After battling the Monterey Insurance Company for more than a
year, the city has finally won a lawsuit guaranteeing at least $1
million in compensation for an airport building that burned down
two years ago.
Hollister – After battling the Monterey Insurance Company for more than a year, the city has finally won a lawsuit guaranteeing at least $1 million in compensation for an airport building that burned down two years ago.
“This is a good case for the city. We’re really pleased with the results,” said City Attorney Elaine Cass, who added the payment should be between $1.3 and $1.5 million.
“It’s a nice little victory for the city, and the city needs some good news right now,” said former Mayor Tony Bruscia, who was on the Hollister City Council when the suit was filed in mid-2003.
In November 2002, a 60-year-old building at the Hollister Airport that was covered by a $1 million insurance policy with Monterey Insurance burned down due to an overheated light bulb hanging over combustible materials, fire officials said. But rather than paying the policy out in full, the insurance company offered the city only $58,000 – half of what it cost to demolish the building several months after the fire.
“Basically the insurance company jerked us around and acted in bad faith. They didn’t help us with the claim process, and then said we didn’t file in time,” said Bruscia, who also runs an insurance business. “I felt strongly that they acted in bad faith and they put us in a position where we couldn’t succeed, and it was like ‘Wait a minute, we bought this policy in good faith.'”
Monterey Insurance later offered the city a settlement, which the council decided to reject in closed session in favor of a lawsuit for the full $1 million-plus. Cass said she couldn’t comment on how much the settlement offer was for.
But Mayor Pauline Valdivia said Wednesday the amount was small enough to risk filing a lawsuit.
“I think that’s something that we had to move forward on. You always take a risk in doing certain things, but this really came out in our favor. Sometimes you have to take those little risks,” said Valdivia, who was also on the council throughout the process.
Valdivia said yesterday it was too soon to say when construction of the new building will begin or what the building will be used for. Prior to burning down, the airport’s Building 25 had been used mostly for storage and meeting space.
The payment from the Monterey Insurance Company must be used to construct a new building at the airport, according to Councilman Robert Scattini.
“It has to be the same foot print and the same size as the one that burned down,” Scattini said, but added rather than using the new building for storage, the council might use it for shop space to encourage local business.
Jessica Quandt covers politics for the Free Lance. Reach her at 831-637-5566 ext. 330 or at [email protected].
