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WV Supreme Courtroom Denies Insurers’ Attraction in Chlorine Leak that Broken Plant



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A bunch of 12 insurance coverage corporations can not but enchantment a trial courtroom’s discovering that contamination exclusions didn’t bar protection for a chemical plant that was broken when 90 tons of liquid chlorine leaked from a ruptured rail automotive in 2016, the West Virginia Supreme Courtroom of Appeals stated this week.

“We conclude that the circuit courtroom’s orders aren’t last orders topic to enchantment at this stage of the proceedings,” the courtroom wrote in its opinion that was launched Thursday. Problems with causation and damages stay unresolved, the justices stated.


Nationwide Union Hearth Insurance coverage Co. of Pittsburgh, Allianz World Dangers, Ace American, Zurich American Insurance coverage and different insurers had appealed three orders from a Marshall County Circuit Courtroom decide stemming from the chemical spill, which despatched a cloud of chlorine gasoline over Natrium, West Virginia and compelled an evacuation of a whole lot of residents.

The chemical agency, Axiall Corp., had bought 13 all-risk insurance policies from the 12 carriers, every of which had subscribed to quota shares of the insurance coverage program, the courtroom defined.


The lately repaired rail automotive ruptured contained in the Axiall plant, inflicting as a lot as $400 million in corrosion and different injury to tools, in line with the chemical firm’s claims. The insurers denied the claims, noting that insurance policies excluded corrosion, defective workmanship and contamination. Axiall and Westlake Chemical Corp., which had bought the plant shortly after the accident, sued the insurers for breach of contract and dangerous religion.

The Marshall County decide agreed, granting partial abstract judgment to the chemical corporations. The decide, in a call that insurers strongly objected to, wrote that the insurance policies’ corrosion exclusions didn’t exclude corrosion injury from a loss, however solely excluded protection for claims the place corrosion was the reason for the loss. He additionally stated that defective workmanship exclusions barred restoration just for injury to the rail tank automotive, not for the injury to the chlorine manufacturing facility.


Lastly, the trial courtroom discovered that the contamination exclusions had been designed to handle solely environmental air pollution, “which isn’t what this case is about.” The insurers appealed these orders.

The state Supreme Courtroom discovered that the orders weren’t last and that the complicated litigation is continuous.


“The applicability of any of the coverage exclusions at situation, which is the main target of the declaratory judgment rely, depends on a willpower of causation, one in every of many points which aren’t but resolved on this case,” Justice William Wooten wrote in the opinion.

Though a Pennsylvania jury in a separate case determined in opposition to the rail-car restore agency awarded $6 million to Axiall and Westlake, different elements of the litigation are removed from over.


“Said succinctly, as a result of the information of this case are so complicated (we’re informed that greater than one million paperwork have been disclosed and exchanged through the discovery course of), as a result of the petitioners will nonetheless should litigate the breach of contract and dangerous religion claims no matter what occurs with the declaratory judgment declare, as a result of all three of the causes of motion are so factually and legally intertwined, and since vital factual and authorized points stay as to damages, piecemeal evaluation of any points by this Courtroom would serve solely to delay last decision of the matter, together with all claims and all defenses introduced by the events,” the excessive courtroom opinion reads.

Related: Rail Car Leak at the Axiall Plant Led to Safety Recommendations


West Virginia


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