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A federal appeals court reversed a lower court ruling Thursday and held that a Chubb Ltd. unit did not have to defend swine farms in a state court nuisance case, in litigation filed against it by two other insurers.
Chubb unit Indemnity Insurance Co. of North America, Ohio Farmers Group unit Westfield Insurance Co. and AmeriTrust Group Inc. unit Star Insurance Group had all at some point provided coverage to large-scale swine farms operated by Griggsville, Illinois-based Sandstone North LLC and Sandstone South LLC, according to the ruling by the 7th U.S. Circuit Court of Appeals in Chicago in Indemnity Insurance Co. of North America v. Westfield Insurance Co. and Star Insurance Co.
In May 2016, a jury ruled in Sandstone’s favor in litigation over private nuisance claims that alleged it had negligently mismanaged its facilities by improperly handling hog waste, which resulted in foul and offensive odors and toxic gases, among other charges.
The litigation focused over whether Indemnity was obligated to defend Sandstone. The three-judge appeals court panel’s ruling overturned a lower court decision that said Indemnity must pay a pro-rata share of defense costs.
“Because its insurance is excess over Star’s and Star has a duty to defend, Indemnity’s ‘other insurance’ provision relieves it of any duty to defend Sandstone” in the underlying action, the ruling said, in reversing the lower court.
Westfield and Star attorneys either did not respond to a request for comment, or had no comment, while a Chubb’s attorney referred a query to Chubb, which did not respond.