WATER WARS: City Wins Insurance Claim

Arlington County Circuit Court Judge Joanne F. Alper has ruled that the Virginia Municipal Liability Pool (VMLP) is legally obligated to defend Falls Church City in the lawsuit brought by the Fairfax County Water Authority (FCWA).  Accordingly, VMLP must pay the City’s rising legal fees and costs, which continue to be incurred as a result of the lawsuit.

VMLP, the City’s insurance provider, had denied coverage for the claim to cover legal defense costs.  A trial will be set for 2010 to determine the City’s total damages caused by VMLP’s failure to defend, if necessary.  

The Virginia Municipal Liability Pool is a tax exempt, public entity pool of Virginia local political subdivisions that provides liability coverage to approximately 340 members with an annual premium of about $35 million.  The Pool is maintained by the Virginia Municipal League.

The current cost of the litigation to the City is unknown.  However, in mid-August the plaintiff’s counsel stated in Court that FCWA had spent over $1 million preparing for the upcoming trial on one count of the case and that the City likely had spent a similar amount. 

The decision on that count, which was tried in September, is pending.  Trial on three other counts is scheduled for February 2010.

A link to Judge Alper’s November 3 ruling will be posted when it becomes available.