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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

Contractor Sues ACE American After Parking Garage Collapse

May 13th, 2015 - When a concrete deck of a massive garage being built for the Los Angeles mass transit system collapsed as it was being poured, everyone felt lucky that no one was injured. But unluckily for the company in charge of that effort, its insurance company has balked at paying for the damage that resulted.

McCarthy Building Companies Inc., of St. Louis, Missouri, had been hired to handle the construction of a parking deck at a bus maintenance and operations center commissioned by the Los Angeles County Metropolitan Transportation Authority.

Work on the $120 million project was well underway on March 28th, 2014, 180 workers on the upper deck noticed “something amiss” in the concrete pouring process, according to Los Angeles radio station KPCC. They scrambled off the deck, only to see it collapse.

At the time, McCarthy said it owned an insurance policy issued by ACE American Insurance policy that covered it against “direct physical loss of property of every kind and description intended to become a permanent part … of the project.” McCarthy said there were no exclusions to the policy.

The construction company tendered a claim to ACE for all policy benefits, and by June made a demand that it be paid. But 14 months later, McCarthy said ACE has not yet completed its assessment of the damages or provided a final coverage determination. (The Los Angeles Metro advised in a December, 2014, report on the project that it had completed its inquiry into the cause of the failure.)

Yet, McCarthy claimed in a lawsuit filed in U.S. District Court in Los Angeles, ACE has taken the position that certain components of the company’s claim are not covered by the policy.

McCarthy said it is due $2.6 million from ACE. And it said that the Los Angeles Metro has claimed it is due $1.1 million because of construction delays caused by the failure.

McCarthy seeks a declaration of rights and obligations of the parties to the policy for both its claim and that of the L.A. Metro. It also seeks a judgment of at least $2.6 million against the ACAEA Group unit.

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