By Daniel Brunty
The Webster Progress-Times
Webster County has been named a defendant in a lawsuit involving the insurance claim settlement on the fire-damaged courthouse.
Minnesota-based Atlantic Specialty Insurance Co. filed the complaint for declaratory judgment Feb. 10 in U.S. District Court in Aberdeen. The county had a commercial property and liability policy with the company when the courthouse burned in January 2013.
The courthouse was one of 10 separately scheduled locations covered under the insurance policy and its $6.19 million blanket coverage limit, according to the suit. No specific limit or value was assigned separately to the courthouse under the policy.
Atlantic Specialty, which is represented by Carroll Warren & Parker PLLC of Jackson, states in the lawsuit it has paid Webster County $2.32 million since the courthouse fire. This includes payments for building blanket coverage and business personal property that were made on an actual cash value basis; adjustment of this loss is ongoing.
The suit states that Atlantic Specialty was notified Aug. 23 that Webster County had retained the services of a public adjuster, Scott Favre, to assist it with its claim. Following his involvement in the loss adjustment, the plaintiff claims that Favre has submitted “hostile proofs of loss” on behalf of the county demanding that the insurance company pay Webster County the full policy limits on various coverage provisions.
“It is undisputed that Webster County has neither rebuilt nor replaced the courthouse as of the filing of this complaint, nor has Webster County incurred $6,193,000 in building costs,” the suit says. “Rather, it is Webster County’s contention that the courthouse is a total loss requiring the payment of the policy’s building blanket coverage limit under Mississippi’s Valued Property Statute. … Webster County continues to reserve its rights pertaining to this coverage issue, while simultaneously demanding the covered property be submitted to appraisal. … Atlantic Specialty submits that this is a coverage issue that must be resolved (before) appraisal.”
Atlantic Specialty, in its “request for relief,” asks the court to declare that:
• the Valued Property Statute does not apply to Webster County’s courthouse loss because it is covered by a building blanket coverage limit without a specified value for the courthouse individually, and because there was not a total loss of all property covered under that limit.
• Webster County is not entitled to payment on a replacement cost basis for any alleged covered property losses under the policy’s building blanket coverage or business personal property coverage until the county actually repairs or replaces such property.
• the policy’s ordinance coverage limit, extra expense coverage limit and debris removal coverage limit are limited to expenses actually incurred by Webster County under terms of the policy.
• outstanding coverage and claim adjustment issues are affecting the policy’s building blanket coverage, business personal property coverage, ordinance coverage, extra expense coverage and debris removal coverage, and any appraisal under the policy’s coverages is premature and should not proceed until all outstanding coverage issues are ruled upon and all claim adjustment issues are resolved.
The company is also seeking attorneys’ fees and costs in the civil action, which represents only one side of a legal argument.
The Board of Supervisors met with Favre and insurance attorney Tina Nicholson of Baker-Nicholson LLP of Houston, Texas, regarding the lawsuit Tuesday morning at the Doss Building. The supervisors wanted to meet with Nicholson to see if she would be able to defend the county, and voted to go into executive session to do so because the matter involved litigation.
After a 1½-hour closed session, the meeting was again opened. After a brief discussion, a motion was made to approve the hiring of Nicholson as the attorney to represent the county in Atlantic Specialty vs. Webster County, as well as in the courthouse insurance claim in the future. The board unanimously voted to hire her to represent the county.
This motion was followed by approval of another to hire Buchanan Meek Jr., who serves as attorney for the board, to represent the county in regard to both the lawsuit and the courthouse insurance claim.
Board President Pat Cummings had no comment about the suit beyond the action taken Tuesday morning. Supervisors meet again at 8:30 a.m. Friday.