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East Central States
Arson by insured’s employee results in multimillion dollar settlement.
In 2005 a disgruntled employee set two fires inside a plastic injection molding facility. The fire set near the rack storage area of the building quickly overwhelmed the water based sprinkler system and virtually destroyed the entire facility. The fire was investigated by local, state and federal agencies who all concluded that the cause of the fire was arson. The fire resulted in nearly fifty million dollars in damages.After the initial investigation, which took several months, Stutman New Loss and Litigation teams developed a plan for a successful subrogation recovery. The plan focused on two sets of defendants. The first group of defendants were responsible for the design, installation and maintenance of the sprinkler system which was deemed inadequate for the plastic processing application taking place at the facility. The second set of defendants manufactured high density polyethylene (HDPE) bulk box shipping containers which were widely used at the facility. HDPE is a highly flammable, petroleum based plastic, but bulk boxes made of it are highly prevalent in a number of industries.
The Stutman team was able to show that the sprinkler system at the plant was undersized for the plastic processing operation within, and that the HDPE boxes used at the facility were defective because they rendered the existing sprinkler system useless. During discovery, Stutman learned that various state and national fire protection organizations had warned manufacturers about flammability concerns of plastic pallets made of HDPE. The manufacturers were warned that the use of plastic pallets would typically require a costly upgrade to customers’ sprinkler systems. The industry however, did not provide this information to its customers.
After nearly four years of litigation, the exchange of hundreds of thousands of documents, over one hundred depositions, and the production and exchange of dozens of expert reports, Stutman was able to secure confidential settlements from each of the defendants for a significant percentage of the provable damages. In addition to the settlement, the Stutman Litigation team aggressively defended, and ultimately thwarted, the manufacturers’ effort to shift responsibility for the loss to the subrogated carrier for its routine underwriting practices.
Liability theory leads to recovery for water damage to dental office.
Stutman’s insured had a dental practice located in Illinois right next door to a dry cleaner’s. A water leak damaged the dental office’s property. At the time of loss, the nature and cause of the water leak was unknown. The insurance carrier for the cleaners informed the owner of the dental office that their insured was not at fault. The Stutman firm began an investigation post denial of liability. Through interviews with local officials, Stutman attorneys were able to establish a theory of liability against the dry cleaners and the business’ insurance carrier accepted liability and paid 100% of the claim.General contractor responsible for subcontractor’s negligence.
Stutman’s Indiana insured suffered over $100,000 in water damage due to a sprinkler head improperly being placed near the heat vent in the ceiling. Although the heater had also malfunctioned, Stutman’s investigation revealed that the failure would not have occurred if the sprinkler head was located the proper distance away from the vent. The general contractor settled with plaintiffs after depositions determined that the general contractor did not competently oversee the job site and did not ensure the proper "staging" of all the trades to ensure proper placement of different systems.Fire “jumps the tracks,” reducing building to rubble.
An Indiana multi-story building was reduced to rubble when a fire from a plastics plant jumped a set of railroad tracks. Stutman’s expert went to the scene but because of the collapse of the building where the fire originated, the cause of the fire was unclear and might never be determined. However, our expert was the only one to uncover the fact that the plastics plant did not have working sprinkler system. He contacted the local officials back to the scene so they could document that the outside valve was in the “off” position.At a subsequent inspection, the valve in question disappeared and the plastic plants investigator denied that it ever existed. His assertions were immediately contradicted by Stutman’s expert and the local fire official. Damages were approximately $400,000. Stutman attorney’s settled the case for a substantial six-figure recovery in excess of $350,000.
OSHA violations cited in loss of luxury home.
A fire in Carmel, Indiana, destroyed a luxury home that was under construction. The fire was caused by the electrical wiring associated with a paint spray machine utilized by painting subcontractors. Although the cause of the fire was heavily disputed; the Stutman firm recovered $650,000 from the painting subcontractors by establishing that the painting subcontractor committed numerous OSHA violations that contributed to the spread of the fire.City’s “seal of approval” fails to prevent recovery.
A fire, caused by the negligent installation of a wood burning fireplace, destroyed a residential home in Frankenmuth, Michigan. Although city officials inspected and approved the installation of the fireplace, the Stutman firm was able to recover $400,000 from the general contractor by establishing that the installation of the fireplace violated the Michigan Residential Code.Utility firm’s negligence causes gas explosion.
A gas explosion destroyed a residential home in Jackson County, Michigan. The Stutman firm took the case to trial against the utility company responsible for causing the natural gas leak. After establishing that the utility company violated safe industry practices, a jury returned a verdict for both the subrogated insurer and its insured and awarded 100% in damages. The Stutman firm also successfully recovered taxable costs and attorney fees via post-trial motions.Inexperienced roofer to blame for $1.5 million fire.
