 18, 1980,
Tiber engaged Beer Precast Concrete, Ltd. ("Beer"), of On-
tario, Canada, to furnish and install precast concrete panels
for the building. Beer cast the panels for the YWCA's
building in April-September 1980 and delivered and installed
the panels August-October 1980. Before shipping them to
the District of Columbia, Beer acid-etched the panels. The
architect on the project advised Tiber, however, that some of
the panels were unacceptable because they were chipped,
warped, cracked, discolored, or without homogenous distribu-
tion of aggregate. Beer agreed to patch the precast panels
and wash-down all of the panels at all elevations using
cleaning agents and scrub brushes in an attempt to achieve
uniformity of the finish. The on-site washing took place
around October 1980. Nine years later, in late 1989 or early
1990, the YWCA became aware of imperfections--cracks,
staining, and blemishes--in the precast concrete panels.
On August 28, 1990, YWCA filed suit in the United States
District Court for the District of Columbia against Tiber for
breach of contract and against Beer for breach of contract,
breach of warranty, negligence, and misrepresentation. Fol-
lowing the grant of summary judgment to Tiber on Tiber's
and Beer's cross-claims for contribution and indemnification,
the parties stipulated that any judgment against Tiber would
be entered against Beer. The misrepresentation claim was
dismissed pretrial. On the remaining claims, YWCA present-
ed evidence at trial regarding three causes of the damage to
the concrete panels. The evidence of YWCA's two experts,
Mark F. Williams and Bernard Erlin as well as Beer's expert,
William F. Logan, showed that the primary cause of the
deterioration of the panels was the introduction of excessive
chloride ions when Beer improperly acid-etched the panels.
This exposure to excessive chloride ions caused the steel
imbedded in the panels to corrode, resulting in the cracking
of the panels. The deterioration was exacerbated by Beer's
failures to manufacture the panels with sufficient concrete
cover over the imbedded steel, and to use galvanized reinforc-
ing mesh, to protect the steel from attack by chloride ions
where the concrete cover was less than one-and-a-half inches
thick, as required by the contract specifications and industry
standards. The corrosion of the imbedded steel and the
resulting cracking was an ongoing, insidious process; the
chloride ions slowly advance through the concrete until they
reach the steel, corroding it on a progressive and continuing
basis.
The jury found that Tiber and Beer had breached their
contract with the YWCA, that Beer was negligent, and that
YWCA had suffered $4.5 million in damages. The jury also
found that Tiber and Beer had failed to prove that the YWCA
knew or reasonably should have known that "there was a
condition in the panels that would cause a person exercising
ordinary care to make further inquiry as to the reasons for
that condition." The district court entered judgment on
January 31, 1994, for the YWCA in the amount of
$4,504,978.47 (costs included).
The YWCA then filed suit, on April 5, 1994, in the District
Court for the District of Columbia against Beer's seven
Canadian insurers ("the Insurers") during 1979 to 1991, the
period spanning the manufacture of the panels to the discov-
ery of the damage:
Kansa General International Insurance Company
("Kansa") issued a comprehensive general liability policy
with a $2 million limit, and an excess umbrella policy for
$5 million, for the term from July 31, 1979 to July 31,
1980.
Allstate Insurance Company of Canada ("Allstate")
issued a comprehensive general liability policy with a $2
million limit, and an excess umbrella policy for $5 million
for the term from July 31, 1980 to July 31, 1981.
New Hampshire Insurance Company ("New Hamp-
shire") issued two comprehensive general liability policies
with terms of July 31, 1982 to July 31, 1983 and July 31,
1983 to July 31, 1984 with limits of $1 million each.
Halifax Insurance Company ("Halifax") issued two
comprehensive general liability policies with terms of
July 31, 1984 to July 31, 1985 and July 31, 1985 to July
31, 1986 with limits of $1 million each.
Norad Reinsurance Company, Ltd. ("Norad") issued a
comprehensive general liability policy with a term of July
31, 1986 to July 31, 1987 and a limit of $5 million.
