A federal appeals court Wednesday affirmed a lower court ruling in favor of a Nationwide Mutual Insurance Co. unit in a litigation dispute with another insurer, in a case involving a worker who fell through an unguarded opening in a building’s second floor and sustained serious injuries.

The worker in the case, Eduardo Guzman, sued the property owner, Chicago-based Rockwell Properties, its manager, Chicago-based Prairie Management & Development and others in state court, according to the ruling by the 7th U.S. Circuit Court of Appeals in Chicago in Scottsdale Insurance Co. v. Columbia Insurance Group Inc.

The issue in the case is whether Mr. Guzman’s employer, Chicago-based TDH Mechanical, which was insured by Columbia, Missouri-based Columbia Insurance Group, owes a duty to defend Rockwell, which was insured by Nationwide unit Scottsdale Insurance, and Prairie. Rockwell and Prairie were named as additional insureds on Columbia’s commercial general liability policy, the ruling said.

Scottsdale has defended Rockwell and Prairie in the underlying suit, but Columbia refuses to defend then. Scottsdale wants Columbia to take over their defense and reimburse Scottsdale for the defense costs already incurred, according to the ruling.

The U.S. District Court in Chicago ruled Columbia owes a duty to defend Prairie and Rockwell and ordered Columbia to pay Scottsdale more than $50,000 in defense costs through August 2019, “leaving the issue of indemnity for another day,” said the ruling.

The lower court’s ruling was affirmed by a unanimous three-judge appeals court panel. “Columbia argues the underlying complaint does not allege any factors that bring the case even potentially within coverage by Columbia.  We disagree,” the ruling said.

“The underlying complaint specifically alleges Prairie and Rockwell ‘negligently failed to supervise, inspect, monitor and coordinate’” the subcontractor’s work on the construction site in order to protect the plaintiff from injury, it said. 

“TDH is potentially one of those subcontractors, the underlying suit suggests, and does not foreclose the possibility, that some fault lies with TDH,” as well as that any liability of Prairie or Rockwell “arises out of TDH’s then-ongoing operations performed for Prairie and Rockwell,” in affirming the lower court’s ruling.

Attorneys in the case had no comment or could not be reached.