Subrogation Group's Success Continues In Massachusetts
October 20, 2009
Clausen Miller's client's Insured operated a pizzeria in strip mall in West Boylston, Massachusetts. A fire ensued in another tenant's space within the strip mall. The fire and smoke spread to the Pizzeria. The Insured actually suffered the worst damage of any of the tenants.
Subrogation Partner Robert Stern (New York and New Jersey, also a licensed Massachusetts attorney) and subrogation associate Virginia Markovich (New York), were retained to investigate the fire. They retained a local origin and cause expert. The expert determined the fire originated on the outside of one of the other stores in the strip mall, possibly near a neon sign. The expert could not determine the cause of the fire; however, he determined that the roof/attic area of the neighboring store was not sprinklered and thus, led to the spread of the fire to the Pizzeria. The expert further stated that the failure to sprinkler the roof/attic area violated Section 1202.0 of 780 CMR Massachusetts State Building Code.
Mr. Stern and Ms. Markovich worked with the expert to craft an Expert Report. The Report discussed the Code Violation and concluded: "If automatic sprinklers had been installed the fire would have been controlled or suppressed with 2 sprinklers or less. The fire damage would have been limited to the combustible concealed space over the neighboring store with moderate smoke and water damage to the interior of the store. There would have been no fire, water or smoke spread to the Insured's space."
Despite the lease provisions, because of the well drafted Report, the client authorized our recommendation to seek recovery from the Landlord. We attempted an amicable resolution of this six figure loss, but were unsuccessful. The parties then agreed to save costs/expenses and have the dispute Arbitrated.
Although we were unsuccessful during the original Arbitration, having confidence in the claims against the Landlord, the client authorized our appeal of the Decision (there was a procedure in place). Not only did the Appellate Panel hold that Clausen Miller (CM) proved the claims against the Landlord, but disregarded the Lease provisions and other defense arguments. The Appellate Panel awarded CM's client and Insured 100% of their losses.
If you would like to learn more about the Subrogation and/or Arbitrations, please feel free to contact Robert A. Stern (rstern@clausen.com) or Virginia Markovich (vmarkovich@clausen.com), or call them at 212/805-3900.
