CHARLESTON – West Virginia American Water is suing Starr Indemnity and Liability Company after it claims the insurance company has refused to offer settlement money for claims against the company for the water crisis that occurred in 2014.
Starr is one of the insurance companies that covers WVAW in the case of lawsuits or claims against it and, when settlements reach $50 million or higher, Starr is supposed to cover those settlements.
WVAW filed the lawsuit on Oct. 28 in Kanawha Circuit Court, alleging that Starr has refused settlement offers.
Starr "refused to contribute its limits, or an amount anywhere close to its limits, to the settlement,” the complaint states.
WVAW claims Starr has breached its contract with the water company and has refused to commit to pay out during negotiations on their policy.
WVAW is represented by Thomas J. Hurney.
In the federal class action lawsuit, WVAW agreed to pay $126 million, while Eastman Chemical agreed to pay $25 million. Attorneys for both sides head back to court for a hearing on Nov. 14 to put the final touches on the agreement, including deciding on attorney's fees.
The state case is assigned to Circuit Judge Carrie Webster.
A tank at Freedom Industries leaked thousands of gallons of MCHM that got into WVAW’s treatment plant that was downstream.
It caused a “do not use” ban on the water for days for 300,000 people in nine counties across the state. Businesses had to shut down and residents had to obtain bottled water during the ban. Multiple residents became sick and were treated in emergency departments when exposed to the contaminated water.
Kanawha Circuit Court case number: 16-C-1650