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More than eight years after an underground tunnel filled with water causing Chicago’s Loop Flood and major damage to downtown businesses, the legal fallout continues to meander its way through the court system. On Wednesday, a three-judge panel with the 7th U.S. Circuit Court of Appeals heard long-awaited arguments on a lower court ruling that the insurance companies involved owe $151 million to the company whose work on bridge pylons caused the flood, and another $29 million to the city. Great Lakes v. Continental Insurance Co., No 99-3777. One of the still unresolved, yet basic issues addressed by the attorneys was just which policies covered the catastrophic event in April 1992. Don Fowler, an attorney representing the Continental Insurance Co., said that while the city could collect money under a primary $1 million policy in effect when a pylon driven by Great Lakes Dredge and Dock Co. went into an underground tunnel beneath the Chicago River in Sept. 1991, businesses and companies damaged by the resulting flood months later could not. As Fowler explained it, in September 1991, Great Lakes had in effect a $1 million primary policy, a $40 million excess coverage policy, and a $60 million excess coverage policy. After the company was sold the next month, however, the two excess policies were canceled and replaced with new $40 million and $10 million excess policies. In contrast, last year, U.S. District Court Judge Joan Gottschall had found that all four excess policies could be applied to — and easily cover -� damages paid out by Great Lakes due to the flood. Duane Kelley, an attorney with Winston & Strawn representing Great Lakes, agreed with Gottschall’s earlier ruling. He interpreted key language in the policies as saying that they were all in effect both during the time the pylon hit the tunnel in 1991 and during the subsequent flood seven months later. “When there is an occurrence, an accident in policy period one, there is property damage in both (policies) and a trigger for both (policies),” Kelley said. Having heard the oral arguments, the jurists have yet to signal when their decision in the case will be announced. Written briefs have already been submitted to the court and, presumably, will be analyzed in the coming weeks. In July, the Chicago City Council approved a settlement of $21 million with 25 insurance companies and 120 businesses seeking damages related to the flood.

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