NU Online News Service, May 19, 2:24 p.m. EDT–At least two more proceedings will be held in the wake of Monday's toxic cleanup verdict in California against five insurers, an attorney said.
The Riverside County Superior Court panel found that the carriers on trial must provide funds for a multi-million dollar cleanup of a major Superfund waste site in Glen Avon, Calif. known as the Stringfellow Acid Pits.
Trial Judge Erik Kaiser, who is due to determine the amount that the carriers must pay has yet to set a date for the award, which lawyers said had the potential to go well above $50 million.
Insurers who must pay the State of California for the cleanup are: CNA, Wausau, Yosemite, Stonebridge Life Insurance Company and ACE, the successor to Horace Mann liabilities.
Robert Horkovitch, of Anderson Kill & Olick, a special counsel who led the state's team of attorneys, said there will be an appeal of a provision in the current state law which would limit the immediate recovery to a figure based on only one year of coverage or $50 million. In addition there will be a second trial for the insurers concerning charges of bad faith.
Mr. Horkovich said the state expects to spend $400 million to clean up the site, including $121 million already collected from insurers who have settled the case rather than go to trial.
Earlier this year, Lloyds of London and 15 other insurance companies settled with the state for $93 million. Three other firms settled in mid-trial for about $26 million.
CNA and Liberty, which purchased Wasau, did not respond to requests for comment.
The trial, which began with jury selection in mid-March, heard evidence from a string of underwriters and insurance executives.
At issue was whether the state was aware when the policies were issued that the site would cause problems and whether state officials made proper disclosures to the insurers.
Jeff Dollinger, an attorney who represented Yosemite, said the carriers "will certainly oppose" the state' appeal. According to his reading of the case, "There's a chance the state will receive no additional money."
He said that the actual financial impact of the verdict could end up being "inconsequential" compared to the amounts obtained through settlements. The parties in the case at trial, he said, stipulated that it involved "at least $50 million."
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