Casino Insurers Want Contractors To Pay For $81M
Law360, New York (March 21, 2014, 1:24 PM ET) — Three of a Joliet, Ill., riverboat casino operator’s insurance carriers on Wednesday sued architects, engineers and other contractors on a kitchen renovation project, saying they share responsibility for a 2009 fire and the resulting $81 million in coverage payouts.
In their complaint in Illinois court, National Fire and Marine Insurance Co., Lloyd’s Syndicate 1414 (Ascot) and Axis Insurance Co. are bringing subrogation claims based on their policies covering Empress Casino Joliet Corp., a Pennsylvania-based operator of an Egyptian-themed casino on the outskirts of Chicago.
A 2009 fire that originated in the buffet kitchen left the casino itself untouched but destroyed large portions of the nightclub, steakhouse and ballroom it serviced. National Fire doled out $64.2 million and Ascot $7.1 million under their respective general property policies, while Axis paid $9.8 pursuant to a builders risk policy, according to the complaint.
Empress filed its own action against the contractors in 2012.
“Plaintiffs are filing this separate prophylactic subrogation action solely in order to preserve their subrogation rights against the defendants should there be any contention that Empress is not the proper party to be named as plaintiff on behalf of the interests of itself and of its subrogees,” the suit said.
Targeted in the suit were W.E. O’Neil Construction Co., the general contractor on the renovation project, and five other firms. A welder employed by subcontractor Jameson Sheet Metal Inc. allegedly sparked the blaze while fusing together a new piece of sheet metal ductwork to the existing ductwork for an exhaust hood on the kitchen’s ventilation system.
The inside of the duct was “coated, covered and caked” with 15 years’ worth of cooking grease and other combustible residue that ignited, the suit said.
According to the suit, the subcontractor should never have been allowed to do that work before O’Neil ensured that the building contained an adequate sprinkler system covering the concealed attic and truss space where the blaze quickly spread out of control.
The general contractor also allegedly neglected to follow other National Fire Protection Association standards, to maintain a dedicated “fire watch” professional on site while hot work operations were underway and to ensure that the proper fire control equipment was on hand.
“O’Neil knew, or failed to discover through reckless disregard, of the dangerous propensities of the work, that certain fire protection features were out of service which increased the risk of fire during construction, that there was inadequate clearance between the ductwork and combustibles, of the absence of a rated shaft around the ductwork, and of the absence of a [clearance] reduction system,” the complaint said.
Also named as defendants were Lindon Group, the the architect for the original construction of the casino and the 2008-2009 renovations; the renovations’ engineer of record R.L. Millies & Associates; sprinkler installer Global Fire Protection Co.; and Averus Inc., a kitchen-cleaning outfit that allegedly failed to clean out the ductwork properly.
Even though other structures in the complex were equipped with sprinkler systems, the building housing the buffet kitchen did not contain sprinklers in the concealed attic and truss space as required by building codes, according to the suit.
None of the defendants could be reached for comment Friday.
The insurers are represented by Mark A. Rabinowitz and Kevin P. Caraher of Cozen O’Connor, David E. Walker and Douglas W. Walker of Walker Wilcox Matousek LLP, and Samuel J. Pace, Jr. and Randy C. Greene of Dugan Brinkmann Maginnis & Pace.
Counsel information for the defendants was not immediately available.
The case is National Fire and Marine Insurance Co. et al. v. W.E. O’Neil Construction Co. et al., case number 2014L003223, in the Circuit Court of Cook County, Illinois.
Casino Insurers Want Contractors To Pay For $81M Fire – Law360.