The Capital City Convention Center Commission accused its insurer of trying to weasel out of paying a claim for massive hail damage that occurred during a 2023 storm.
Federal insured the convention center from July 1, 2022 to July 1, 2023. A severe thunderstorm and hailstorm struck downtown Jackson on March 26, 2023. The complaint states the media reported the storm produced hail measuring "2 to 2.5 inches in diameter." The hail damaged the roof as well as HVAC units, signs, and other features of the building.
The Convention Center immediately reported the damage to Federal as required by the insurance policy. The insurance company sent someone to investigate the damage claimed. The complaint alleges the investigator, Cliff Bishop, only examined 1,700 square feet, less than 1% of the total roof area. Bishop determined the roof indeed suffered hail damage. He ruled the damage could be "locally repaired" instead of replacing the roof.
The plaintiff accuses Bishop of failing to inspect the entire roof nor did he provide any engineering analysis. Federal eventually paid the Commission $607,615, substantially lower than the estimate provided by its own consultant, J.S. Held ($867,615 (RCV)/$777,227 (ACV)).
Unsatisfied with the payment, the Commission hired Cornerstone Public Adjusting to determine the actual loss. Cornerstone in turn retained a professional engineer, Dr. Anurag Jain, to complete a forensic investigation.
Dr. Jang reported there were an average of over 13 hail strikes per 1,000 feet. Extrapolating this to cover the entire building meant the convention center suffered over 25,000 hail strikes. The complaint states:
34. Dr. Jain documented widespread hail impact damage to: (a) metal flashings and parapet cap trim; (b) rooftop HVAC units, where hailstone impacts bent, flattened, and in some instances tore the condenser fins; (c) metal wall cladding panels on multiple elevations, showing impact marks, dents, and coating damage; (d) curtain wall mullion covers and aluminum framing components; and (e) the custom LED signboard, which sustained broken components from hail strikes. 35. Based on the extent, pattern, and severity of the damage caused by the Loss, Dr. Jain concluded that: (1) the hailstone impacts damaged the roofing system membranes and underlying reinforcement, compromising the roofs' UV protection and allowing moisture infiltration; (2) the storm damage shortened the roofing system's remaining functional life; and (3) complete roof replacement was necessary to prevent further water infiltration and structural damage.
Cornerstone estimated the cost of repair at $8.3 million (RCV) and $7.8 million (ACV), a far cry from the $607,615 payment. Dr. Walker said the roof could not be replaced through localized patching but instead must be replaced in full.
Predictably, Federal refused to pay the amount claimed by the Convention Center. The insurer tasked Bishop to provide another report. Bishop allegedly reported there was "limited hail damage" and he "could not attribute the hail damage to any particular storm" despite the verification of the hail storm even though his earlier report (allegedly) said otherwise.
Federal formally denied the claim in January. The insurer claimed the roof damage was caused by normal wear and tear while other damage was caused by a 2015 hail storm.
The complaint charges Federal with breach of contract, negligence and bad faith. The Commission seeks compensatory damages of $10 million or less as well as attorney's fees.
The case is assigned to U.S. District Judge Kristi Johnson.
6 comments:
Hope they get it. Insurance companies are the devil.
Anyone know why the city hired a law firm from Tennessee to represent it?
Two thoughts:
1. Did some jackass really file this with every other page being blank?
2. There were no Mississippi firms available to take this case? It got farmed out to a Tennessee firm?
Replace the entire roof? Just another Jacktown shakedown.
A prominent insurance defense lawyer on the Coast once told me that there are no entities more corrupt, greedy, and evil than the insurance companies. That didn’t stop him from representing them since they pay so well.
So is the convention center a separate entity than the City of Jackson? If so, I never realized that.
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