Insurance Company held Accountable for Refusing to Protect Small Business Owner

Case Type

Blake Heath along with his friend and colleague Don Saxton of Saxton Law Firm obtained a $678,000.00 verdict in favor of their client against his insurance company for improperly denying coverage. The case stemmed from damage to the client’s hotel.

The client owned and operated a hotel in rural Missouri. In 2018, the client noticed that the roof above his pool had started to sag. He contacted his insurance company to report the damage. The insurance company hired an engineer that walked around the pool area and the roof, but the engineer never got into the attic to check the condition of the trusses supporting the roof. The engineer decided that high moisture content had caused the roof to sag. Based on the engineer’s decision, the insurance company refused to fix the roof.

In early 2019, the client reached back out to his insurance company and disputed the engineer findings. The client informed his insurance company that he believed a storm had damaged the roof. The insurance company sent the same engineer out to look at the hotel. The engineer climbed on the roof to see if there was any hail damage, but he did not do any inspection of the attic space to check the trusses above the pool. The engineer authored two reports after this visit. The first report simply addressed hail damage. Realizing that the engineer’s report had not answered the critical question of whether a storm caused the roof to sag above the pool, the insurance company requested an additional report. Without doing any new analysis, the engineer sent a report stating that moisture caused the roof to sag.

In 2020, the city health inspector noticed the sagging roof and shut down the hotel. In order to get the hotel reopened, the client hired an engineer to inspect the property. The engineer determined that the that the roof was sagging due to wind damage. The engineer reached his conclusion after getting into the attic and inspecting the trusses. The engineer’s opinions were corroborated by a roofing company that also inspected the trusses. Both the engineer and the roofing company determined that moisture was not the cause of the damage. The client sent the engineer’s report to his insurance company. His insurance company forwarded the report to the same engineer it had relied on to previously deny the claim. This engineer dismissed the report even though the engineer had not gotten into the attic to inspect the trusses.

In 2021, Mr. Saxton made a demand for the insurance company to honor the obligations it had under the insurance policy and repair the roof. The insurance company denied the claim, so a lawsuit was filed.

After 2 years of litigation, the case was tried to a jury. At trial, the insurance company abandoned the original engineer, and it hired a new engineer to support denial of the claim. However, this new engineer was critical of the original engineer’s report. In fact, the new engineer agreed that the original engineer’s report was flawed. Using these flaws, Mr. Heath cross-examined the new engineer to show how the insurance company had behaved unreasonably. Mr. Heath was able to illustrate how the insurance company had relied on a flawed opinion to deny coverage for over 5 years.

Ultimately, the jury saw through the insurance company’s tactics and entered a unanimous verdict in favor of the client. The jury awarded the costs to repair the roof, lost profits, and penalties under Missouri’s vexatious refusal to pay statute. The overall judgment totaled $678,000.00.

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Past results afford no guarantee of future results and every case is different and must be judged on its own merits.

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