Couple faces insurance battle
Three years after house fire,
Accolas waiting for payment
June 16, 2010 | 09:01 AM
Elkhorn — Fontana's Jim and Suzy Accola are living through an insurance nightmare. Although the courts have ruled in their favor — to the tune of about $3 million — they still are uncertain whether they will see the money.
About three years ago, Jim began building a home through his company, Fontana Builders, in the Geneva National subdivision. When the house was completed, the couple planned on moving into it.
However, on June 28, 2007, those plans came to a screeching halt when rags used for staining the home interior ignited burning down the house.
The remains of the house still are there, reminding the couple of their loss any time they visit friends in the subdivision.
"It's still pretty sad when we drive by it," Suzy said. "Not having closure, it has been very difficult to move on."
Before construction began, Jim went through his usual process of purchasing insurance through Assurance Company of America.
However, after the fire, Assurance Company of America said Fontana Builders wasn't covered, period.
The insurance company argued that the couples' home insurance should cover the loss, but the home still was technically owned by Fontana Builders.
Arbitration occurred, but an agreement wasn't reached.
The couple took the case to jury trial, and the jury agreed with them.
On April 12, during the first phase of the trial, the jury agreed that Assurance Company of America should have covered the losses caused by the fire and awarded the couple about $1.2 million.
On April 14, the jury found that the insurance company acted in bad faith by denying the claim and awarded them an additional $1.3 million.
More money was awarded for interest from the time the claim was filed and the jury made its decision. Other monetary judgements also were awarded to the couple.
Currently, the insurance company owes the couple more than $3 million and interest is accumulating at a rate of about $850 a day.
The Accola's attorney, Chris Trebatoski, of Weiss Berzowski, Brady LLP, out of Milwaukee said the insurance company is expected to appeal the jury's decision.
Trebatoski said this could drag out the case for several more months. Although he is confident that the ruling will be upheld, with an appeal there are always uncertainties.
One of the unusual aspects of this case was how the insurance agent handled the coverage, Trebatoski said.
In the process of writing the policy, the agent entered all the information into the computer and a human underwriter never examined the policy.
"I've never seen a case before where an insurance policy was issued for this amount in a building situation where no human being was involved in the underwriting," Trebatoski said.
During the process of entering information, certain triggers will require another person to examine the policy. Agents are aware of these triggers and can avoid them.
The only information the agent required was where the structure was being built and how much coverage was needed.
The amount of the coverage was about $5,000 less than would have required an underwriter.
Another trigger is coverage that exceeds $100 per square foot. The agent entered the square footage of the home as 15,000. However, the home was only about 6,000 square feet.
Trebatoski learned during the trial that there was no trigger for square footage requirements.
The Accolas also never saw what square footage was entered as until after the fire. Trebatoski said other information wasn't released until the formal discovery process.
Jim said the fire has hurt his business and his personal life.
He said if people question whether he has adequate insurance that hurts his reputation.
Jim said he is bouncing back from the fire and has changed his business name to Accola Construction Group.
This fire slowed cash flows and made it harder for Jim to rebound. Trebatoski added its especially difficult for a small business man.
"This is an entrepreneur, a small business that employees people," Trebatoski said.
Trebatoski said in these cases the human impact is significant and it's difficult to watch people have to handle the lengthy ordeal.
"The human impact is very hard. It just takes a long time and a lot of arguments that are hard to hear," he said. "It's very hard for the people who have to go through it."