BG Wins Appeal in Lawsuit Against Lloyd's of London

A BG litigation team won an appeal before the Commonwealth of Kentucky Court of Appeals on behalf of our client, Mega Highwall Mining, against insurer Lloyd’s of London. The team was comprised of partner and Practice Area Leader Nicholas Johnson; partners Joshua Hammack and Travis Prince; and lawyers Savanna Jones and Christopher Smith.

In 2021, the firm’s client, Mega Highwall Mining, LLC, procured an expensive property insurance policy to cover its highwall mining equipment. In April 2021, the mountain fell in on the mining equipment worth millions of dollars, forever entombing it in the earth.  Mega made a claim to Lloyd’s, but Lloyd’s denied the claim, alleging that Mega had abandoned the mining equipment.  After the conclusion of discovery, both sides moved for summary judgment.  The trial court granted summary judgment to Lloyd’s of London, finding that the abandonment exclusion applied to the physical loss and thus precluded coverage on Mega Highwall’s claim. We then appealed.

On appeal, the appeals court agreed with Mega’s position. The appeals court held: “Although we agree that there is only one reasonable interpretation, we disagree with the court’s reading of the exclusion and its conclusion that coverage was precluded. While abandonment can be a cause of a loss that would be excluded under the Lloyd’s policy, it was not the cause of the loss herein. Because the property was not abandoned, regardless of the fact that it was not returned to the surface, the abandonment exclusion does not apply.” 

We look forward to a speedy resolution of the case upon remand.

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