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AIG unit is not obliged to reimburse housing companies for special needs



An American International Group Inc. entity is not liable to harm an operator with special dispute resolution issues arising from physical abuse and death of one of its residents.

Mobile, Alabama-based New Way Out Corp., which provided residential services to customers with special needs under an agreement with the Alabama Department of Mental Health, distributed some of its services to three companies, according to Tuesday's decision by the U.S. District Court in Mobile. and Granite State Insurance Co. v. New Way Out, Corporation, et al.

The AIG unit Granitstaten had issued a policy according to which the subcontractors were also called insured. New Way lost its certification from the state agency in February 201

9 after three incidents of physical abuse involving subcontractors, including one in which a resident died after suffering serious internal injuries, according to court documents. subcontractors seeking compensation for the damage they have suffered as a result of its decertification. AIG provided defense to the subcontractors during a reservation of rights.

New Way Out reached an agreement to settle the disputes with the subcontractors for $ 3 million each, provided that New Way Out agreed to continue the collection from the insurance process. AIG "did not agree at any time to the settlement", the decision states.

AIG brought an action against the contractor and the subcontractors and requested a summary judgment. Following an initial decision against the insurer, the court agreed to grant a summary judgment after the insurer asserted additional reasons. their negligence and described it as an "insured agreement."

"The defendants have not provided any evidence that such an agreement exists, let alone the exact language of the agreement," the decision said.

The defendants also claimed that New Way was insured for "personal injury and advertising damage", which is covered by the policy. However, "the complaint did not allege even a remedy to imply any of the infringements covered", the decision to grant AIG a summary judgment was mentioned.

Lawyers in the case did not respond to a request for comment.

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