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Dispute between Amherst and insurance company heard by state Court of Appeals

The state's highest court could end a long dispute between the Town of Amherst and an insurance company over who gets $3.13 million in interest from a settlement paid out after a 2002 accident in Amherst State Park.

The state Court of Appeals in Albany heard arguments Tuesday from attorneys for the town and Granite State Insurance Company.

The town in 2002 was insured under an excess liability policy issued by Granite State, when a contractor fell from the roof of a building maintained by the town at Amherst State Park and was seriously injured.

The worker won a $23.4 million personal injury judgment against the town. Granite State contributed its policy limit of $10 million and the town paid the rest, then they pursued an indemnification claim against the roofing contractor.

The contractor's insurer, State Insurance Fund, and the town settled the claim in 2013 for $31 million including interest. Of the $31 million, $17 million was paid to the town, and more than $10 million went to Granite State.

The remaining $3.1 million of the settlement became the subject of a new dispute between the town and its insurance company.

"They're claiming they're entitled to this interest," said Stanley Sliwa, the town attorney. "We're claiming it's ours."

Granite State sought to have the matter settled in arbitration, which was denied in State Supreme Court. But, an Appellate panel of the State Supreme Court granted Granite State's motion to compel arbitration.

The state Court of Appeals granted the town's request to have it review and reverse or affirm the Appellate Division's decision.

"If we're correct and we win, the case is over," said Sliwa. "There's a potential end to the litigation, depending which way they go."

The town was represented Tuesday by John G. Schmidt Jr. of the Phillips Lytle law firm.

The $3.13 million is being held in escrow until the case is resolved. Town officials said a ruling is expected in 30 to 60 days. Should the town receive the $3.13 million, it would be deposited in the town's litigation reserve fund, which pays for outside attorney's fees and judgments against the town in personal injury lawsuits.

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