A federal appeals court Tuesday affirmed a lower court ruling against a risk retention group that waited more than two years to seek a ruling disclaiming coverage in a construction worker’s death. 

In December 2015, Luis Alberto Pomboza Chicaiza was working on a construction project at a building owned by New York-based Ingrid House LLC when a wall collapsed, and he fell to his death from its fourth floor, according to the ruling by the 2nd U.S. Circuit Court of Appeals in New York in Golden Insurance Co. v. Ingrid House LLC. 

Ingrid House had a general commercial liability policy issued by Golden Insurance Co., a risk retention group incorporated in Nevada with its principal place of business Scottsdale, Arizona. 

The policy, under which Golden Insurance agreed to pay damages for bodily or property damage, included endorsements excluding coverage for earth movement and for work on the building’s exterior that was higher than three stories. 

After Mr. Chicaiza’s estate filed a lawsuit in state court in connection with his death, Golden Insurance issued a letter in January 2018 agreeing to provide a defense, but reserving its right to disclaim coverage. 

Golden Insurance filed suit in U.S. District Court in New York more than two years later in February 2020, seeking a declaration that based on the endorsements there was no coverage under the policy, that it could withdraw from defending the underlying lawsuit, and that Ingrid House must reimburse it for all fees, costs and expenses incurred in providing a defense. 

The district court ruled against the risk retention group and was affirmed by a unanimous three-judge appeals court panel. 

New York insurance law “requires a timely disclaimer of coverage in ‘insurance cases involving death and bodily injury claims arising out of New York accident and brought under a New York liability policy,’” the ruling said.   

“Here, Golden Insurance waited two years after learning of the underlying lawsuit to disclaim coverage for damages arising out of the accident, even though the record reflects that ‘the basis for the disclaimer was, or should have been, readily apparent’ by January 2018 if not earlier,” it said, in affirming the lower court ruling. 

Ingrid House attorney Neal Fellenbaum, of Zegen & Fellenbaum in New York, said the ruling was “absolutely correct. They did not abide by the law. They should have timely disclaimed years ago. They didn’t, and it caused tremendous prejudice to my client.” 

Golden Insurance’s attorneys did not respond to a request for comment.