A federal appeals court has upheld a lower court ruling against a Swiss insurance company and ruled that it is required to contribute $ 4.5 million to a Wyoming refinery fireplace in 2013.
The fire caused Sinclair, Wyoming-based Sinclair Wyoming Refining Co. to limit operations for several months, according to Monday's ruling of the 10th U.S. District Court of Appeals in Denver . Sinclair Wyoming Refining Co. against Infrassure Ltd.
Sinclair filed a claim with its 18 insurance companies, including Zurich-based Infrassure Ltd., which jointly provided Sinclair with business interruption coverage for losses under an all-risk insurance policy, according to the decision.
But Infrassure did not agree with the settlement value and eventually exercised its right under the policy to have Sinclair's loss calculated by a panel of three assessors. The panel valued the loss at $ 60.4 million, with Infrassure responsible for $ 4.5 million, the ruling said.
Infrassure sought to annul the award in the U.S. District Court in Cheyenne, Wyoming, claiming that the assessors relied incorrectly on the settlement amount rather than independently assessing the loss.
The district confirmed the award, stating that the insurer had "failed to show any practicable misconduct to the assessors."
The district court's decision was upheld by a unanimous three-judge appeals board. "Overall, the assessment and communication between the panels do not reveal any lack of good faith, fraud or bias, or failure to comply with the terms of the policy and procedures. Consequently, the dividend cannot be set aside for the panel's alleged failure to assess the loss, "the panel said, confirming the decision of the Court of First Instance.
Lawyers in the case did not respond to a request for comment.