The Charter Oak Fire Insurance Company v. Liberty Mutual Fire Insurance CompanyThe Charter Oak Fire Insurance Company v. Liberty Mutual Fire Insurance Company
This declaratory-judgment action aims to resolve disputes about Defendant Liberty Mutual Fire Insurance Company’s obligations under an insurance contract. The parties submit that two of these disputes are ripe for adjudication: (1) “[t]he date on which Liberty Mutual[’s] . . . duty to defend A.L.L. Construction arose,” and (2) “the amount of defense costs and fees incurred by [Plaintiff] The Chartеr Oak Fire Insurance Company . . . in its defense of A.L.L. Construction that Liberty Mutual may be required to reimburse .” ECF No. 22, at 1.
BACKGROUND
A.L.L. Construction, Inc. is the general contractor for a construction project in Huntington, West Virginia. ECF No. 1, Compl. ¶ 19. A.L.L. subcontracted West Virginia Pаving, Inc. (WVP) to provide paving for the project. Id. ¶ 20.
After construction began, a woman named Charlottee Smith allegedly fell and was injured due to A.L.L. and WVP’s negligent work. See Compl., Ex. 4 ¶¶ 13–14. She sued both businesses in West Virginia state court. Compl. ¶ 27. After Smith and WVP settled, WVP was dismissed from
As part of A.L.L.’s subcontract, WVP agreed to maintain liability insurance coverage for itself and A.L.L. See Compl., Ex. 3 §§ 3.A.7, 3.B. WVP purchased insurance from Defendant. See Compl., Ex. 2, at 13.1 The insurance policy covers “any person or organization for whom” WVP is “pеrforming operations when [WVP] and such person or organization have agreed . . . that such person or organization be added as an additional insured . . . .” Id. at 1663. The policy only covers such entities up to “the amount. . . [r]equired by [their] contrаct or agreement” with WVP. Id. at 1664.
Under the policy, Liberty Mutual agrees to defend insureds from suits seeking covered damages. ECF No. 25, Def.’s Resp., Ex. A 33.2 Liberty Mutual also agrees to defend “an indemnitee of [an] insured” if both the indemnitee and the insured are named as parties to a covered lawsuit and provided certain conditions are met. Id. at 41. One such condition is that “[t]he indemnitee and the insured ask [Liberty Mutual] to conduct and control the defense of that indemnitee against such ‘suit’ and agree that [Liberty Mutual] can assign the same counsel to defend the insured and the indemnitee . . . .” Id.
ANALYSIS
Defendant argues it has nо obligation to reimburse Plaintiff for costs it incurred defending A.L.L. See Def.’s Mem. 1. Such costs, it explains, constitute supplementary payments under the policy because A.L.L. is WVP’s indemnitee. See id. at 5–6; ECF No. 32, Def.’s Surresp. 3.
Plaintiff claims “A.L.L. is not an indemnitee for the purposes of the Supplementary Payments” because it is an insured. ECF No. 28, at 2; see id. at 3. Indeed, the policy seems to contemplate that an “indemnitee” will not be one of the policy’s insureds. It conditions Liberty Mutual’s duty to defend an indemnitee on “[t]he indemnitee and the insured аsking [Liberty Mutual] to conduct and control the defense of that indemnitee . . . .” This suggests the “indemnitee” and “insured” are two different entities. Since A.L.L. is a covered insured, see ECF 1, Ex. 2, at 1663, the Court agrees that A.L.L. is not an “indemnitee” as the term is used in the policy.
One district court has reached a similar conclusion. In Roy Anderson Corporation v. Transcontinental Insurance Company, the court addressed whether a party was an “indemnitee” under an insurance policy. See 358 F. Supp. 2d 553, 562 (S.D. Miss. 2005). Because a provision of the policy made the party an “additional insured,” thе court concluded the party was not an “indemnitee.” See id. at 562–63.
Defendant also argues A.L.L. is an “indemnitee” under the policy because it is an indemnitee under its contract with WVP. See id. at 3. As Defendant points out, the policy only covers A.L.L. to the extent WVP must provide cоverage. In Defendant’s view, this means A.L.L.’s status as an indemnitee under its contract with WVP carries over to WVP’s insurance poliсy. The Court is unpersuaded. Nothing in A.L.L.’s contract with WVP circumscribes WVP’s duty to provide coverage in the way Defendant suggests. Therе is no provision, for example, stating WVP need not provide coverage unavailable to “indemnitees” under the tеrms of its insurance policy.
Since A.L.L. is not an “indemnitee” under the policy, costs and attorney’s fees incurred defending A.L.L. are not “supplementary payments.” Accordingly, the policy obligates Liberty Mutual to pay for defense costs and fees Plaintiff incurred before Liberty Mutual assumed A.L.L.’s defense. See Syl. Pt. 1, Aetna Cas. & Sur. Co. v. Pitrolo, 342 S.E.2d 156 (W. Va. 1986).
CONCLUSION
The Court DECLARES that Liberty Mutual’s duty to defend A.L.L. arose once Ms. Smith sued A.L.L. It further DECLARES that Liberty Mutual may be required to reimburse The Charter Oak Fire Insurance Company for any defense costs and fees Chartеr Oak incurred defending A.L.L. from Ms. Smith’s action.
The parties have indicated an additional dispute between the parties remains but will not be ripe until Ms. Smith’s claims against A.L.L. are resolved. See ECF No. 22. Accordingly, the
The Court DIRECTS the Clerk to send a copy of this Order to counsel of record and any unrepresented parties.
ENTER: July 20, 2026
ROBERT C. CHAMBERS
UNITED STATES DISTRICT JUDGE