Agenda

Back to Calendar Return

County Attorney's Report 9. 2.

BCC Regular Meeting

Action

Meeting Date:	08/06/2015
Issue: Dispute as to terms of coverage for all-perils property insurance covering CBD Facility for the explosion occurring on April 30, 2014
From:	Charles Peppler
Department:	County Attorney's Office
CAO Approval:

RECOMMENDATION:

Recommendation Concerning Dispute as to Terms of Coverage for All-Perils Property Insurance Covering Central Booking and Detention Facility for the Explosion Occurring on April 30, 2014.

That the Board take the following action:

A. Authorize the County Attorney’s Office to retain the law firm of Cheffy Passidomo to act as co-counsel in pre-suit negotiations and any ensuing litigation should an impasse be reached; and

B. Authorize the County Administrator to sign the contingent fee agreement and statement of client’s rights, copies of which are attached, to engage the law firm of Cheffy Passidomo.

BACKGROUND:

The County was insured by eight property insurers,¹pursuant to all-perils property insurance for a maximum of $45,000,000.00. A flood endorsement provided for compensation for damage from flood and rising waters with a sub-limit of $25,000,000.00. The property insurers with the flood endorsement (Primary and First Excess) have paid the $25,000,000.00 sub-limit for the three public buildings which were damaged by the flooding from the April 29th-April 30th, 2014 flooding event, which includes the Central Booking Detention Facility (CBDF). An explosion took place on the evening of April 30th at the CBDF causing extensive structural damage. All property insurers have denied coverage for damage from the explosion asserting that flooding caused the damage which has been paid. However, the County contends that the explosion is a separate loss, a second occurrence, and was caused by the ignition of natural gas that had leaked into and accumulated in the basement of the CBDF. The flood waters did not cause an ignition to occur. None of the policies had excluded explosion from the perils that would be covered under the policies. Therefore, according to prevailing case law interpreting an all-perils property insurance policy, explosion is a covered peril or loss.

The law firm of Cheffy Passidomo has set forth in their contingent fee agreement that they would be entitled to a contingent fee of 10% of any gross recovery which was agreed to pre-suit and that, if suit is necessary, the percentage of the contingent fee would increase to 20% of the gross recovery or the greater of court-awarded attorney’s fees. An additional 5% would be due in the event of an appeal. Costs would be paid by the County as billed on a monthly basis.

^{________________________________________

1 Attached is a listing of the insurers and the face amount of the coverage provided by each.}

BUDGETARY IMPACT:

N/A

LEGAL CONSIDERATIONS/SIGN-OFF:

The County Attorney's Office will be co-counsel with the Cheffy Passidomo firm.

PERSONNEL:

N/A

POLICY/REQUIREMENT FOR BOARD ACTION:

N/A

IMPLEMENTATION/COORDINATION:

N/A

Attachments
Escambia County Property Insurance Company Participation
Contingent Fee Agreement
Statement of Client's Rights