Lexington Insurance Company v. Abarca Warehouses Corporation

McENTEE, Circuit Judge.

In this diversity suit Lexington Insurance Company seeks recovery from a contractor, Abarca Warehouses Corporation, and its insurer, Great American Insurance Company, for a sum Lexington paid its insureds, Puerto Rico Industrial Development Corporation (Pridco) and Hilton Hotels International, as indemnity for damages resulting from a fire which occurred on their property allegedly as the result of the negligence of an Abarca employee.

The underlying facts may be summarized as follows. In April 1965 Lexington issued an all-risk policy to Pridco and Hilton covering any…