The outcome of the city of Jackson’s lawsuit against Zurich American Insurance Co. for failure to cover city-owned buildings damaged by a 2013 hailstorm has yet to be determined.
The case is still tied up in court.
Last fall, Chief U.S. District Court Judge Daniel Jordan denied Zurich’s request to dismiss the case.
The city filed a complaint on Nov. 8, 2019 against Zurich in U.S. District Court for the Southern District of Mississippi, seeking a jury trial.
The complaint seeks a judgment of, from and against Zurich in an amount of no less than $11,577,753 and asks that Zurich pay any additional costs, expenses and damages to property incurred after Nov. 13, 2018, as a result of its actions plus any costs, expenses, attorneys’ fees and litigation expenses and all pre-judgement and post-judgment interest costs.
The city filed a claim on or about April 15, 2013 with Zurich for insured properties damaged by the hailstorm. Zurich had issued a policy to the city with a period of Aug. 15, 2012 to Aug. 15, 2013 for $225,485 in premiums.
After the hailstorm, Zurich provided advance payments in the amount of $2 million on or about July 30, 2013, but the city has not received payment for all damages insured by its policy, according to the complaint.
Zurich assigned Pete Hanrahan on or about April 9, 2013 to handle claims submitted by the city related to the storm and he assigned Madsen Kneppers Associates to assist with building damage review and assessment, according to the complaint. Hanrahan assigned VeriClaim to assist with claims adjustment of 21 damaged properties.
The city hired BBMK Contracting at Zurich’s urging to dry out and repair 16 of the damaged buildings, requiring immediate repairs at a cost of $8,213,410.25, according to the complaint. In December 2013, the city retained The Jones Group as project managers to oversee the repairs to damaged property and the Jones Group performed field damage assessment to more than 150 locations on Jan. 13, 2014.
On or about March 17, 2014, the Jones Group engaged professional contractors to perform “roof core; environmental, mechanical, and design. This is still an ongoing project,” according to the complaint.
Zurich performed an onsite statement of work inspection and verification of 20 properties on or about May 8, 2014, and on or about Aug. 11, 2014, Jones Group emailed a preliminary statement of work and estimated costs to repair properties to Zurich, according to the complaint.
On or about May 5, 2015, the city selected 12 locations to repair with repairs of less than $50,000 per location for roof repairs, according to the complaint, and the risk management division of the city attorney submitted its demand for a global settlement on or about Feb. 6, 2016.
The risk manager for the city of Jackson, Jones Group and Zurich met to review and discuss cost repair estimates on or about Oct. 16, 2016, and Zurich met to review and discuss estimates, according to the complaint. Discussion then began about a location by location settlement.
Various meetings about buildings and repairs were held from July 2017 through September 2017, and Hanrahan informed the risk manager of the city that would begin to put together an all-encompassing global settlement for the city’s consideration.
Zurich contacted the city’s risk management division and asked if the city would accept an offer of $1,712,201.48, according to the complaint, and the city’s risk manager sent a letter demanding $11,577,753.71 for a full and final settlement.
Zurich tendered a payment of $1,712,201.48 on or about July 11, 2017 to the city, and the city advised Zurich the amount paid would not be considered a final and full settlement, according to the complaint.
Zurich sent on or about July 11, 2018 correspondence to the city that stated if it did not respond with additional documentation to prove it was due more than the amount paid of $13,680,533.13 that the claim would be closed, according to the complaint.
On or about Nov. 5, 2018, Zurich issued a denial of any additional claims and advised the city it would “no longer entertain further claim submittals,” according to the complaint. Zurich cited as the basis for the denial a three-year limitations period contained within the policy.
The city responded on or about Nov. 13, 2018 to the denial and requested that Zurich reconsider its position and then on or about Feb. 4, 2019, the city advised Zurich that “any limitation in the policy and any tolling provision related thereto are in direct conflict with Mississippi law and are, therefore, unenforceable.”
The failure of Zurich to pay the claim has inhibited the city’s ability to make repairs, according to the complaint.