Belleville business says insurer failed to pay full fire claim

A St. Clair County company says its insurance company owes it more than $450,000 for damages caused to its building after a fire. However, the insurance company is only willing to pay one-fifth of the damages caused to the building, according to the complaint.

Lavaland filed a lawsuit Feb. 8 in St. Clair County Circuit Court against Erie Insurance Exchange.

Lavaland claims it procured an insurance policy with Erie to cover its two-story commercial building located at 126 West A St. in Belleville.

On March 12, 2008, a roofing contractor unintentionally ignited and set the building's roof on fire, the suit states. The Belleville Fire Department arrived at the scene and extinguished the fire by drowning it with water, the complaint says. However, Lavaland claims the water used to put out the fire caused mold damage to the building.

After the fire, Lavaland contacted Erie adjuster Bruce Kaufmann, who told the company that Erie would attempt to have smoke-damaged wood repaired. If that proved impossible, then the adjuster promised to replace the wood, according to the complaint.

Kaufmann hired All Clean Restoration Services, which unsuccesfully attempted to repair the smoke-damaged wood with dry ice. Next, the adjuster hired Serve-Pro of Champaign-Urbana, which also unsuccessfully tried to treat the wood with soda blasting, the suit states.

Neither Kaufmann nor Erie have even attempted to remediate the mold problem. Now, Lavaland claims Erie should be responsible for fixing both the smoke-damaged wood and the mold.

It alleges breach of contract against Erie, saying the insurance company refused to accept two estimates for repair costs. Erie even replaced Kauffman with its Senior Property Claim Specialist Trevor Rittick after Kauffman provided an estimate of $208,221.66 to replace the property, according to the complaint.

And even Kauffman's estimate came in low, the suit states. Genco Construction estimated the cost to replace the building and its electrical services to run at $483,269.79, the complaint says.

Despite the estimates and without looking at the building, Rittick predicted repairs would cost $84,200.33 and sent a check for that amount on Aug. 7, 2008, to Lavaland, it claims. Erie rejected Genco's claims because it erroenously believed Genco's estimate required the use of nominal wood instead of the cheaper dimensional lumber, according to the complaint. In addition, Genco recommended the roof be removed and replaced, another cause for Erie's refusal to acknowledge the estimate.

However, Lavaland insists on the accuracy of Genco's estimate.

"The roof on the burned side of the roof must be replaced because the roof decking, rafters and support beams are charred," the suit states. "The other side of the roof must be replaced because the roof suffered significant smoke and water damage.

"Additionally, the brick wall in the room where the fire occurred must be torn down and reconstructed because the fire caused significant smoke damage and the water used to put out the fire is gradually pushing out and eroding the mortar holding the bricks together, which, upon information and belief, creates a structural concern.

"Replacing just a portion of the roof decking, as suggested in the Rittick estimate, would mean patching a damaged roof, which would create a bump of approximately two inches, creating a water dam which would hold water after every rain. The water dam would erode that portion of the roof and create significant potential for ice damming."

In addition to breach of contract, Lavaland alleges Erie violated the Illinois Insurance Code by rejecting the only complete estimate that covers all damage from the fire; by approving the scope of repair work necessary to repair all damage, then denying the approval when discovering the cost; and by rejecting Kauffman's estimate in favor of the estimate of a man who has never seen the building.

In addition to the $483,269.79 Lavaland says it will cost to repair its building, the company seeks costs, attorneys' fees and other relief the court deems just.

Ted W. Dennis of Freeark, Harvey, Mendillo, Dennis, Wuller, Cain and Murphy in Belleville and Jim Ellis of Ellis Law Office in Belleville will be representing it.

St. Clair County Circuit Court case number: 10-L-57.