Richmond Insurance Company (Barbatos), Ltd. ("Rich-
mond") issued a policy for the term of July 31, 1987 to
July 31, 1988.
American Home Assurance Company ("American
Home") issued a comprehensive general liability policy
with a term of June 21, 1989 to July 31, 1991 and a limit
of $3 million.
The YWCA reached a settlement with Allstate, and on May
30, 1995, the district court dismissed YWCA's claims against
Allstate. YWCA's suit against Richmond was dismissed.
The district court entered a default judgment against Norad.
YWCA was unsuccessful in its effort to collect from Kansa.
Kansa filed for bankruptcy in December 1994, and on March
8, 1995, the Superior Court of Quebec ("Quebec Court")
issued a Winding-up Order. On April 9, 1998, the Canadian
Liquidator disallowed YWCA's submission of proof of its
claims against Kansa because (1) there was no injury during
the policy period within the meaning of Kansa's policies, (2)
exclusions under the policies were implicated, (3) YWCA
failed to give timely notice to Kansa of its alleged claims, and
(4) YWCA did not comply with the Liquidator's request that
it disclose the actual amount of its alleged damages. When
YWCA did not, when granted additional time, make the
requested disclosure, the Quebec Court entered a judgment
against YWCA on February 2, 1999, on its claims against
Kansa.
Meanwhile, in the district court here, on November 21,
1995, YWCA, Kansa, New Hampshire, and Halifax filed
cross-motions for summary judgment. On August 12, 1998,
the Magistrate Judge issued a report and recommendation
that District of Columbia law should apply to the construction
of the insurance policies, and that YWCA's and American
Home's motions for summary judgment should be denied and
New Hampshire's and Halifax's motions for summary judg-
ment should be granted. By Order dated January 26, 1999,
the district court rejected the Magistrate Judge's choice of
law recommendation, concluding instead that Canadian law
applied.
Thereafter, the district court granted Kansa's motion to
dismiss on grounds of comity, and in the alternative granted
Kansa's motion for summary judgment. The district court
also granted summary judgment to the three remaining In-
surers. Applying Ontario law to determine whether there
was coverage under the Insurers' occurrence-based policies,
the district court identified four relevant triggers of coverage
under Ontario law. The court rejected the "continuous trig-
ger," which includes all times from exposure to the harm to
its manifestation, because no Canadian court had applied it.
It also rejected the "manifestation trigger," for which the
trigger is the moment at which the damage becomes apparent
or is discovered, because Canadian courts (other than a
Quebec trial court), including the Ontario court, had rejected
it. The district court distinguished Canadian cases that had
applied an "injury-in-fact trigger," which looks to the time at
which the damage actually occurred, explaining that both
Pickford & Black Ltd. v. Canadian General Insurance Co.,
64 D.L.R (3d) 179, 185 (Can. 1976), and Dawson Creek v.
Zurich Insurance Co., No. 12371, 1998 A.C.W.S.J. LEXIS
86772, at *24-*25 (B.C. Sup. Ct. Sept. 17, 1998), did not
involve a single exposure that inevitably caused damage over
time, but involved both an initial exposure and a later event
that could be said to have caused the injury. In contrast, the
court stated that several Canadian courts had applied the
"exposure trigger," for which the triggering event is the
exposure to the harm that causes the damage rather than the
resulting damage to the property.
The district court then turned to the occurrence-based
policies at issue. Observing that the terms of the Halifax
policy speak of "exposure" during the policy period, and
noting that the acid-etching process was the single moment of
exposure at which time the damage became inevitable, the
court found that no triggering event had occurred during
Halifax's policy period. Rather, the exposure took place dur-
ing the term of Allstate's policy. Finding that the New
Hampshire and American Home policies did not indicate
which trigger applies, the court construed the terms of these
policies, namely, "injury," "destruction," and "damage," to
refer only to the moment of the initial exposure at which time
the damage becomes inevitable. Because, under the district
court's analysis, the acid-etching process was the causative
event when the damage became inevitable and there was no
intervening causative event during the New Hampshire and
American Home policies, it followed that these policies were
not triggered.
