West Virginia Record

Sunday, August 18, 2019

Federal judge tosses Greenbrier lawsuit against insurance companies


By Kyla Asbury | Jun 5, 2019

CHARLESTON — U.S. District Judge Joseph Goodwin dismissed The Greenbrier’s lawsuit against dozens of insurance companies because the hotel failed to officially notify the companies of the lawsuit.

Goodwin noted in his June 3 opinion and order that it was clear the plaintiffs did not even attempt to show good cause for their failure to serve the defendants in a timely manner.

“As to the first factor, there is no indication that the delay in service was outside of the plaintiffs’ control,” his opinion and order states. “To the contrary, the plaintiffs have purposefully delayed serving the defendants in this matter in order to conduct settlement negotiations.”

Goodwin wrote that the plaintiffs did not act diligently and didn’t make reasonable efforts to effectuate service and, instead, focused their efforts on avoiding the process altogether.

Goodwin ordered that the lawsuit be dismissed without prejudice because the plaintiffs failed to show good cause for failing to serve the defendants within 90 days of filing the complaint.

On May 29, the plaintiffs asked for more time to serve the defendants—asking that they be given until July 1.

Counsel for the plaintiffs noted in the May 29 court filing that they weren’t aware of a tolling agreement involved until after they had filed the lawsuit in February.

“Upon learning of the Tolling Agreement Plaintiffs’ counsel invoked the termination provision of the Tolling Agreement, but Plaintiffs and Defendants have subsequently agreed to extend the termination date of the Tolling Agreement in order to allow the parties to attempt to resolve the matters at issue in the Complaint,” the filing states.

Goodwin filed an order on May 21 ordering the plaintiffs to explain why they hadn’t served the defendants.

The Greenbrier Hotel was suing the group of insurance carriers because it claimed the companies failed to pay for substantial insured losses from the 2016 flood. It filed the lawsuit back in February in the U.S. District Court for the Southern District of West Virginia.

The hotel claims after the June 23, 2016, flood, which caused catastrophic damage to the hotel and many of its properties, it filed insurance claims with the defendants.

The hotel claims because of the flood damage caused to Greenbrier properties, it caused the cancelation of the 2016 Greenbrier Classic PGA TOUR tournament and resulted in tens of millions of dollars of damages to The Greenbrier properties and operations.

The hotel made repeated requests to several of the defendants for copies of policies regarding coverage, but documents were not provided in a timely manner, according to the suit.

Greenbrier claimed for the last three years, they have attempted to amicably deal with the defendants to fully resolve all damage claims from the flood, but several insurers have not paid out premiums.

Vericlaim refused to cover the $6.1 million title sponsorship fee the Greenbrier lost when it had to cancel the 2016 tournament, has refused to cover more than $5 million in sponsorship fees the Greenbrier incurred and refused to cover the $10.4 million title sponsorship fee due to PGA America for the tournament, according to the suit.

The hotel claimed that the defendants did not act in good faith or timely or fairly pay the losses the hotel incurred.

"The Justice Family is fully committed to pursuing this litigation to the end in order to receive full compensation for the horrendous losses which resulted from the 1,000 Year Flood and the insurers’ failure to promptly pay what was due to The Greenbrier entities," a press release from the hotel stated.

The hotel claimed the defendants' actions denied the hotel from having the opportunity to fully profit from their businesses.

The Greenbrier is represented by Laurence J. Zielke and Janice Theriot of Zielke Law Firm.

U.S. District Court for the Southern District of West Virginia Case number: 2:19-cv-00118

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