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West Virginia high court upholds Wells Fargo Insurance ruling

Wells Fargo

The West Virginia Supreme Court has voted unanimously to uphold a lower court ruling rejecting a charge that West Fargo Insurance Services of West Virginia Inc. should be held liable for “negligent procurement of appropriate insurance.”

“The Court finds no substantial question of law and no prejudicial error” in the lower court ruling in the case, said the Charleston, West Virginia-based court in Monday’s ruling in Mine Temp LLC v. Wells Fargo Insurance Services of West Virginia Inc.

Wells Fargo was acquired by Valhalla, New York-based USI Insurance Services LLC in 2017.

Morgantown, West Virginia-based Mine Temp LLC had an independent contractor agreement it entered into in 2007 that provided apprentice miners to a coal mine operated by Philippi, Wes Virginia-based ICG/Wolf Run Mining, according to the ruling.

The agreement required Mine Temp to obtain commercial general insurance with a combined $1 million limit and Mine Temp to indemnify, defend and “save harmless” Wolf Run from claims relating to its work, as that term is defined in the agreement. The agreement expired on April 2008. Mine Temp purchased a CGL policy from Chubb Ltd. unit Chubb Custom Insurance Co.

On May 30, 2008, a Mine Temp employee was fatally injured when a Wolf Run employee backed over him with an end loader while the worker was working at a mine owned and operated by Wolf Run. The worker’s estate filed a workers comp claim against Mine Temp and a civil action against Mine Temp and Wolf Run in state court in connection with the accident.

Chubb denied coverage in connection with Wolf Run’s cross claim on the basis of its policy’s “Employer’s Liability Total Exclusion.”

Mine Temp then filed suit against Chubb and Wells Fargo alleging it was entitled to coverage, and that Wells Fargo had a duty “to act with reasonable care and prudence in obtaining the appropriate insurance” for Mine Temp.

Chubb filed a motion for summary judgment based upon the exclusion, which the court granted, and which has not been appealed.

The state court also found the independent contractor agreement between Mine Temp and Wolf Run had expired on April 30, 2008, before the accident, “and that there was no evidence showing the parties had agreed to continue with the agreement after it expires. “ This ruling also was not appealed.

In the current action, Wells Fargo filed a motion for summary judgment against Mine Temp on Mine Temp’s negligence charge, which the lower court granted. This was upheld in Monday’s ruling.

It said because the agreement had expired before the accident, “Mine Temp’s claim that Wells Fargo was negligent in its procurement of insurance coverage for an expired ‘insured contract’ is moot.”

Attorneys in the case could not be reached for comment.


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