II.
On appeal, YWCA contends that the district court erred in
ruling that Canadian law applies to its claims against the
Insurers arising from Beer's negligence and breach of con-
tract in the District of Columbia. YWCA contends first, that
the district court erred in failing to conclude that there was
no conflict of laws between the District of Columbia and
Ontario because both apply a continuous trigger. YWCA
contends alternatively that, under the substantial interests
test, the correct choice of law is that of the District of
Columbia where the YWCA building is located, and that
under District of Columbia law, a continuous trigger applies
to comprehensive general liability policies when the injury is
continuous or progressive. See Wrecking Corp. of Am., Va.,
Inc. v. Ins. Co. of N. Am., 574 A.2d 1348, 1350 (D.C. 1990).
Alternatively again, YWCA contends that even if Ontario law
applies, the district court erred in relying on law of the
Province of Saskatchewan that conflicts with the law of
Ontario, explaining that in International Comfort Products
Corp. v. Royal Insurance Company of Canada, No.
99-177332, 2000 A.C.W.S.J. LEXIS 48324, at *12
(Ont. Sup. Ct. Mar. 20, 2000), Ontario rejected the exposure trigger
theory adopted in University of Saskatchewan v. Fireman's
Fund Insurance Company of Canada, No. 2172, 1997
A.C.W.S.J. LEXIS 161238 (Sask. Ct. App. Oct. 10, 1997).
YWCA maintains also that Ontario's application of the contin-
uous trigger is consistent with the leading decision of the
Supreme Court of Canada on the construction of insurance
policies, Reid Crowther & Partners Ltd. v. Simcoe & Erie
General Insurance Co., 99 D.L.R. (4th) 741 (Can. 1993), and
that the district court failed to apply this precedent when it
subjected all of the policies to an exposure trigger theory
even though the language of the policies insures against
occurrences.
Because there is diversity of citizenship among the parties
to this litigation, the law of the forum state supplies the
choice of law standards. Klaxon Co. v. Stentor Elec. Mfg.
Co., 313 U.S. 487, 496 (1941). Under District of Columbia
law, the court must first determine if there is a conflict
between the laws of the relevant jurisdictions. Eli Lilly &
Co. v. Home Ins. Co., 764 F.2d 876, 882 (D.C. Cir. 1985)
(citing Fowler v. A & A Co., 262 A.2d 344, 348 (D.C. 1970));
Duncan v. G.E.W., Inc., 526 A.2d 1358, 1363 (D.C. 1987).
Only if such a conflict exists must the court then determine,
pursuant to District of Columbia choice of law rules, which
jurisdiction has the "more substantial interest" in the resolu-
tion of the issues. See Nationwide Mut. Ins. Co. v. Richard-
son, 270 F.3d 948, 953 (D.C. Cir. 2001); Eli Lilly & Co., 764
F.2d at 882; Greycoat Hanover F St. Ltd. P'ship v. Liberty
Mut. Ins. Co., 657 A.2d 764, 767-78 (D.C. 1995).
It is unnecessary to engage in a conflict of laws analysis.
Both YWCA and the Insurers agree that the relevant juris-
dictions are the District of Columbia and Ontario. Examina-
tion of both forums' laws reveals that no conflict of laws exists
because both would apply a continuous trigger to the occur-
rence-based policies where the damage can be characterized
as being continuous or progressive.1
__________
1 In ruling that Canadian law applied, the district court relied
upon Liberty Mutual Insurance Co. v. Travelers Indemnity Co., 78
F.3d 639 (D.C. Cir. 1996). In Liberty Mutual, the court examined
which state law should govern a liability insurance policy and stated
that "[u]nder District law, insurance contracts are governed by the
substantive law of the state in which the policy is delivered." Id. at
642; see also CSX Transp., Inc. v. Commercial Union Ins. Co., 82
F.3d 478, 482 (D.C. Cir. 1996) (citing Liberty Mutual with approv-
al). It is not altogether clear that Liberty Mutual correctly charac-
terized the District of Columbia's choice of law rules. This court's
decision in Nationwide Mutual Insurance Co., applying the District
of Columbia Court of Appeals decision in Greycoat Hanover sug-
gests that the District of Columbia applies the law of the jurisdic-
tion with the more substantial interest in the litigation, in consider-
ing what law to apply to insurance policies. Nationwide Mut. Ins.
