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

INGENCO HOLDINGS, LLC, et al v. ACE AMERICAN INSURANCE COMPANY

ATTENTION: It is possible that this information may no longer be current and therefore may be inaccurate. The index contains both open and closed cases and is not a complete list of cases in which an ACE Insurance Group company is involved. This information is provided to give interested persons an idea of the issues disputed in the indexed cases. For a full understanding of a case, one should read the rest of the court file, including the response. For the most up-to-date and complete information on a case, visit www.pacer.gov or contact the clerk of the relevant court.

Case Number: 
2:13-cv-00543 Search Pacer
ACE Group party(s): 
Opposing Party: 
INGENCO Holdings, LLC
Court Type: 
Federal
US District Court: 
Western District of Washington
Date Filed: 
Mar 26 2013

"COUNT I
(Breach of Contract for Property Coverage)

28. Plaintiffs incorporate by reference and re-allege each and every allegation set forth in paragraphs 1 through 26, as if fully stated herein.

29. The Policy is an "All Risks" commercial property insurance contract. It covers all risks of direct physical loss to property unless excluded.

30. The Policy states as its insuring agreement: COVERAGE: PERILS INSURED AGAINST This Policy covers the property insured hereunder against all risks of direct physical loss or damage occurring during the period of this Policy from any external cause, except as hereunder excluded or limited.

31. The adsorbent material in the NRU was damaged when the diffuser separated from the vessel on or about October 10, 2010.

32. Plaintiffs were, however, unaware that the adsorbent material had escaped the one vessel when the diffuser failed.

33. After March 31, 2011, BEW discovered that adsorbent material from the October 10, 2010, failure in the one vessel had escaped into the other three NRU vessels. The escaping adsorbent material led to clogging of the NRU due to dust build-up and also led to the adsorbent materials in the other three vessels being compromised and destroyed.

34. ACE entered into a valid contract of insurance to provide Plaintiffs with boiler and machinery coverage under the Policy.

35. ACE has an obligation under the Policy to pay Plaintiffs for property damages, business interruption, and extra expense for the Cedar Hills incident of October 10, 2010, which continued thereafter and led to a second shutdown and further losses.

36. ACE breached its duties under the Policy by wrongfully denying coverage for the Cedar Hills Loss.

37. The Policy's Endorsement 18 provides a schedule of insured locations and the specific amounts of insurance. Plaintiffs' Cedar Hills facility was insured for thirty-five million dollars ($35,000,000.00) for buildings and contents. The location also has twelve million dollars ($12,000,000.00) in coverage for Business Interruption and Extra Expense. The Policy's Endorsement 23 adds Business Interruption and Extra Expense coverage to the Policy.

38. Despite receiving and retaining premiums paid for by INGENCO and BEW for the Policy, ACE breached its duties under the Policy.

39. Plaintiffs sustained approximately three million five hundred sixty-five thousand three hundred fifty-seven and 16/100 dollars ($3,565,357.16) for property loss.

40. Plaintiffs sustained approximately six million three hundred ninety-seven thousand eight hundred sixty-three and 74/100 dollars ($6,397,863.74) in business interruption losses.

41. Plaintiffs are incurring legal fees and expenses at present in order to secure coverage for the Loss in question.

42. Plaintiffs have fully performed all their contractual obligations under the Policy.

43. As a direct and foreseeable consequence of ACE's material breaches of the Policy, Plaintiffs have suffered damages in excess of seventy-five thousand dollars ($75,000.00), in an amount to be determined at trial.

COUNT II
(Breach of Contract for Boiler & Machinery Coverage)

44. Plaintiffs incorporate by reference and re-alleges each and every allegation set forth in paragraphs 1 through 43, as if fully stated herein.

45. The Policy contains Endorsement 24, which provides coverage for "Boiler and Machinery."

46. Endorsement 24 contains its own separate coverage grant, which states in part:
1. INSURING AGREEMENT
Subject to all provisions stated herein the Company [ACE] shall be liable for:
(a) direct physical loss to property of the Insured and to property of others in the care, custody or control of the Insured;
(b) the loss and expense resulting from the necessary interruption of business; if a Business Interruption Section is attached and which provisions hereby apply;
(c) extra expense; if a Business Interruption Section is attached and which provisions hereby apply and all as resulting from an Accident to an Object. When used in this Endorsement, the following definitions shall apply: "Object" shall mean any boiler, fired or unfired pressure vessel, refrigerating or air condition system, piping and its accessory equipment, and any mechanical or electrical machine or apparatus used for generation, transmission or utilization of mechanical or electrical power. "Accident" shall mean a sudden and accidental breakdown of an Object or a part thereof which manifests itself at the time of its occurrence by physical damage that necessitates repair or replacement of the Object or part thereof.

47. The Policy also defines an "occurrence" as follows:
DEFINITION OF OCCURRENCE
Occurrence, as used in this Policy, is defined as follows: The term "occurrence" shall mean an event or a continuous exposure to conditions which causes direct physical loss or damage or destruction to property insured. All damages or destruction resulting from a common cause, or from exposure to substantially the same conditions, shall be deemed to result from one "occurrence" except as modified herein.

48. On or about October 10, 2010, and through March 31, 2011 Plaintiffs suffered direct physical loss to their property, that being the NRU, at its Cedar Hills facility (the "Loss").

49. The Loss was caused by an Accident as defined in the Policy's Endorsement 24. That is, on or about October 10, 2010 the NRU sustained a sudden and accidental breakdown of an Object. Specifically, the diffuser welding failed, thereby allowing the diffuser to enter into and damage the adsorbent material and releasing the material throughout the remaining vessels of the NRU.

