Referring to the advice of the Mississippi Supreme Court, a federal appeal court has confirmed a lower court of court for a Swiss Re Ltd. entity in a dispute with an entity of Argo Group International Holdings Ltd. in a case that comes from a 2014 explosion.
An explosion in July 2014 at a facility owned by Houston-based Omega Protein Corp. killed an employee of Moss Point, Mississippi-based Accu-Fab & Construction Inc., according to court records in Colony Insurance Co. v. First Special Insurance Corp.
Omega was the said policyholder in two third-party insurance policies. Philadelphia-based Ace American Insurance Co. provided a primary commercial public policy of $ 1
In addition, Richmond, Virginia-based Argo Group Unit Colony provided a primary liability policy with a $ 1 million limit to the Accu-Fab. The policy contained an additional insurance clause.
In 2015, Omega called for Accu-Fab and Colony to defend and release it from any claims arising from the explosion. The colony brought an action before the State Court requesting a declaratory judgment on its coverage, but then agreed to fund Omaga's defense, subject to the reservation of rights, even though it said it did not believe its policy covered the incident.
At a settlement conference, Colony agreed to pay its $ 1 million political limit in exchange for Omega's release from the trial and demanded that First Specialty replace it for the entire amount it had contributed to the settlement.
The first state refused and litigation between insurers followed, with the US District Court in Gulf Port, Mississippi, ruled in favor of the first specialty.
The case was appealed to the 5th US Circuit Court of Appeal in New Orleans, where the Supreme Court of Mississippi was asked to decide whether voluntary payment doctrine, which prescribes that a voluntary payment cannot be recovered, was Colony excluded from becoming damaged.
The question was about Colony & # 39; s payment was voluntary if it took the position the insured was not covered by under his policy but still paid a settlement need to avoid potentially greater liability, according to them.
The Supreme Court of Mississippi said it was voluntary. "We refuse to accept Colony's argument that a payment is not voluntary if the payer acts compulsively to protect his own interests," the court said.
Referring to the Supreme Court, a three-judge fifth panel unanimously confirmed the Court's judgment in the first specialty's post on Friday.
"The colony claims that the Supreme Court of Mississippi actually surpassed by ignoring the fact that the colony had already adopted Omega's defense of the Taylor action and was therefore required to act in the Omega interest until the coverage issue
" The colony also claims that the court has Disregarding the fact that it was presented with a settlement contribution before the ruling of the State Court on its explanatory judgment and refusing to settle at that time would have led to an even greater verdict against Omega, "they said.
" We do not agree. The Supreme Court of Mississippi explicitly took into account these facts and still held that the conciliation had no coercion, the court said in the first specialty's favor.
Lawyers in the case could not be reached for comments.