Argonaut Insurance Co. (AIC), the town of Greenburgh’s insurance provider since 2015, is suing the town over whether the company is liable for covering a $26 million federal housing discrimination lawsuit. The lawsuit filed in 2016 involves S&R Development Estates, which acquired a 2.3-acre property at 1 Dromore Road to build multifamily housing.
“AIC seeks declaratory judgment that AIC has neither a duty to defend nor a duty to indemnify the defendants for claims asserted against them in either the S&R 2016 action or the S&R extinguishment action,” the Illinois insurance corporation wrote in court documents filed in U.S District Court on Oct. 1.
AIC stated in court documents that the company’s insurance policy doesn’t cover the town for the assertions made by S&R Development and that the litigation occurred more than a decade before AIC’s insurance became effective.
“It really pertains to coverage for the Dromore Road litigation. The litigation started in 2007 and we had a different carrier then. We were successful in that litigation and there was coverage. Then in 2016, you get this second litigation … but now you have Argonaut. So there’s been a dispute,” said Greenburgh Town Attorney Tim Lewis.
Lewis told the Inquirer the town is using Anderson Kill, a New York City-based firm, to mediate with AIC and a secondary primary insurer as well as two excess insurance companies on which company is responsible for covering the $26 million in punitive damages and outstanding attorney’s fees if S&R Development wins its case.
“There are settlement discussions going on,” said Lewis, who added that he would not elaborate further on the mediation.
AIC stated in court documents that, “as a matter of public policy, intentionally harmful conduct cannot be covered by insurance in the State of New York.”
Lewis said that a judge would need to determine whether the town’s conduct was negligent.
“There’s no factual basis one way or the other,” said Lewis.
AIC wrote in court documents that S&R Development alleged that the town engaged in a longstanding intentional effort to block the developer from the property since 2007.
According to Lewis, the town has spent $1.5 million in attorney’s fees on the cases involving S&R Development. Greenburgh Town Supervisor Paul Feiner, who is named in the suit, said that unlike the Fortress Bible Church case, where the town “had bad legal representation,” the town had “a decent chance at winning this [S&R Development] case.”
In 2013, the town’s insurance carriers stated they would not cover a $6.5 million settlement with Fortress Bible Church, a Mount Vernon-based parish that litigated successfully against the town for improperly reviewing and declining its building application. The burden of the suit has been borne by the residents of unincorporated Greenburgh since 2014 when a $5.5 million bond was issued to cover the cost of the settlement.
“Financially we’re in good shape,” Feiner told the Inquirer. “Every municipality in the country gets sued, there’s always cases; there’s things that you win, there’s things that you lose. Realistically we’re probably going to get the insurance on this … this is not a make or break for the town when you look at everything.”