50. Plaintiffs were, however, unaware that the adsorbent material had escaped the one vessel when the diffuser failed.

51. Each vessel at issue constitutes an Object as defined by the Policy's Endorsement 24. The NRU vessels are "unfired pressure vessels."

52. After the replacement of the failed diffuser the Cedar Hills facility was restarted.

53. The NRU and entire facility were monitored for a number of months to determine if the repairs were successful. On or about March 31, 2011, the facility was shut down again due to problems with the NRU.

54. After March 31, 2011, Plaintiffs discovered that adsorbent material from the October 10, 2010, failure in the one vessel had escaped into the other three NRU vessels. The escaping adsorbent material led to clogging of the vessels due to dust build-up and also led to the adsorbent materials in the other three vessels being compromised and destroyed.

55. The Policy's Endorsement 24 states in part: If an initial Accident causes other Accidents, all will be considered "One Accident". All Accidents at any one location which manifests themselves at the same time and are the result of the same cause will be considered "One Accident."

56. The Policy's Endorsement 18 provides a schedule of insured locations and the specific amounts of insurance. Plaintiffs' Cedar Hills facility was insured for thirty-five million dollars ($35,000,000.00) for buildings and contents. The location also has twelve million dollars ($12,000,000.00) in coverage for Business Interruption and Extra Expense. The Policy's Endorsement 23 adds Business Interruption and Extra Expense coverage to the Policy.

57. ACE entered into a valid contract of insurance to provide Plaintiffs with boiler and machinery coverage under the Policy.

58. ACE has an obligation under the Policy to pay Plaintiffs for their property loss, business interruption, and extra expense for the Cedar Hills Accident of October 1, 2010.

59. ACE breached its duties under the Policy by wrongfully denying coverage for the Cedar Hills Loss.

60. Despite receiving and retaining premiums paid for by Plaintiffs for the Policy, ACE breached its duties under the Policy.

61. Plaintiffs sustained approximately three million five hundred sixty-five thousand three hundred fifty-seven and 16/100 dollars ($3,565,357.16) for property loss.

62. Plaintiffs sustained approximately six million three hundred ninety-seven thousand eight hundred sixty-three and 74/100 dollars ($6,397,863.74) in business interruption losses.

63. Plaintiffs are incurring legal fees and expenses at present in order to secure coverage for the Loss in question.

64. Plaintiffs have fully performed all their contractual obligations under the Policy.

65. As a direct and foreseeable consequence of ACE's material breaches of the Policy, Plaintiffs have suffered damages in excess of seventy-five thousand dollars ($75,000.00), in an amount to be determined at trial.

COUNT HI
(Declaratory Judgment)

66. Plaintiffs incorporate by reference and re-allege each and every allegation set forth in paragraphs 1 through 65, as if fully stated herein.

67. The Policy provides that ACE will pay Plaintiffs' direct physical loss to property resulting from an Accident to an Object. The Policy also provides that ACE will payPlaintiffs for related business interruption losses.

68. ACE denied coverage for the Loss at the Cedar Hills facility and has refused to pay any amounts for the Loss.

69. Plaintiffs respectfully move for a declaratory judgment that the terms of the Policy require ACE to cover the property loss and business interruption in question.

70. Plaintiffs also respectfully move for a declaratory judgment that ACE unreasonably denied the claim for coverage and payment of benefits under the Policy.

COUNT IV
(Violation of the Consumer Protection Act)

71. Plaintiffs incorporate by reference and re-allege each and every allegation set forth in paragraphs 1 through 65, as if fully stated herein.

72. The acts and omissions of ACE constitute violations of the Washington Administrative Code. As a result, such acts and omissions constitute unfair acts and practices as defined under Washington Admin. Code § 19.86, et. seq.

73. ACE failed to properly investigate the full claim submitted by its insureds, BEW and INGENCO, including but not limited to the ensuing nature of the property damage and business operation loss after October 1, 2010.

74. As the proximate result of ACE's violation of the Washington State Consumer Protection Act, § 19.86, et. seq., and breach of its duty to investigate this loss, Plaintiffs have been injured in its business and property in an amount to be proven at trial.

75. As a direct and foreseeable consequence of ACE's material breaches of the Washington State Consumer Protection Act, Plaintiffs have suffered damages in excess of seventy-five thousand dollars ($75,000.00), in an amount to be determined at trial. Plaintiffs are entitled to have such damages trebled in accordance with the Consumer Protection Act.

PRAYER FOR RELIEF WHEREFORE, Plaintiffs demand judgment against ACE American Insurance Company as follows:

a. On Counts I and II for actual damages in an amount to be proven at trial;
b. On Count III for a declaration that the provisions of the Policy require ACE to provide coverage for the losses in question and that its denial of coverage was unreasonable;
c. On Count IV for an award of damages for ACE's unfair and deceptive acts and that such damages be trebled in accordance with the Consumer Protection Act.
d. For prejudgment and post judgment interest at the maximum rate allowable by law for Count I;
e. For costs and attorneys' fees in accordance with Olympic Steamship Co., Inc. v. Centennial Ins. Co., 117 Wash.2d 37, 811 P.2d 673 (1991) and its progeny.
f. For such other relief as this Court deems just and proper."

The provided text is an excerpt from a document filed in this case. For a full understanding of the case, one should read the complete court file, including the response.

Javascript is required to view this map.