Monday, June 13, 2011

Certain Underwriters at Lloyds v. NFC Mining, Inc.

Jun 10: In the U.S. Court of Appeals, Sixth Circuit Court of Appeals, Case No. 10-5232. Appealed from the Eastern District of Kentucky at Pikeville. After residents of Floyd County, Kentucky sued NFC Mining, claiming the company damaged their homes, Certain Underwriters at Lloyd's of London followed suit, literally. Underwriters filed a second lawsuit trying to establish that NFC's insurance policy did not cover the company's potential liability to the residents. The district court awarded partial summary judgment to Underwriters. The Appeals Court affirmed the district court ruling saying that NFC pursued only one point presented and failed to raise its other appellate arguments.
    In a brief 4-page opinion the Appeals Court said, "NFC first presses the one argument raised and rejected below -- that it reasonably expected the contract to insure against damage from coal dust and that the district court's interpretation of the insurance contract should have respected those expectations. The argument, which is premised on the language of a certificate of insurance Underwriters filed with a state agency, falters at both steps. NFC could not reasonably think that a certificate of liability insurance, as opposed to the insurance contract itself, would confer coverage for coal dust damages. NFC did not sign or approve the certificate; Underwriters filed the certificate with the State. Even then, moreover, the certificate says nothing about this issue. It does not mention the terms of coverage or the coverage limit, except to say that the policy's coverage is consistent with state law. Even had all of this not been true, even in other words if NFC had reasonably anticipated that the policy would cover damages caused by coal dust, the language of the exclusion defeats the company's claim (and expectation). We break no new ground in holding that the language of an insurance policy, not an insured's expectations, controls disputes over the meaning of a policy. In this instance the language of the exclusion is straightforward and inconsistent with NFC's position. . ."
    Access the complete opinion (click here). [*Air, *Energy/Coal]