CLARKSBURG – A Charleston-based law firm has settled a $41 million issue with a title insurer and avoided a trial.
Bowles Rice was facing a trial against First American Title Insurance Co. that was scheduled to begin Aug. 20 in federal court.
The case was about a title policy for a privately owned coal plant that sites on West Virginia’s border with Pennsylvania.
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Bowles Rice issued had issued a title insurance policy in 2007 on behalf of First American to a bank that was financing the $2 billion construction of Longview Power’s coal power plant near Maidsville in Monongalia County.
Contractors that helped build the plant filed several mechanic’s liens. First American said Bowles Rice should have mentioned the risk of liens before having First American add coverage for them in the $775 million policy.
First American reached a $41 million multiparty settlement in 2014 as part of the power plant’s bankruptcy. First American paid out the $41 million and then sued the law firm for a contract breach. Bowles Rice argued its indemnity under a 1994 agreement with First American was limited to $1,000.
Earlier this month, U.S. District Judge Irene Keeley denied summary judgment, but the parties reached a settlement on Aug. 16, just days before the trial was scheduled to begin. Terms of the settlement are confidential.
Robert Massie and Marc Williams of Nelson Mullins Riley & Scarborough in Huntington represented Bowles Rice. Both he and Thomas Heywood, managing member of the firm, declined further comment. First American was represented by Nicholas Capotosto of Brouse McDowell based in Akron, Ohio.
In another lawsuit, Keeley also recently limited the liability of Bowles Rice’s malpractice insurer ALPS to $5 million. That means any trial verdict over $5 million would have had to have been paid by the firm itself.
U.S. District Court case number 1:16-cv-00219
