Court Upholds $10.7M Judgment against 2 Kemper Affiliates

August 19, 2009

A New York construction firm has won a $10.7 million judgment – plus interest – against two Kemper-affiliated insurers that failed to indemnify and defend the company when a subcontractor accidentally touched off a blaze that destroyed a Manhattan synagogue in 1998, a federal appeals court has ruled.

The decision by the U.S Court of Appeals for the Second Circuit affirms the decision by the U.S. District Court that Turner Construction was covered by liability policies issued to the subcontractor, Trident Mechanical Systems, by American Manufacturers Mutual Insurance Co. (AMMIC) and Lumbermens Mutual Casualty Co. (LMCC)

The fire at Manhattan’s Central Synagogue destroyed the building, which was revered as one of the city’s architectural landmarks. It took three years to rebuild the synagogue, which re-opened in September 2001.

The decision means that LMCC — Trident’s excess insurer — will pay $9.75 million and AMMC will pay $945,000 to resolve the case. The decision also includes pre-judgment interest of 9 percent per year.

The court also upheld the U.S. District Court’s ruling that the companies breached their duties to defend Turner in the case and that the construction company was therefore entitled to recoup reasonable attorneys fees and legal costs.

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