Co., 270 F.3d at 953; cf. Ideal Elec. Sec. Co. v . Int'l Fid. Ins. Co.,
129 F.3d 143, 148 (D.C. Cir. 1997). Liberty Mutual addressed
neither Greycoat Hanover nor the more substantial interest test,
relying instead on D.C. Court of Appeals decisions involving life
insurance policies rather than liability policies. Liberty Mut., 78
F.3d at 642 (citing Levin v. John Hancock Mut. Life Ins. Co., 41
A.2d 841 (D.C. 1945), and Raley v. Life & Cas. Ins. Co. of Tenn.,
117 A.2d 110 (D.C. 1955)). Those District of Columbia cases are
specific, however, to life insurance policies and rely on Supreme
Court cases holding that the place of delivery of life insurance
A.
Neither the highest court in Ontario nor the Supreme
Court of Canada has addressed which trigger theory applies
to occurrence-based policies. But in Reid Crowther & Part-
ners Ltd. v. Simcoe & Erie General Insurance Co., 99 D.L.R.
(4th) 741 (Can. 1993), the Supreme Court of Canada set forth
general principles for interpreting insurance contracts that
direct courts to the language of the particular insurance
policy:
In each case the courts must examine the provisions of
the particular policy at issue (and the surrounding cir-
cumstances) to determine if the events in question fall
within the terms of coverage of that particular policy....
In each case, the courts must interpret the provisions of
the policy at issue in light of general principles of inter-
pretation of insurance policies, including, but not limited
to:
(1) the contra proferentem rule;
(2) the principle that coverage provisions should be
construed broadly and exclusion clauses narrowly; and
(3) the desirability, at least where the policy is ambig-
uous, of giving effect to the reasonable expectations of
the parties.
Id. at 751-52.
Examination of the language in the Insurers' policies indi-
cates the appropriateness of applying a continuous trigger.
The Halifax policies cover "occurrences" and define an "oc-
currence" as including "a continuous or repeated exposure
during the Policy Period to a condition or conditions which
__________
polices determines what state law should apply. See Mut. Life Ins.
Co. of N.Y. v. Johnson, 293 U.S. 335, 339 (1934); Northwestern
Mut. Life Ins. v. McCue, 223 U.S. 234, 248 (1912); Mut. Life Ins.
Co. of N.Y. v. Cohen, 179 U.S. 262, 264 (1900).
The instant appeal, however, does not present the occasion to
decide whether Liberty Mutual correctly characterized District of
Columbia choice of law rules because it is unnecessary to engage in
a conflict of laws analysis.
result in injury to or destruction of property neither expected
nor intended from the standpoint of the Insured." Similarly,
the American Home policy covers "accidents" and defines
"accident" as including "continuous or repeated exposure to
conditions which results in property damage neither expected
nor intended from the standard point of the Insured." The
plain terms of these policies support application of the contin-
uous trigger where, as here, the exposure to the damaging
excessive chloride ions was continuous in nature. Although
the Insurers, like the district court, take the position that
there was only a single exposure that caused continuous
damage, this characterization of the nature of the damage is
belied by undisputed evidence describing the damage. That
evidence showed that the damage was the result of continued
exposure to excessive chloride ions that migrate through the
concrete, and that the initial exposure to the chloride ions
thus resulted in continuous exposure to those same ions as
they migrated through the concrete and slowly corroded the
steel.
