Attorneys Myron Shapiro and Brooke Ehrlich Obtain Summary Judgment in Schindler Case

10.04.11

Plaintiff filed this breach of contract lawsuit against Schindler Elevator Corporation (“Schindler”), seeking to recover damages pursuant to a Coblentz Agreement Plaintiff entered with the County and final consent judgment entered  against Schindler. In the underlying lawsuit, Plaintiff alleged the County was negligent in failing to properly operate and maintain its airport escalator, and as a result was injured. Plaintiff did not sue Schindler in the underlying lawsuit and named the County as sole defendant.   By letter, the County demanded Schindler defend and indemnify it pursuant to the maintenance agreement.   Schindler responded with a request for information so that it could evaluate its obligations under the maintenance agreement. The County did not respond to Schindler's requests and instead entered into a Coblentz agreement with Plaintiff whereby the County admitted its liability for Plaintiff's damages and agreed to a settlement of over $95,000. The County and Plaintiff also entered into an Assignment and Transfer Agreement whereby the County assigned Plaintiff all of its rights against Schindler. Thereafter, Plaintiff sued Schindler for breach of contract, seeking to recover pursuant to the Coblentz agreement and consent judgment.

Coblentz agreements are only valid where (1) the damages are covered by the insurance policy; (2) the insurer wrongfully refused to defend; and (3) the settlement is reasonable and made in good faith. On September 30, 2011, Federal District Court Judge James Lawrence King granted Schindler's summary judgment motion and dismissed Plaintiff's Complaint with prejudice.

The Court found, as a matter of law, Schindler had not wrongfully refused to defend the County and held Schindler had no duty to indemnify the County as Plaintiff made no allegations of negligence against Schindler.