U.S.: Chiquita loses insurance dispute appeal

January 06 , 2016

An Ohio appeals court has upheld a decision that produce group Chiquita Brands International will have to pay US$13 million to National Union Fire Insurance Co., which made payments to the multinational so it could defend Colombian terrorism-related legal claims. chiquita 1

The underlying cases alleged Chiquita aided and abetted terrorists in the South American country to support its banana operations.

The multinational, while admitting it made payments to the United Self-Defense Forces of Colombia (AUC), claims they were to protect employee safety.

In 2010, a trial court ruled National Union had a duty to defend Chiquita and the insurer made 16 defense cost payments and one interest payment.

This decision was overturned in 2013 though when the trial court determined National Union did not have a duty to defend Chiquita as the suits did not allege conduct that constituted an "occurrence" in the "coverage territory" defined by its insurance policy.

"Each defense cost payment, except one, was accompanied by a letter stating, in pertinent part, that National Union was reserving the right to seek reimbursement of the payments," Presiding Judge Sylvia Sieve Hendon said in the most recent decision on Dec. 30, 2015.

The Dec. 30 decision was split however, with Judges Hendon and DeWine affirming and Judge Stautberg dissenting.

"I respectfully dissent. National Union is not entitled to recover the payments it made to Chiquita, and I would reverse the judgment of the trial court," Stautberg said.

"Despite numerous National Union policies and provisions, there is simply no right to recoupment or reimbursement to be found therein."

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