In addition, the language of the New Hampshire policies
also indicates the appropriateness of applying the continuous
trigger. The New Hampshire policies cover "physical injury
to or destruction of property which occurs during the policy
period," and define "occurrence" as including "injurious expo-
sure to condition which results, during the policy period, in
bodily injury or property damage neither expected nor in-
tended from the standpoint of the Insured." The district
court interpreted this language as setting forth an exposure
trigger. Yet the policy language provides that it is the
property damage and not the exposure to it that must occur
during the policy period. The language is thus consistent
with the continuous trigger theory, which defines damage
broadly to include the entire process of damage from expo-
sure to manifestation when the damage is of a continuous and
progressive nature. Cf. Keene Corp. v. Ins. Co. of N. Am.,
667 F.2d 1034, 1045-47 (D.C. Cir. 1981).
Even if the Insurers' policies might reasonably be read
differently, the contract interpretation principles set forth by
the Supreme Court of Canada point to application of the
continuous trigger. First, the policy is to be construed
against the drafters. See Reid Crowther, 99 D.L.R. (4th) at
751-53. Neither Halifax, nor New Hampshire, nor American
Home contend in their brief that the contra proferentem rule
is inapplicable to its policy because it did not draft it. Nor do
they contend that the language of the policies was imposed by
statute. Second, even if there is doubt as to which party
drafted the policies, the coverage provisions are to be inter-
preted broadly. Id. Thus, under Canadian principles of
contract interpretation, the court is to interpret the policies to
maximize coverage, which also points to application of the
continuous trigger theory.
This result is consistent with the law of Ontario, which
recognizes a continuous trigger theory. In a case not cited
by either side in their briefs, an Ontario Superior Court judge
in Alie v. Bertrand & Frere Construction Co., No. 2104-1992,
2000 A.C.W.S.J. LEXIS 56664 (Ont. Sup. Ct. Apr. 17, 2000),
provided a thorough and persuasive analysis of the relevant
considerations in applying trigger theories. In Alie, the court
considered which of the four triggers to apply for coverage of
property damage consisting of continuous deterioration of the
foundations of homes caused by the use of fly ash in the
concrete. Id. at *19-*20, *190-*91. The court rejected the
exposure theory as being inconsistent with the language of
the policies. Id. at *194. The policies provided coverage for
property damage occurring during the policy period. Id.
Because the damage was continuous, the court rejected limit-
ing coverage to only the policy that covered the period of
exposure. Id. The court rejected the manifestation theory,
as being inconsistent with the policies' language, which focus-
es on the damage and not the discovery of the damage. Id.
at *198. The court approved of the injury-in-fact theory
because it was most consistent with the language of the
policies. Id. at *199-*200. Nonetheless, recognizing the
practical difficulty of determining when the damage actually
occurred because it was progressive over time, id. at *200-
*01, the court adopted a combination of the injury-in-fact and
the continuous triggers, applying the principle that "[a]ll
carriers who were on the risk from the inception of harm to
the time the loss was no longer contingent should be liable to
the insured." Id. at *203 (quoting Zurich Ins. Co. v. Trans-
america Ins. Co., 34 Cal. Rptr. 2d 913, 922 (Cal. Ct. App.
1994), superseded by 38 Cal. Rptr. 2d 345 (Cal. 1995)); id. at
*205-*06. The court reasoned that because the injury was
ongoing, this combined approach was necessary in order to
apportion the damage equitably over time, id. at *204, that
this theory was most consistent with the policy language, id.
at *206, and that this theory was consistent with the intention
of the parties, id. at *204-*06.
The Insurers' post-argument submissions do not persuade
us of any reason to doubt the Alie judge's analysis of Ontario
law. First, although Alie is a trial court decision currently on
appeal, that it represents persuasive authority as to which
trigger Ontario law would apply is reflected in International
Comfort Products Corp. v. Royal Insurance Company of
Canada, No. 99-177332, 2000 A.C.W.S.J. LEXIS 48324 (Ont.
Sup. Ct. Mar. 20, 2000), in which another Ontario trial judge
had previously adopted the continuous trigger, reasoning that
the continuous nature of the damage made it difficult to
determine when damage occurred during the policy periods.
