Hollister, insurer agree seven years after blaze
More than five years of litigation has ended between the City of
Hollister and an insurance company over payment for an airport
building destroyed in late 2002.
Hollister, insurer agree seven years after blaze
More than five years of litigation has ended between the City of Hollister and an insurance company over payment for an airport building destroyed in late 2002.
Council members last week approved a settlement with Monterey Insurance Co., which will pay the city $2 million for the building’s replacement on top of $322,000 already paid to Hollister. That means all the pieces finally are in place for the city to progress on the project held up for more than five years due to the legal battle.
For the most part, that 18,000-square-foot building at 195 Astro Drive had been used as rental space before the November 2002 blaze. Many years ago, the Navy built the structure when it still used the airport as a base.
After the city filed its claim for the fire, Monterey Insurance Co. investigated and initially determined it was a total loss potentially covered by the claim – only to change its tone later, leading to the lawsuit, according to a city council staff report.
When Monterey Insurance Co. disputed conditions of the agreement, the city filed a lawsuit in Monterey County Superior Court in 2003 and later won that case. The insurance company, however, took it to the Sixth Appelete District, while the city also prevailed there.
Since that decision last fall, Monterey Insurance Co. and Hollister representatives had continued to dispute the adjustment of the claim, including “what kind of building constitutes replacement and what building costs are permitted,” according to the staff report.
Council members at their April 20 meeting agreed to the settlement terms.
The total claim for Hollister, then, will come to more than $2.3 million, and those funds are unrestricted in how they are spent.
As far as the next step goes, Hollister officials will mull over bids received for the estimated $2.1 million project.
