Union Electric files $8 million suit against insurers

Steve Gonzalez Jan. 13, 2005, 5:45am

Gary L. Rainwater-Chairman and CEO Ameren Energy

St. Louis-based Union Electric is suing four of its insurance companies for more than $2 million each claiming the insurers breached contractual duties by only reimbursing small percentages of asbestos-related claims.

Defendants include American Automobile Insurance Co. (AAIC), Pacific Insurance Co., Royal Globe Insurance Co. and Royal Indemnity Co.

Union Electric, currently doing business as AmerenUE, claims it has been sued more than 120 times by plaintiffs seeking damages for asbestos exposure in UE’s power plants in Missouri and Illinois. According to the suit, most of the suits have been filed in Madison County.

The majority of plaintiffs are current and former employees of contractors who allege that they developed asbestos-related diseases from exposure to asbestos fibers at places they were sent to work, including locations in Madison County.

Exposure dates to asbestos range from 1946 to present in the various lawsuits, which allege negligence and failure to provide a safe workplace.

From Sept. 30, 1947, through Sep. 30, 1975, UE claims it procured Owners Contractors Protective (OCP) coverage from the defendants, to protect against lawsuits by independent contractors.

In the complaint, UE illustrates the problem by revealing various correspondence.

In a letter dated Mar. 12, 2002, UE provides notice of 12 of the 120 lawsuits brought against UE within the time frame AAIC provided insurance coverage for them, from Sept. 30, 1947, through Sept. 30, 1952.

A letter from AAIC dated May 9, 2002, agrees to participate in the defense of UE, subject to a reservation of rights, for all asbestos lawsuits brought against UE within the coverage period.

After requesting a clarification AAIC's terms, UE claims AAIC replied, “by participate, we mean American Automobile Insurance Co. will defend UE in the cases alleging exposure between Sept. 30, 1947, and Sept. 30, 1952, along with other insurance carriers.”

On Jan. 15, 2003, UE forwarded its post-tender defense and investigation cost invoices to AAIC with a detailed explanation of the invoices, requesting payment within 30 days. UE claims it has not been fully reimbursed.

Allegations against Royal and Pacific are similar according to the complaint filed.

The suit also seeks statutory damages and attorneys’ fees for the companies, alleging vexatious and unreasonable failure to pay UE's defense and investigation costs in asbestos litigation.

UE is represented by Karen Baudendistel of Armstrong Teasdale in St. Louis and Jill Berkeley of Schiff Hardin of Chicago.

The case has been assigned to Circuit Judge Daniel Stack.

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Organizations in this Story

Armstrong Teasdale
411 Saint Louis Street
Edwardsville, IL 62025

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