A roofer’s inexperience led to a major fire at a Michigan hotel. The roofer was hired to fix leaks and was cleaning rubber roofing materials with gasoline, putting down adhesive and "flashing". The fire department believed that the roofer was using a propane torch to heat the adhesive. Stutman’s expert contacted another roofing contractor who said that this is not the manufactures recommended way of using the materials. Stutman’s attorneys settled the case for over $1,500,000.Aggressive pursuit leads to full recovery for water damage.
A Michigan couple’s upscale home sustained water damage caused by their dishwasher. The heating element in the dishwasher malfunctioned and overheated, melting one of the rubber grommets used to seal the connection point between the end of the heating element and the interior floor of the dishwasher. This allowed water to leak through the bottom of the dishwasher and damage the residence. Stutman attorneys aggressively pursued the manufacturer of the dishwasher and the component part manufacturer of the heating element and obtained a pre-suit, 100% recovery.Negligent use of outdated machinery causes fire.
In Minnesota, significant smoke and water damage occurred to a commercial building that was located next to a machine shop that sustained a fire. The fire occurred when a large piece of manufacturing equipment malfunctioned. The machine was old and outside the statute of repose and therefore there was no recovery potential against the machine’s manufacturer. The insured’s experts examined the scene and formed the opinion that the fire was caused by a defect within the machine. Knowing this initial theory, Stutman brought their experts to the scene. Through this investigation we were able to eliminate a product/design defect as the cause of loss. Stutman attorneys located evidence and developed facts that the loss was caused by the tenant’s negligent use of the machine. As a result of Stutman’s investigation, the clients were able to recover 67% of RCV from the tenants carrier.Heating pad heats up more than its user.
In Missouri, a two-year old heating pad that was placed on a sofa caught fire while unattended. The manufacturer defended the claim on the basis of consumer abuse. The manufacturer’s counsel claimed that it would make no voluntary offer. However, the Stutman firm retained the appropriate experts and all the necessary evidence at the onset. The strength of the investigation caused the manufacturer to rethink its position and reach a significant out of court settlement.Design defect in expansion tank leads to tragedy.
A substantial worker’s compensation subrogation recovery was awarded involving a wrongful death in St. Louis, MO. A worker was killed by an exploding water expansion tank being replaced during well drilling operations. The case involved a defect in the tank design which allowed condensation to accumulate around the base allowing microscopic cracks to form. When the tank was pressurized upon removal, the tank “acted like a rocket” and exploded upward killing the worker.Stipulation of Liability leads to early settlement.
In a home in Ohio, a high tech sump pump system in the basement failed and caused a small fire. The sump pump system was made of a highly flammable material that produced a significant amount of smoke and soot damage to the home. Stutman investigators retained an engineering expert who was a former product design engineer for the manufacturer. During the course of the inspection, Stutman’s expert described the design and manufacture of the sump pump to the manufacturer’s expert and attorney. More importantly, Stutman’s expert was able to explain, in detail, how the sump pump failed and caused the fire. Immediately thereafter, Stutman attorneys were able to obtain a Stipulation of Liability from the manufacturer. Defense counsel subsequently tried to avoid paying the claims, questioning the significant amount of damage for such a small fire. Stutman attorneys worked with their expert and prepared a demonstration for defense counsel which set forth how the petroleum-based materials used to manufacture the sump pump produced a significant amount of black soot and smoke when ignited. Thereafter, the matter was amicably resolved and the insured received a six-figure award.Waiver can’t help negligent contractors.
A fire caused significant damage to a residential home in Ohio while under construction. The fire was caused by spontaneous combustion of rags that were left on the back porch by the painting contractors. Defendants argued that they were protected by an implied waiver of subrogation in construction contract. The Stutman firm defeated defendants’ motions to dismiss and took the insurance policy limits from the painting subcontractor who left the stained rags. Stutman attorney’s also forced the general contractor to contribute to the settlement by arguing that its employees failed to properly clean the job site and remove the paint-stained rags.Careful discovery leads to recovery from careless smoker.
This case involved a fire loss that originated on the back deck of a Kentucky two-story garden apartment building during a party being held by one of the tenants.Witnesses deposed in the case indicated that the fire originated on the railing of the wooden deck. The tenant’s carrier took the position that the fire may have been caused by careless smoking, but that no one could prove the identity of the careless smoker. Through careful discovery, the Stutman firm established that the tenant had provided several guests with a plastic water bottle for use as an ashtray, and that the fire originated on the railing at the location where the water bottle had been sitting. Based on this theory, the Stutman firm recovered $265,000 from the tenant.
