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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

ACE Unit Sued On Complaint That It Reneged on Agreement

Mar 2, 2015 - An engineering firm has sued Westchester Surplus Lines Insurance Co. after the ACE Group insurer allegedly backed out of a deal to shoulder millions of dollars of expenses tied to a workplace injury complaint.

Woodard & Curran Inc. and its insurer, Continental Casualty Co., sued Westchester and Cate Street Capital Inc., of Portsmouth, N.H. Cate Street, a venture capital firm that specializes in energy, forestry and reclamation projects, was effectively the owner of the Red Desert Water Treatment and Reclamation Facility, in Rawlins, Wyoming.

Cate Street had hired Woodard & Curran to advise it on ways to improve processes at Rawlins, which was reclaiming and treating water used at nearby oil and gas fields. Both Cate Street and Woodard & Curran were sued in 2013 after two workers at the Rawlins facility were injured due to exposure to chemicals.

Woodard & Curran tendered its defense to Cate Street and demanded to be defended and indemnified. That demand was rebuffed on March 12th, 2014, but not, Woodard & Curran alleged, before Westchester-insured Cate Street had already agreed to pay for defense expenses.

Woodard & Curran invoked a dispute resolution provision in its contract with Cate Street, and in June 2014, the two sides agreed that Cate Street and Westchester-ACE would pay 85 percent of the first $3 million of any damages sought by the workers, and 100 percent of any amount beyond that level.

An attorney for ACE reportedly gave verbal approval to that deal. But three months later the matter was again in mediation, and by then ACE reportedly refused to acknowledge portions of the June agreement.

Woodard & Curran settled with the workers in September, with Continental Casualty to pay less than $3 million. Now, those two plaintiffs have sued Cate Street and Westchester, in U.S. District Court in Maine, claiming breach of contract.

Woodard & Curran, which is based in Maine, asked the court to order Westchester and Cate Street to abide by terms of the June agreement and to award damages to be proven at trial.

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