A W.R. Berkley Corp. unit may be obligated to provide insurance coverage to a logging company that is being charged with overlogging, according to a federal court ruling in a dispute that hinged on whether Vermont or New Hampshire insurance law prevails.

Plum Creek Maine Timberlands L.L.C., now a unit of Federal Way, Washington-based Weyerhaeuser Co., which owns thousands of acres of forestland, hired Colebrook, New Hampshire-based WeLog Inc. to perform logging on several stands of trees on its property, according to Tuesday’s ruling by the U.S. District Court in Rutland, Vermont, in Acadia Insurance Co. v. WeLog Inc. et al.

During inspections that occurred while the logging was taking place in 2010, the State of Vermont informed Plum Creek that three stands had been overlogged and it was no longer eligible for a property tax program that reduced its taxes.

Plum Creek was assessed a $7,861 land use change tax, while its ineligibility for the program meant its yearly property tax assessment would increase by $191,000 a year for five years.

Extensive litigation ensured, which eventually led to a Vermont Supreme Court ruling against Plum Creek.

Meanwhile, Plum Creek filed suit against WeLog, alleging it was responsible for the overlogging. WeLog then sought coverage from its insurer, Westbrook, Maine-based Berkley unit Acadia.

Acadia filed suit seeking a declaratory judgment it is not obligated to indemnify WeLog and that Vermont law applies.

An issue in the litigation is whether Vermont or New Hampshire law should apply in interpreting the insurance policy, with WeLog seeking a ruling that New Hampshire law applies.

“According to the parties, the choice of law is significant because under New Hampshire law, an insurer must seek a declaratory judgment that it has no duty to defend or indemnify its insured within six months of the suit which gives rise to the question … while Vermont law imposes no such requirement,” said the ruling, which does not provide precise details of the dates involved.

Acadia said WeLog has been registered to do business in Vermont since 1991, among other arguments, said the ruling.

But the court ruled New Hampshire law applies.

“It is clear that the ‘principal location’ of WeLog’s logging operations was in New Hampshire,” said the ruling.

“The fact that the liability at issue in the underlying dispute arose in a state other than New Hampshire, or that the parties knew that some risk would occur in other states, does not change this analysis,” said the court, in ruling New Hampshire law applies to the insurance policy’s interpretation and granting WeLog’s motion for partial summary judgment.