Chubb units seek to dismiss $32.6m US jury verdict in coal case

Chubb units are asking a US court in Charleston, West Virginia to grant its summary judgment motion following a $32.6m jury verdict in connection with its failure to pay damages related to a coalmine silo collapse.

Ramaco Resources restarted mining facilities in Elk Creek, West Virginia, in 2012, employing nearly 300 workers, according to court papers in Ramaco Resources LLC v Federal Insurance Co and Ace American Insurance Co.

As first reported in Business Insurance, Ramaco obtained a mining industries insurance policy from Chubb unit Federal Insurance in 2018 that covered direct physical loss or damage as well as lost business income and extra expense.

In November 2018, a silo used to store raw coal prior to being transported by conveyor to a processing plant collapsed. The silo, which was holding about 800 tons of coal at the time, was damaged to the extent it was later necessary to tear it down, Ramaco said.

Chubb denied coverage in connection with the collapse. It stated that the losses were caused by wear and tear, planning design, materials or maintenance that were not covered under the policy, according to Ramaco, which filed suit against the Chubb units.

The $32.6m verdict issued on Friday comprised a $25m award for breaching the insurance policy, $3.3m for extra expenses, $3.8m for business income loss and $532,941 in pre-judgment interest.

The Chubb units filed a renewed motion for summary judgment the same day as the jury verdict.

The insurer argued in the motion that “aggravation and inconvenience damages are unavailable as a matter of law”. It also argued that the aggravation and inconvenience claims are precluded by a “failure of proof”, and that the insurers have been prejudiced because of a failure to plead and disclose damages “with specificity”.

Attorneys in the case did not respond to requests for comment.

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