updated 09:25 pm EST, Mon January 23, 2012
Chicago case common in insurance disputes
An unusual arrangement between Apple, a nearby train station and the contractors who did work on both has resulted in a lawsuit from Colony Insurance against Apple, the Chicago Transit Authority and contractor Petter Construction Company over liability on an accident claim that originated when a woman slipped and fell in the construction area between the then-in-progress Lincoln Park Apple Store and the also-renovated subway station next door.
AppleInsider reports on the details of the case, which involve an agreement between Apple and the CTA that had the technology giant agree to pay for renovations for the North/Clybourn station immediately next door to the then-forthcoming Apple Store. Pepper Construction was chosen as the contractor to do the work. Pepper subcontracted a company called Gilco Scaffolding -- the company covered by Colony Insurance -- to set up shoring and scaffolding at the site. Apple and Pepper were named as "additional insureds," meaning they were also covered by Colony's limited liability coverage.
The dispute stems from when the agreement was executed. The additions went into effect on April 5th, 2010, but prior to that -- on March 17th -- a woman named Esther Gonzalez fell on the sidewalk of the site, resulting in a hip fracture. A filing with the district court shows that damages and legal fees in the Gonzalez civil claim, which has already been settled, exceed $75,000.
Apple, the CTA and Pepper sought to recover that money by filing a lawsuit against Colony Insurance after it denied the three organizations' claim for reimbursement, saying that the agreement was executed 19 days after the incident occurred. In response to the lawsuit, Colony has now filed its own counter-claim reinforcing its position and stating that CTA was never covered under the agreement at all.
Apple and the other parties are expected to say in court that they were misled on their exposure by Gilco. Colony Insurance will likely claim that even if their coverage protects Gilco, the addition of Apple and Pepper was not added until after the incident and thus those two companies don't have a valid claim. Disputes such as this one are routine between businesses and insurance companies.
As an interesting side note to the proceedings, the details of the contract between Apple and the CTA show that the $4 million deal granted Apple futture naming rights to the station (if CTA opts to rename it) and the option of buying out all the advertising space if the company desired. The finished design for the station (see below) complements the Apple Store and shows a 1940s-style influence. The Lincoln Park Apple Store opened on October 23rd of 2010 and faced a number of difficulties in the construction phase, including delays caused by the subway station renovations and the discovery of warped steel panels. [via AppleInsider]