Judge orders insurer to cover town's legal bills for discrimination case by developers of Greens at Chester

Nov. 7--A judge has ordered an insurance company to pay the Town of Chester's legal expenses for an ongoing federal discrimination case, resolving a coverage dispute that arose after two past insurers each denied responsibility.

State Supreme Court Justice Sandra Sciortino ruled last week that Allied World Assurance Company was obliged to pay Chester's legal expenses under its policy because Allied was the insurer when the developers of the 431-home Greens at Chester project sued the town last year.

Chester Supervisor Robert Valentine hailed the decision as a victory for the town's taxpayers on Friday, sparing them from legal bills that he estimated had totaled more than $200,000 so far. Allied, which is no longer the town's carrier, must reimburse the town and cover future expenses, he said.

"This is a big win for the town and the residents and the taxpayers, because they're not footing the bill for this," Valentine said.

Sciortino ruled that a previous insurer, Selective Insurance Company of New York, had no coverage responsibility for the discrimination case. Allied had argued that Selective should bear the expense because it was Chester's carrier during a previous lawsuit over the development plans.

The developers sued both the town and Orange County last year, arguing they had obstructed fully approved development plans to try to block an influx of Hasidic families. County officials recently settled the developers' claims against them, promising to defer to state agencies on decisions about drinking water while admitting no wrongdoing.

Town officials have denied the discrimination claims, and say they refused building permits strictly because the homes were larger than approved and the infrastructure work wasn't done. They have since issued permits for the first six homes in the project after the developers posted an $11 million bond for future infrastructure.

The case against the town is still pending in court. State Attorney General Letitia James joined the case on the developers' behalf last year, concurring with their discrimination claims.

cmckenna@th-record.com

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