Town Appeals Denial of Insurance for $11M Judgment Over Political Closing of Quarry

The Connecticut town of East Haven is appealing a federal district court ruling that rejected its claim for insurance coverage for a civil lawsuit and $11 million judgment against it regarding the closure of a local quarry in 2017 for political reasons. The $11 million was awarded to quarry owners who alleged that the town interfered with their operations through various regulatory measures before eventually shutting it down through a series of cease-and-desist orders in 2017. The quarry owners sought damages in excess of $25 million for actions by the town and its officials they say violated their federal and state constitutional rights. The town had two different liability insurers, Starr Indemnity and Liability, and Allied World Insurance. Both insurers disclaimed duties to defend and indemnify the town for the quarry owners’ civil case under the terms of their policies. The town sued to force the insurers to defend and indemnify it for the quarry owners’ lawsuit. In September, the federal district court for Connecticut granted summary judgment to the two insurers. The district court found that neither insurer breached a duty to indemnify or defend. In the case of Starr, the actions taken by the officials that closed the quarry were taken outside of the policy period. In Allied World’s case, an exclusion for claims related to the “lack of due process” barred coverage. On October 21, the town informed the court it would be appealing that district court decision and the final judgement to the Second Circuit Court of Appeals. The underlying action brought against the town, former Mayor Joseph Maturo, Jr., a zoning official and the town tax assessor by the quarry was filed in June 2017. The plaintiffs were John Patton, One Barberry Real Estate Holding, LLC and Farm River Rock LLC, who owned and operated a quarry in East Haven. According to their complaint, the town’s actions included reclassifying portions of the quarry as industrial land and taxing it at a higher rate than previously beginning in October 2015; informing Patton that blasting permits would not be granted in the months preceding the 2015 municipal election; and issuing three cease-and-desist orders between February and May 2017, the last of which instructed the owners to completely shut down their quarry operations. A federal judge in a bench trial concluded that the town and officials infringed on the quarry owners’ constitutionally protected property right in an arbitrary and irrational manner, in violation of their Fourteenth Amendment substantive due process protections. The judge awarded damages of $9,465,832. The quarry owners moved to alter the judgment and were granted prejudgment interest and attorneys’ fees and costs, bringing the total to $11,000,000. Was this article valuable? Thank you! Please tell us what we can do to improve this article. Thank you! % of people found this article valuable. Please tell us what you liked about it. Here are more articles you may enjoy.