A federal appeals court on Tuesday overturned a lower court ruling and ruled in favor of Admiral Insurance Co. in a dispute over a settlement reached in a case involving the injury of a railway worker.
In 2013, the Long Island Railroad contracted with Merrick, New York, Rukh Enterprises Inc. to complete a paint removal and repainting project on a Metropolitan Transit Authority rail bridge in Queens, New York, according to the ruling. Tuesday of the 2nd American Circuit. New York Court of Appeals in Century Surety Co. v. Metropolitan Transit Authority, Long Island Railroad, Admiral Insurance Co., et al.
Rukh hired a painting company, which is not a party to the litigation, to work on the project because it was not certified to perform lead related activities. One of the contractor’s workers was injured while working on the project, and he sued Rukh and the LIRR for damages, according to the ruling.
An undisclosed settlement was reached and the insurers in the case, including Admiral, which insured the LIRR, agreed to pay a settlement amount. The Century Insurance unit of Meadowbrook Insurance Group Inc., based in Westerville, Ohio, which had insured Rukh, refused to contribute on the grounds that it had no obligation to defend or indemnify any party in the case and brought an action in the United States District Court in New York on the issue. The admiral sued, and the lower court ruled in Century’s favor.
A unanimous formation of three judges of the court of appeal overturned this decision.
The panel said the lower court erred in concluding that under the wording of the Century policy’s “other insurance” provision, the coverage was a “true excess policy” and that Century was under no obligation to pay. payment until other available insurance policies, including the Admiral’s, have made payments below their policy limits.
“The main issue on appeal is which relevant contractual clause governs – the indemnification agreement in the underlying business contract between Rukh and LIRR or the ‘other insurance’ provision in the Century bond policy,” he said. -he declares.
The panel, overturning the lower court’s decision, said the former was the case. “In short, we conclude that under New York law, Century Surety, as Rukh’s insurer, is required to pay the underlying settlement and exhaust its policy limits before Admiral, the LIRR insurer.“
Lawyers handling the case did not respond to a request for comment.