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

Judge Orders Illinois Union to Pay $11.3 Million on Legal Defense Spat

Illinois Union Insurance Co. was ordered in February of 2012 to defend a former client being sued over environmental pollution claims. The question of indemnity for costs the client already had incurred was left open – until now.

Federal Judge James J. Brady, in Baton Rouge, Louisiana, has ruled that the ACE Group unit must pay $11.3 million in legal defense fees to Louisiana Generating LLC. It is owned by Houston-based NRG Energy Inc. and operates the Big Cajun II electric power plant in New Roads, Louisiana.

NRG had bought a pollution liability policy from Illinois Union that took effect in early 2009. Just three weeks into the policy, NRG was sued by the U.S. Environmental Protection Agency on the claim that remodeling work at the plant had caused improper increases in pollution emissions.

Illinois Union denied a duty to defend or indemnify the utility. In 2010, NRG sued Illinois Union in Louisiana federal court to try to force a defense from its policy issuer. Illinois Union maintained it had no duty to defend its client.

Both sides asked for a summary judgment. In a February 20th, 2012, issue of ACE Insurance Litigation Watch, it was reported that Judge Brady had ruled that Illinois Union did indeed have a duty to defend NRG. More than two years later, Business Insurance reports that the judge determined the amount that Illinois Union must pay to NRG.

Business Insurance noted that the case was a “highly contentious dispute.” After it was ordered to defend NRG, Illinois Union appealed the decision and it was eventually affirmed by the 5th U.S. Circuit Court of Appeals in New Orleans.

There was no immediate indication whether Illinois Union will appeal this monetary award decision.

Read More:

ACE unit ordered to pay $11.3M…  – Business Insurance -

Court Says Illinois Union can’t deny coverage … - ACE Insurance Litigation Watch -

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