The Facts:
This case involved a $1,077,562 property damage loss for a commercial insurance client. The risk was a grocery store that suffered a large fire loss in June 2009 when it was alleged the adverse party technician left combustible material near the burner assembly of the hot water heater causing a subsequent fire.
The Challenge:
The client and adverse adjuster reached an impasse with negotiations prompting referral of this large complex loss to Spartan Recoveries. Investigation included obtaining surveillance video of the store which was uploaded and viewed from our platform. After viewing many hours of the surveillance video, we determined that we were not able to actually see the actions of the adverse party or anyone else near the hot water heater.
With limited evidence and just plausible scenarios that caused the fire, we likely would have settled in 2012 for about $350,000. Although the adverse adjuster hinted that he would settle this matter at $350,000, we realized the statute was rapidly approaching and with only verbal only comfort being provided by the adverse adjuster we sent the case out to our subro counsel, who filed suit and protected the statute.
The court reviewed the case and issued a case evaluation award of $700,000, stipulating that both parties had to agree to it, which the adverse party did not. A settlement conference was held in early June 2013, but the defense counsel showed up with no offer which infuriated the judge. During this period, the case likely could have resolved for around $500,000 due to conflicting testimony together with limited evidence, plausible loss facts and our engineer’s expert testimony.
The Outcome:
The turning point in this case was the testimony & reports from the original engineering company expert, who no longer worked there. This engineer worked with our counsel when exemplar testing was done on a hot water heater to help support our theory and cause of fire. This report and very favorable, and subsequent depositions improved our recovery potential greatly.
Through depositions and expert reports, we began to build a much stronger case that our attorneys believed could resolve for at least $600,000 – $700,000. In early September, counsel for the defense changed, and trial was set to go ahead early November.
New defense counsel tried to raise motions, now disputing the claim value itself, which our attorney was countered as they were never previously and timely presented. Defense counsel offered $200,000, which we rejected, followed by an increase to $600,000 and after much negotiation, the case ultimately resolved for $800,000.