The Washington Times-Herald

August 8, 2012

2nd lawsuit may be necessary in levee fight

By Nate Smith
Washington Times-Herald

WASHINGTON — In the ongoing mess to clean up and fix the Bennington Levee, the Daviess County Commissioners and Council may have to sue its insurance provider.

In a joint meeting Tuesday morning, the commissioners unanimously voted to retain attorney Bruce Smith, along with county attorney Grant Swartzentruber, for future litigation against the county’s liability insurer, HCC.

Although the county currently settled a portion, it is also in litigation with three individuals and an insurance company for the breach of the Bennington Levee.

“That doesn’t mean a lawsuit will be filed, but we have the authority to if necessary,” Smith said.

The attorneys, after a meeting, said the insurer was not going to pay for a potential personal injury claim against the county.

“We’ve got a letter back from our insurance carrier saying there is an exclusion in our insurance policy that doesn’t cover the claim,” Smith said.

“We may have to file what is called a declaratory judgment against our own insurance company.”

A notice for the claim, Swartzentruber said, was sent to the county last year.

Paul Williams, the county’s insurance agent with the Hastings/Williams Agency,  confirmed the county was denied coverage of that specific claim. No other information on the claim was available, but the county wants to be ready in case there is a lawsuit.

“We’re not conceding liability, but if we are liable, we want the insurance company to cover,” Smith said. “We’re not buying the insurance company’s argument.”

The vote taken at Tuesday’s meeting is the latest in a string of legal action following the March 2011 levee break.

Last Tuesday, the commissioners and council accepted $445,000 from three residents and a construction company for a breach on the north side of the levee. Monday, the Bennington Levee Committee voted to accept the funding.

But the county is still suing defendants Don Villwock, Randall Brown, Cindy Lamar and Shepard Construction for the breach on the south side of the levee the county had to make to keep water from flooding portions of Maysville.

Smith said no negotiations have been scheduled for a settlement of the south breach, but they are waiting for construction bids to see what the costs will be. There are estimates up to $2 million.

A message was left with a representative of HCC, but Williams said the company may not be aware of possible legal action.

“Policies can be interpreted in several different ways. The county has elected to hire an independent attorney to look at the language,” Paul Williams said.

According to its website, HCC is a international insurance group with offices in the United States, the United Kingdom, Spain and Ireland.