In a move with direct implications for legacy asbestos coverage, the South Carolina Supreme Court has affirmed discovery sanctions and the court-appointed receivership of insurance assets held by Canadian company Atlas Turner, Inc.
The decision, filed on May 21, 2025, stems from a wrongful death suit brought by Donna B. Welch, the widow of Melvin G. Welch, who died in 2023 from mesothelioma. The claim alleges Mr. Welch’s asbestos exposure occurred while working in Greenwood, South Carolina, in the late 1960s and early 1970s—during which time Atlas Turner’s insulation products were allegedly used at the site.
Atlas Turner - described in the court’s opinion as still active and based in Quebec - moved to dismiss the case for lack of jurisdiction. After the trial court denied that motion, Atlas Turner refused to participate in discovery. It failed to produce a corporate witness under South Carolina’s Rule 30(b)(6), asserting that no current employee had relevant historical knowledge and that disclosing company records would violate the Québec Business Concerns Records Act (QBCRA).
The court strongly rejected those claims. It affirmed the trial court’s finding that Atlas Turner’s refusal to comply was “willful and intentional” and upheld the sanction striking the company’s answer and placing it in default. Citing precedent from both US and South Carolina courts, the justices emphasized that foreign blocking statutes like the QBCRA do not excuse a party from complying with valid American court orders.
Further, the court affirmed the appointment of a Receiver to investigate and collect Atlas Turner’s insurance assets—defined to include policies, proceeds, claims, and related information. However, it reversed a portion of the Receivership order that extended control to “any other assets which are related to, touch or are otherwise relevant to such insurance.” That language, the justices held, was too broad and not justified by equity principles.
Although the opinion does not detail specific insurance policy clauses, it leaves no doubt that insurance assets with the potential to respond to asbestos-related claims fall squarely within the court’s reach—especially when the defendant refuses to engage in discovery.
For insurers, the ruling underscores how courts may assert control over insurance coverage in asbestos cases - even when policyholders are based outside the US and resist participation. The decision also reinforces the judiciary’s willingness to impose receivership as a remedy to protect the interests of claimants when insurers or insureds attempt to avoid scrutiny.
With Atlas Turner now in default and its potentially responsive insurance assets under the management of a South Carolina Receiver, this case serves as a high-visibility example of how courts are handling complex cross-border insurance disputes in legacy liability claims.
