A federal appeals court on Tuesday covered a lower court decision and ruled in favor of the Admiral Insurance Co. in disputes over a settlement reached in a case involving a railroad worker's injury.
In 2013, Long Island Railroad contracted with Merrick, New York-based Rukh Enterprises Inc. to complete a paint removal and repainting project on a railroad bridge at the Metropolitan Transit Authority in Queens, New York, according to Tuesday's judgment of the 2nd U.S. District Court of New York Century Surety Co. v. Metropolitan Transit Authority, Long Island Railroad, Admiral Insurance Co., et al.
Rukh hired a non – litigation painting company to work on the project because it was not certified to carry out lead-related activities. One of the subcontractor's workers was injured while working on the project, and he sued Rukh and LIRR for damages, according to the verdict.
An unsettled settlement was reached and insurers in the case, including the Admiral, who insured LIRR, agreed to pay a settlement amount. Meadowbrook Insurance Group Inc.'s unit in Westerville, Ohio, which had insured Rukh, refused to contribute on the grounds that it had no obligation to defend or indemnify any party to the case and brought an action in the U.S. District Court in New York that problem. The admiral objected and the lower court ruled in favor of the Century.
A unanimous appellate court with three judges set aside that decision. The insurance coverage provision was a "true surplus policy" and Century was not required to submit tenders until other available insurances, including Admirals, had paid below their insurance limits.
"The main issue in the appeal is which relevant agreement the term governs ̵
the former was the case. "In short, we conclude that under New York law, Century Surety, as Rukh's insurer, is obliged to pay the underlying settlement and clear its insurance limits before the Admiral, LIRR's insurer. "
Lawyers in the case did not respond to a request for comment.