Chartis challenges $58M verdict in environmental coverage dispute

CLARKSBURG, W. Va.—Chartis Inc. said it plans to ask a judge to set aside a $58 million jury verdict in an environmental coverage dispute that began more than 10 years ago involving a West Virginia gas station.

After a two-week trial, a Harrison County, W. Va., jury on Tuesday awarded the owners of a Hess Oil Co. gas station in Mount Storm $5,000 in compensatory damages and $53 million in punitive damages, according to plaintiff attorney Michael J. Romano, of Law Office of Michael J. Romano in Clarksburg.

Mr. Romano said the complex litigation began in 1998 when an oil spill was discovered in the vicinity of the Hess gas station operated by his clients. Suits and countersuits, including litigation involving an environmental cleanup company, ensued.

Mr. Romano said the Chartis units—Commerce & Industry Insurance Co. and Chartis Claims Inc.—contended that Hess Oil misrepresented the facts in its 1997 insurance application and that the company “duped” Chartis, an assertion he rejected.

Before the trial, Chartis offered a $100,000 settlement that his clients rejected because they “felt they need to be vindicated,” Mr. Romano said.

However, Chartis said it is asking the judge “to set aside a clearly erroneous jury verdict that awards compensatory damages unsupported by the facts and law and punitive damages that are clearly excessive and unjustifiable.

“The inarguable fact is we paid out 90% of the limits of the policy over a decade's worth of cleanup to a policyholder who did not provide us with material information when it took out its policy,” Chartis said in a statement. “The facts, law and justice do not support the jury's verdict."