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Best of Sean Whaley

Gaming Guru

Sean Whaley
 

Court Reversed Hilton Sign Ruling

12 November 2004

CARSON CITY -- The Supreme Court on Wednesday reversed a lower court ruling involving companies embroiled in a dispute over the collapse of the $5 million Las Vegas Hilton marquee sign on July 18, 1994. The court said United National Insurance Co. and Assicurazioni Generali S.P.A. do not owe defense and settlement expenses to Frontier Insurance Co. and Uriah Enterprises. That's because the collapse of 100 feet of the structure during a storm occurred after the effective date of an insurance policy.

Uriah was hired as a subcontractor by the John Renton Young Lighting and Sign Company to build prefabricated steel support components for the sign. At the time, Uriah was insured under a policy issued by United and Generali. The insurance agreement provided coverage from April 29, 1993, through April 29, 1994. When that policy expired, Uriah obtained new coverage from Frontier Insurance Co.

As a result of the collapse, lawsuits were filed against Uriah. The Fireman's Fund Insurance Co., which was an insurer of the Young Sign Co., filed a complaint naming Uriah as a defendant and alleging negligence in the building of the sign.

The Las Vegas Hilton also filed a complaint naming Uriah as a defendant. Uriah then asked both United and Generali to defend and indemnify Uriah, but the companies refused because the collapse occurred after the policy period. Meanwhile, Frontier defended Uriah.

Eventually, Frontier settled the lawsuits brought against Uriah by Fireman's Fund and Hilton for $250,000. The cost of investigating, defending, and settling the lawsuits was nearly $700,000. Frontier and Uriah then sought payment from United and Generali for the cost of the lawsuits, arguing the allegations of negligence against Uriah were broad enough to encompass an "occurrence" of "property damage," as defined by the insurance policy.

The district court ruled that the United and Generali policy language was ambiguous and that the firms should pay some of the costs. Frontier and Uriah were awarded $431,000 in damages for defense and settlement expenses. But the Supreme Court unanimously reversed the lower court, finding no allegations that the sign suffered any physical, tangible injury during the United and Generali insurance policy period.

"Rather, the complaints only alleged that the sign suffered physical, tangible injury when it collapsed on July 18, 1994, nearly three months after the United and Generali policy expired," the court said. Work began on a new $9 million Hilton sign in 1997.