The Metropolitan Transportation Authority confirmed it will pay $45 million in cash to settle a nine-year dispute with its primary insurer for claims brought against the agency during construction of the Metro Rail line system.
The settlement, which is due by Sept. 15, is the largest ever paid by the MTA, which has been hit by hundreds of millions of dollars in claims and losses in transportation funding during construction the multibillion-dollar transportation project.
The Business Journal previously reported that the suit would be settled in that range.
The payments will go to the agency’s former insurer, Argonaut Insurance Co., which paid $120 million on 2,440 claims for property damages and business losses caused by tearing up the streets and general ground movement during construction of the Blue, Green and Red Lines. The MTA originally filed suit, claiming the insurer unfairly canceled its policy in 1996.
Argonaut counter-claimed for reimbursement costs after the MTA stopped paying its share of the claims.
“We always knew they had a claim and knew it was coming,” Steven Carnevale, an assistant Los Angeles County counsel said in a previous interview with the Business Journal. Carnevale has said the MTA has built up enough reserves to pay the settlement.