Opinion ID: 1058146
Heading Depth: 2
Heading Rank: 3

Heading: the accident and resulting lawsuit

Text: Thomas Stinson and Robert Bruce were employees of Amtech assigned to the elevator project. Stinson and Bruce were working on a scaffold in an elevator shaft on January 15, 2001, when the scaffold collapsed and they plummeted to the bottom of the shaft. Stinson died and Bruce sustained serious injury. Stinson's estate and Bruce sued Uniwest and others in Pennsylvania. [4] PMA, Uniwest's principal insurer, notified Amtech that Uniwest and PMA expected it to defend and indemnify Uniwest against the Employees' lawsuit. ABM retained a Pennsylvania attorney, Richard Hohn, to determine whether the Subcontract required it to defend and indemnify Uniwest. Hohn determined that Paragraph 10 of the Subcontract was valid under Pennsylvania law but noted that the Subcontract was governed by Virginia law. He opined that the provision was valid under Virginia law as well. Based on Hohn's opinion that Amtech had a duty to defend and indemnify Uniwest, ABM directed him to negotiate the terms of Uniwest's defense with PMA. PMA retained its own counsel, Joseph Gibley, for the negotiation. Thereafter ABM agreed to defend and indemnify Uniwest pursuant to the terms and conditions of the Subcontract. PMA accepted the offer and ABM retained James Lynn to be Uniwest's counsel with day-to-day control of Uniwest's defense. [5] In July 2005, ABM notified Continental and AIU that Lynn and Hohn expected the Employees to demand damages exceeding $20,000,000. AIU subsequently informed Lynn that it had not joined in ABM's agreement to defend and indemnify Uniwest. ABM objected, contending that AIU had been informed of the accident as early as 2001 and was aware that ABM had agreed to defend and indemnify Uniwest for more than a year. In November 2005, Continental informed AIU that litigation expenses already had exhausted Amtech's self-insured retention and were eroding coverage under the CNA Policy. Continental determined that the AIU Policy umbrella coverage was exposed and tendered the remaining coverage under the CNA Policy to AIU. Soon thereafter, AIU notified ABM, Lynn, and Gibley that it considered Paragraph 10 of the Subcontract void under Virginia law and reserved its rights under the AIU Policy, asserting that there was no Insured Contract which required it to cover the defense and indemnification of Uniwest. [6] Nevertheless, AIU retained Robert Devine as counsel to participate in the defense of the Employees' lawsuit. Although Devine undertook some defense responsibilities in preparation for trial, Lynn remained lead counsel for Uniwest. Lynn also participated with Gibley in settlement conferences; Devine did not. By February 2006, AIU had ignored repeated demands from ABM, Uniwest, and Uniwest's insurers to participate in settlement discussions and fulfill what they asserted to be its contractual obligation to defend and indemnify Uniwest. At that time Uniwest and its insurers settled the Employees' claims against Uniwest for $9,500,000.