Id. at *12. The Insurers' attempt to distinguish Internation-
al Comfort as applying only to the broader duty to defend
rather than the duty to indemnify misses the mark. They
rely on St. Paul Fire and Marine Insurance Co. v. Durabla
Canada Ltd., 29 O.R. (3d) 737 (Ont. Ct. App. 1996), in which
the Ontario Court of Appeals held that because the duty to
defend is broader than the duty to indemnify it was unneces-
sary to determine which trigger to apply in determining
whether there was a duty to defend. Id. at 739. However,
the court in International Comfort was not deciding whether
the insurers had a duty to defend; the insurers conceded this.
Int'l Comfort, 2000 A.C.W.S.J. LEXIS 48324, at *11. Rather,
the question before the court was how to apportion the costs
of the defense among the insurers. Id. at *11-*12. Indeed,
the court distinguished Durabla on this ground. Id. Thus,
although International Comfort involved the duty to defend,
there is no indication in the opinion that, in determining
which trigger to apply, the court viewed the insurers' duty as
being any broader than in an indemnity case.
Second, contrary to the Insurers' contention, Alie does not
conflict with Sullivan Entertainment Inc. v. General Acci-
dent Assurance Company of Canada, No. RE 7657/97 1998
Ont. Sup. C.J. LEXIS 482 (May 29, 1998), an Ontario trial
court opinion rejecting the manifestation trigger. Id. at *17-
*21. The damage in Sullivan was not of a continuous and
progressive nature and hence was complete before the insur-
er came to the risk. Thus, the court had no occasion to
consider whether to apply the continuous trigger. See id. at
*1.
Third, Alie is not suspect, as the Insurers maintain, for
failing to adopt the holding in Cansulex Ltd. v. Reed Sten-
house Ltd., 1986 A.C.W.S.J. LEXIS 30665 (B.C. Sup. Ct. Mar.
10, 1986), which the Insurers characterize as adopting the
exposure trigger. Although Cansulex held that the damage
began upon exposure, triggering coverage, id. at *61, *72-
*74, it did not have occasion to determine whether the
continuous process of damage would have also triggered
coverage under future policy periods, and thus is not inconsis-
tent with the adoption of the continuous trigger.
Fourth, although the Insurers urge this court in both their
brief and post-argument submissions to follow the district
court in relying on University of Saskatchewan v. Fireman's
Fund Insurance Company of Canada, No. 2172 1997
A.C.W.S.J. LEXIS 161238 (Sask. Ct. App. Oct. 10, 1997), in
which the Saskatchewan Court of Appeal overturned the trial
court's adoption of the manifestation theory, id. at *29, we
decline to do so. The court of appeal held that the policy
language did not support the manifestation theory because it
refers to damage during the policy period and not the "dis-
covery" of damage, id. at *23; that the manifestation theory
is inconsistent with the concept of risk because it allows
coverage even though the process of damage begins and the
ultimate damage becomes inevitable before the insurer comes
on the risk, id. at *25; and that if an insurer covered damage
that occurred before it came on the risk, such coverage would
be in the nature of warranty and not indemnity, id. at *27. University of Saskatchewan is distinguishable from the in-
stant case in a material way. Although it involved continuous
and progressive damage, id. at *5-*6, the damage was com-
plete before the insurer came on the risk, id. at *20, causing
the court to reject application of the continuous trigger
theory on this factual basis. Id. at *20. By contrast, the
damage at issue, while inevitable from the date of Beer's acid-
etching of the concrete panels, continued through the policy
period of each of the Insurers. The court of appeal's rejec-
tion of the manifestation theory as contrary to the concept of
risk is inapplicable where unknown and continuing damage
occurs during the policy period. Because in University of
Saskatchewan the damage did not progress into the policy
period, it provides no guidance as to whether a continuous
trigger should apply. Indeed, the court of appeal stated in
University of Saskatchewan that all four trigger theories
were not before it; rather, it was considering only whether
the manifestation trigger theory should apply. Id. at *19-
*20. Moreover, whatever the merits of this case may be for
the Province of Saskatchewan, the University of Saskatche-
wan is not binding authority for the highest court of Ontario.
