(The following story by Joe Pinchot appeared on The Sharon, Pa., Herald website on February 3, 2010.)
SHARPSVILLE, Pa. — An insurance company has sued a local company saying Cattron-Theimeg Inc. violated an insurance policy by settling a lawsuit without the carrier’s consent.
Cattron-Theimeg, a subsidiary of Cattron International Inc., Sharpsville, was sued by CSX Transportation Inc. in response to a suit filed by a CSX employee, who was injured in a CSX rail yard in Louisville, Ky.
According to the suit filed by American International Specialty Lines Insurance Co. of Cook County, Ill., filed Jan. 28 in U.S. District Court, Pittsburgh:
John D. McLaughlin, a CSX conductor, was riding on a ladder of a locomotive, controlling it with a railroad remote control device made by Cattron-Theimeg, on Sept. 15, 2003, when the engine suddenly stopped. McLaughlin fell and suffered head, neck and back injuries.
McLaughlin claimed that the batteries fell out of the remote device, and the engine automatically stops when it loses communication from the controller.
He sued CSX and won a $2.3 million jury verdict on Sept. 5, 2008.
CSX had sued Cattron-Theimeg as a precaution in case it was found liable, and the companies settled for $2 million on March 6.
Cattron-Theimeg demanded that AISLIC pay $1 million of the settlement under terms of an insurance policy.
CSX said Cattron-Theimeg violated the policy by settling the suit without AISLIC’s consent. The railroad also said the policy does not cover bodily injury of anyone covered under the Federal Employers’ Liability Act, and claims that is the case under the McLaughlin suit.
CSX is asking that it not have to pay the settlement figure requested by Cattron-Theimeg.
In a letter between a Cattron-Theimeg attorney to AISLIC demanding payment, Traci S. Rea of Reed Smith, Pittsburgh, said AISLIC provided insurance coverage during the period of McLaughlin’s injury over and above the $1 million limit of a policy provided by Lexington Insurance Co.
Ms. Rea said Lexington balked at paying because of the FELA provision, but an arbitration panel ruled the provision did not apply.