CHARLESTON, W.Va. — The Greenbrier’s federal lawsuit against an insurance adjuster over damage claims from the 2016 flood amounts to an intimidation attempt, according to an executive with the company.
“Unfortunately, this kind of legal bullying is a standard tactic used by Justice-owned companies to try to get out of paying what they owe to contractors, lawyers and even the government,” said Neil Kahn, executive vice president of Goodman-Gable-Gould.
The Greenbrier filed its lawsuit in August in U.S. District Court for the Southern District of West Virginia.
Lawyers for The Greenbrier contend that the insurance claims adjuster did not do enough to help pursue compensation from damage following the flood.
The Greenbrier, owned by the family of Gov. Jim Justice, is a 240-year-old resort in White Sulphur Springs. Justice’s annual ethics disclosure lists more than 90 businesses in the family’s portfolio of resorts, coal companies and agriculture.
The Justice companies are involved in a variety of other legal actions over finances. In one case, the Justice companies filed suit against the federal Office of Surface Mining, apparently preempting a lawsuit by the U.S. Department of Justice.
Representatives of the Justice companies were told of GGG’s main points in advance of this story. The Greenbrier did not directly address those points but issued a statement firing back at the insurance adjuster.
“It’s unfortunate, though not surprising, that GGG is responding to this suit with the same misleading and arrogant manner with which they approached their contract with the Greenbrier community after a historic and devastating flood,” stated attorney Richard Getty, an attorney for the Justice companies.
“This was a firm that mismanaged their responsibilities from day one, was willfully ignorant of the historic architectural nature of a structure built in 1778 and yet somehow still believes they’re entitled to hundreds of thousands of dollars in compensation. We look forward to a full airing of the facts in court.”
The origin of The Greenbrier’s lawsuit against its insurance adjuster was when hotel and surrounding properties were damaged by historic flooding in 2016 and the hotel operators filed insurance claims to aid recovery.
The resort entered into an agreement with GGG about July 7, 2016.
The Greenbrier was seeking compensation after that year’s flood damaged the hotel’s roof, the casino, a brand new chapel and the tennis stadium.
The damage also included revenue losses at the hotel and its golf courses, plus the cancellation of the Greenbrier Classic pro golf tournament, normally held that week.
And the lawsuit contends the catastrophic event hurt future revenue, affecting plans for a new ski area, a new golf course and residential expansion.
Lawyers for The Greenbrier contend GGG failed to properly calculate the resort’s business operation losses “and refused to correct and revise those calculations, despite the plaintiff’s demands that it do so.”
Goodman-Gable-Gould says it completed professional work that was overseen every step of the way by representatives from The Greenbrier.
“The process was completely transparent,” Kahn said. “Every submission — the analysis, the detailed spreadsheets — was reviewed multiple times by representatives of The Greenbrier.”
Representatives of The Greenbrier have contended for months that the insurance payouts were inadequate to cover the losses.
Lawyers for The Greenbrier say the recoveries totaled about $39 million and were obtained “with extreme pressure and assistance from Plaintiffs.”
GGG suggests the $39 million that was collected from insurers was just what came in up to a certain point.
“It was not a final settlement,” Kahn said. “It was a sum certain as of that date.”
When operators of The Greenbrier demanded in September, 2017, that GGG file suit against the insurers because of their refusal to negotiate and settle their claims, the insurance adjuster refused, the resort’s lawyers say.
Kahn says a lawsuit isn’t the responsibility of the insurance adjuster.
“They do allege that, and it’s puzzling because we are not lawyers,” he said. “We can’t sue anybody, initiate a lawsuit against anybody.
“We’re not a law firm, and the decisions to pursue legal actions are The Greenbrier’s, not GGG’s.”
By late fall of 2017, The Greenbrier operators terminated the services of GGG, saying it hadn’t lived up to its duties.
Except GGG says it wasn’t informed of the termination.
“The Greenbrier never communicated why they chose to finish the project without GGG,” Kahn said. “The only notification GGG received was a carbon copy of a message to insurance companies stating that GGG was no longer representing the Greenbrier.”
Lawyers for The Greenbrier say GGG was compensated but that $609,515 remained in dispute. That money is in an escrow account. The Greenbrier, through its lawyers, says GGG is not entitled to the money.
In GGG’s view, that money represents compensation for work that it had done prior to the breakup with The Greenbrier. As money came in from insurers, GGG contends, The Greenbrier was supposed to pay for the work out of the escrow fund.
“Yet the ownership of the Greenbrier has yet to live up to its obligations under that agreement,” Kahn said.
He said the insurance adjustment company is examining its legal options.
“We are analyzing that with our attorneys,” Kahn said. “We hope it wouldn’t be necessary to countersue.”
He says the situation didn’t need to come to this.
“It’s just regrettable that The Greenbrier has taken this tack,” he said.
“It seems to be a standard tactic that they take what what we feel is a scorched earth strategy to avoid paying a contractual obligation. We believe that is what’s going on here, not the manufactured obligations that they put forth in their complaint.”