Court Grants Duke Energy Discovery in Insurance Dispute

(CN) – A Superior Court judge in North Carolina on Monday granted Duke Energy’s request to compel discovery of certain documents from insurers who have balked at covering the utility’s liabilities associated with new state laws and federal regulations related to coal ash.

Judge Louis Bledsoe III, who specializes in complex business cases, did not give Duke Energy everything it wanted in his ruling, but he did order the insurers to produce personnel lists, organizational charts, the exact working of the relevant policies and other information the utility hopes will reveal admissible evidence in the ongoing payment dispute.

Duke Energy believes that insurance policies issued to it through the mid-1980s may cover some of the costs to comply with new state and federal coal ash laws and regulations. In line with those beliefs, the utility filed claims  against more than two dozen insurance companies that, in the past, provided general liability insurance to Duke Energy Carolinas, Duke Energy Progress and their predecessor companies.

Since no insurer agreed to pay these claims, which could total hundreds of millions of dollars, Duke Energy filed a civil action in North Carolina Superior Court.”

But Duke’s insurers maintained they shouldn’t be held responsible for the claims. As a result, in October 2017, Duke filed a motion for discovery.

The insurers — Associated Electric and Gas Insurance Services Limited, Berkshire Hathaway Direct Insurance Co., a successor to American Centennial Insurance Co., TIG Insurance Co., a successor to Ranger Insurance Co. and, United State Fire Insurance Co. — opposed the motion, but in his ruling, Bledsoe says the matter is now “ripe for resolution.”

Although the judge granted the several of Duke’s requests, including information on how the insurer’s handled prior environmental claims, he denied other portions of the request finding the information requested would  be of little or no relevance to its case against the insurers.

Bledsoe denied Duke’s request for the defendants to produce information on environmental claims prior to 1987 because the undue burden out ways the minimal relevance that could possibly be produced.  He also did not order the defendants to produce prior private and public positions they have taken on policy provisions as Duke requested.

While Duke argued some of the policy language is ambiguous, Bledso said the level of ambiguity is for the court to determine and any ambiguity will be construed in Duke’s favor.

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