Insurance Companies Not Required to Reimburse
Airport Payments Made to Settle Noise Lawsuit

MAY 10, 2001

A consortium of insurance companies is not required to reimburse the Toledo-Lucas County Port Authority and another insurance company for the payment of a $4.6 million settlement of a harmful noise lawsuit reached by the port authority in 1999.

The decision, which was issued in an order filed yesterday in U.S. District Court by Judge James Carr, means that the port authority cannot recoup $1.1 million that the agency had paid as its part of the settlement.

Coregis Insurance, based in Chicago, paid $3.5 million toward the settlement, then joined the port authority in the lawsuit in U.S. District Court seeking to recover the $4.6 million from the London-based consortium of insurance companies that had policies covering the port authority.

Brian Schwartz, manager of communications for the port authority, said in a prepared statement that the federal court ruling was being evaluated. "The port believes that its interpretation of its insurance policies is correct and will consider an appeal of the district courtís ruling." He wrote that there would be no comment beyond the prepared statement.

The $4.6 million settlement ended a legal battle that began in 1993 when the first of several lawsuits were filed by residents in the area of Toledo Express Airport, contending that the port authority was liable for damages caused by increased noise levels at airport.

The port authority-Coregis lawsuit contended that under a clause in the consortiumís policies insuring against "public officials liability," the other carriers should share in the payment of the settlement. Judge Carr ruled the clause only provides coverage for individuals named in a lawsuit.

In his order the judge wrote: "I find that the policy language defining public officials liability unambiguously requires a claim to be made against an individual or individuals whether the person or those people be an officer, commissioner, employee, or committee member of the port authority," but not the agency itself.

All the individuals named in the filings against the port authority were dismissed in 1995 and 1996 as defendants in those cases.

The consortium, known as the London Companies, as part of its coverage, paid for legal fees and expenses until the individual defendants were dismissed from the lawsuits.

The lawsuits by homeowners were filed in Common Pleas Court in Fulton and Lucas counties and contended they and their property were harmed by the operation of BAX Global at Express Airport. A ruling in Fulton County Common Pleas Court in April, 1999, found that the port authority was liable for harm caused because it had created a nuisance when it enticed the air cargo hub, then Burlington Air Express, to operate at the local airport.

The $4.6 million settlement was reached in September, 1999, before the case went to trial.

The only question that a jury would have decided was the amount of liability on the part of the port authority, which some had estimated as high as $10 million.

Source: Toledo Blade