The Connecticut town of East Haven is appealing a federal district court ruling that rejected its bid for insurance coverage of a civil lawsuit and $11 million judgment against it over the politically driven closure of a local quarry in 2017. The town informed the court on October 21 that it will take the case to the Second Circuit Court of Appeals.
Quarry (Credits: Insurance Journal)
East Haven Quarry Insurance Appeal: Why Insurers Refused to Pay
The $11 million was awarded to quarry owners John Patton, One Barberry Real Estate Holding LLC and Farm River Rock LLC, who alleged the town interfered with their operations through regulatory measures before shutting the quarry down with a series of cease-and-desist orders in 2017. They had sought more than $25 million for violations of their federal and state constitutional rights.
East Haven carried two liability insurers — Starr Indemnity and Liability and Allied World Insurance — and both disclaimed any duty to defend or indemnify the town. In September, the federal district court for Connecticut granted summary judgment to both insurers: for Starr, the officials’ actions fell outside the policy period; for Allied World, a “lack of due process” exclusion barred coverage.
The $11M Quarry Judgment: What the Court Found
The underlying action, filed in June 2017 against the town, former Mayor Joseph Maturo Jr., a zoning official and the tax assessor, alleged reclassification of quarry land for higher taxation starting October 2015, denial of blasting permits ahead of the 2015 municipal election, and three cease-and-desist orders from February to May 2017 — the last ordering a complete shutdown.
A federal judge in a bench trial found the town infringed the owners’ constitutionally protected property right in an “arbitrary and irrational” manner, violating Fourteenth Amendment substantive due process protections, and awarded $9,465,832 — later raised to $11 million with prejudgment interest, attorneys’ fees and costs. The appeal now tests whether either insurer must foot any of that bill.
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Source: Insurance Journal — read the full story there.