R. v. Wolf, 2 S.C. 107 (Can. 1974). The appellate court of
Ontario is only bound by decisions of the Supreme Court of
Canada, id., which has not expressly adopted the exposure
trigger. Nor have the Insurers suggested why it would be
prudent to rely on the Supreme Court of Canada's non-merits
dismissal of the appeal in University of Saskatchewan as an
implicit approval of its holding.
Nothing in the cases from the Supreme Court of Canada,
the courts of Ontario, nor any relevant statute indicates that a
continuous trigger theory is disfavored in Ontario. Further-
more, the Supreme Court of Canada has stated that insur-
ance policies, to the extent they are ambiguous, are to be
construed against the insurers and broadly in favor of cover-
age. Accordingly, in light of Ontario law and the language of
the policies, where the nature of the damage is continuous,
the continuous trigger applies.
B.
Our analysis of District of Columbia law is to the same
effect. In Wrecking Corporation of America, Virginia, Inc.
v. Insurance Company of North America, 574 A.2d 1348 (D.C. 1990), the D.C. Court of Appeals adopted the manifesta-
tion trigger as a general rule, noting that "the prevailing rule
is that 'property damage occurs' at the time the damage is
discovered or when it has manifested itself." Id. at 1350. Relying on this holding in contending that District of Colum-
bia law applies a manifestation trigger, the Insurers fail to
observe that in Wrecking the D.C. Court of Appeals recog-
nized an exception to this general rule when the damage to
the property can be characterized as "continuous or progres-
sive." Id. Unlike in Wrecking, in which there was no
evidence that the property damage was of a "continuous and
progressive" nature, the evidence of Beer's negligence estab-
lishes that the corrosion caused by the exposure to excessive
chloride ions was of a continuous and progressive nature. As
such, this evidence suffices to bring the instant case within
the exception recognized in Wrecking. Accordingly, as under
Ontario law, District of Columbia law applies the continuous
trigger where the damage is of a continuous nature. Fur-
thermore, to the extent the language of the policies is ambig-
uous, District of Columbia law interprets ambiguities against
the insurers. Chase v. St. Farm Fire & Cas. Co., 780 A.2d
1123, 1127 (D.C. 2001). Thus, under District of Columbia law,
given the language of the policies and the continuous nature
of the damage, the continuous trigger applies.
III.
On appeal, the Insurers have pointed to no evidence to
create a dispute as to a genuine issue of material fact
regarding YWCA's evidence that the exposure to the chloride
ions occurred in 1980 and that the damage caused by the
excessive chloride ions began to manifest itself around
November-December 1989 or early 1990. Applying the con-
tinuous trigger to the Insurers' policies, there is coverage
under New Hampshire's policies, Halifax's policies, and
American Home's policy. Accordingly, we reverse the dis-
trict court's grant of summary judgment to these Insurers,
and remand the case to the district court to address their
claims that coverage is precluded by exclusions in the policies.
To the extent YWCA challenged the district court's exten-
sion of comity to the Quebec Court's resolution of YWCA's
claims against Kansa in its opening brief, YWCA contends
only that the district court acted contrary to the Ontario
Court's view that one court should decide all of the claims
against the Canadian insurers. No argument is made that
the Ontario Court's reasoning for staying Halifax's declarato-
ry judgment action was binding on the district court, and the
mere existence of this reasoning does not defeat the extension
of comity to the decision of the Quebec Court. The Quebec
Court considered all of YWCA's present claims on the merits,
and YWCA fails to point to a distinction between the United
States and Canadian justice systems that would weigh against
comity. See Clarkson Co., Ltd. v. Shaheen, 544 F.2d 624,
629-30 (2d Cir. 1976); see also Canada S. Ry. Co. v. Gebhard,
109 U.S. 527 (1883). Accordingly, we affirm the district
court's ruling on comity.
Finally, because the issues of whether the Insurers are
liable to YWCA for breach of their duty to defend and
attorneys' fees turn on the applicability of the policy exclu-
sions and the district court did not address these issues, we
remand these issues as well.