Terrence L. Lavy and William Kratochvil (Ft. Myers, FL) (First Party Property) obtained a defense award in non-binding arbitration in Island Tower v. Citizens. Hurricane Irma made landfall as a Category 3 storm on Marco Island, FL. Island Tower is a six-floor commercial condominium with a window-wall design and the insured was under a wind-only policy. Plaintiff’s claim featured roof and window damage with resulting water penetration throughout the structure. The claim was timely reported, but upon investigation, it was determined that observed leaks were due to poor maintenance rather than storm damage. Although there was interior water damage, no storm-created opening was observed. Plaintiff had the roof resurfaced, calling it a temporary repair. Citizens denied the claim.
During the litigation, Plaintiff retained engineers and contractors to contradict the investigation. At arbitration, it initially sought $4.8 million, plus entitlement to attorneys’ fees and costs. We took these experts to task for faults in their evaluation of the property. We showed that plaintiff’s engineering opinions were not creditable because they did not perform adequate testing. Most compelling was that Plaintiffs’ damages assessments were grossly overstated. When this was proved at the arbitration, Plaintiff was permitted to submit a revised estimate. In response, we showed the arbitrator how, while the revised result was a lower total, the contractor actually increased its measurements and increased its unit pricing by 20% and more to maintain the maximum possible claim amount. The most egregious points were that: window pricing was doubled and while roof pricing increased 20%, scopes of work related to the roof were added. Finding in Citizens favor, the arbitrator opined that the contractor “would have to be significantly rehabilitated to convince me of the accuracy of their report(s).”
Since the arbitration was not binding, plaintiff submitted a motion for trial de novo. However, shortly afterward, the case settled for less than 3% of the original arbitration submission, including fees and costs.