A policyholder has no right to object to a $ 1 million settlement reached by entities of American International Group Inc. and Zurich Insurance Group Ltd. In connection with a huge Louisiana sinkhole, a federal appeals court ruled Monday.
cases, which are part of a much larger dispute, involve the emergence of the Bayou Corne sinkhole in Assumption Parish, Louisiana, almost ten years ago, according to Monday's ruling by the 5th U.S. Circuit Court of Appeals in New Orleans in
. Dianne Sanchez et al. v. Texas Brine Co .; American Guarantee & Liability Insurance Co. et al.
In August 2012, a salt dome powered by the Houston-based Texas Brine collapsed, creating a sinkhole that has expanded to about 34 acres, devouring trees in its path and releasing methane gas, according to news reports.
Prior to the collapse, AIG and Zurich units had insured Texas Brine, which had carried out decades of salt mining operations in the area.
AIG and Zurich reached a $ 1
Texas Brines' objection to the settlement was denied by the U.S. District Court in New Orleans, which was upheld by a unanimous panel of three judges.
"Texas Brine has the right to oppose the settlement … only if it has suffered legal prejudice due to the settlement between the plaintiff and the insurer before 2012," the decision said.
The panel concluded that this was not the case. "Texas Brine has failed to show legal prejudice from the settlement agreement," the decision concludes.
“Texas Brine has not shown that it is entitled to insurance or reimbursement from insurers before 2012 for claims after sinkhole.
'The settlement therefore did not affect any such right. Texas Brine lacks to stand as a non-party to object to the settlement, "the panel said, dismissing the dispute.