Meyer Crest, Ltd.

A fire destroyed a wood framed three-story addition to an existing hotel in El Centro, California. The addition was framed, rough electrical and plumbing were in place at second floor levels and the roof was stacked. Two other hotel complexes also owned by the insured were damaged.

• The policy was not endorsed to provide coverage for the addition.
• The construction contract was based on a handshake. There was no budget, project schedule and/or means with which to determine the value of general conditions and/or the contractor’s fee.
• By the time Adjusters International was hired, the insured had made the decision to repair the slab by applying lightweight concrete to hide the severe spalling of the slab.
• Vinyl siding on an adjacent hotel, a Johnny J Best Western, was damaged and the insurer took the position that only a portion of the siding needed to be replaced. Adjusters International, on behalf of the insured, claimed 100% replacement was necessary.

• Adjusters International reviewed the policy and found an extension of coverage for “newly acquired properties” situated within 1,000 feet of an insured location. The distance between the completed hotel and the addition was found to be within the prerequisite distance.
• Adjusters International reviewed all of the construction source documents, which included subcontractor agreements, and payments made to all vendors and sub-contractors. Adjusters International prepared a budget broken down by trade and a project schedule, which enabled us to calculate the amount of supervision, general conditions as well as contractor fees. Adjusters International obtained a statement from the local building department official as to the state of construction as of the date of the last inspection. Adjusters International assisted the insured and the contractor in the preparation of a standard AIA Agreement, with a line-item breakdown, which was the basis of the settlement negotiations. Adjusters International’s efforts resulted in the insured collecting for all applicable costs associated with the project, which according to the contractor were included in the overall cost of the project. As a direct result of Adjusters International’s involvement, the insured’s normal operating procedures have been modified to align with Adjusters International’s format.
• In addition to the cost of the actual repairs to the foundation, Adjusters International argued successfully for monetary consideration for the diminution of value of the fire-damaged foundation system. Someday this may come into play, should the insured decide to sell and be forced to disclose the fact that the foundation had been damaged by fire.
• Adjusters International researched—and confirmed in writing—that the siding on the Johnny J Best Western Hotel is no longer being manufactured and the closest match in color is not compatible to the existing material. The end result was that 100% of the siding was considered in the final settlement.