A bankrupt copper mining company can more forward with a suit against Fireman’s Fund Insurance Co. to recover millions of dollars in legal expenses stemming from asbestos claims.

A Texas state court denied a motion for partial summary judgment by Novato, Calif.-based Fireman’s Fund, which argued that policy language “unambiguously” gave it sole discretion to decide if it wished to pay any legal expenses at all, according to the law firm of Anderson Kill & Olick, which represents Tuscon, Ariz.-based mining company ASARCO.

At issue in the coverage action is a determination of insurance coverage for past, present and future asbestos liabilities.

According to FFIC, legal expenses “incurred by the policyholder will be borne by FFIC only if they are incurred with FFIC’s consent,” the insurer claimed. Judge J. Manuel Banales of the 105th Judicial District Court of Nueces County, Texas, denied the motion.

The firm states that his ruling preserves for trial the important issue of FFIC’s obligation to pay ASARCO’s legal expenses, enabling ASARCO to pursue its claim for recovery of legal expensesin excess of policy limits. It could mean the recovery for ASARCO of millions of dollars of insurance coverage in addition to the $60 million combined limits of the insurance policies ASARCO bought from FFIC, the firm claims.

In March, the court granted partial summary judgment to ASARCO, on the position that an “asbestosis” exclusion in FFIC’s policies bars coverage only for asbestosis claims and does not bar coverage for claims involving mesothelioma, lung cancer, pleural plaques or any other asbestos-related disease.

“In March, the District Court ruled that the asbestosis exclusion is unambiguous,” said Rhonda D. Orin, managing partner in the law firm’s Washington, D.C. office, in a statement. “Now the Court has indicated that the “payment of expenses” provision is ambiguous.  Both rulings reflect the fundamental principle that policy language should be enforced as written.”

The case is ASARCO LLC, et al. v. Fireman’s Fund Ins. Co., et al.