Foran Glennon shareholders Matthew Ponzi and John Eggum secured the near complete reversal of a $32.7 million jury verdict in a first-party business interruption claim dispute that was tried in the Southern District of West Virginia.
Hon. John T. Copenhaver Jr., Senior United States District Judge for the Southern District of West Virginia, set aside the jury’s verdict originally awarded in favor of Ramaco Resources in its lawsuit against two insurance companies, as the verdict could not be upheld under the terms of the issued insurance policy.
The case centered on a silo that failed at Ramaco’s Elk Creek complex, shutting down operations on November 5, 2018. Ramaco believed the period of restoration should have been the seven months required to demolish the failed silo and upgrade the remaining two silos, ending June 7, 2019. However, because the failed silo became operable on November 30, 2018 and the two remaining silos were not damaged, the court determined the period of restoration ended on November 30, 2018.
As a result, the court reduced the original award of contract damages from $7.7 million to $1.6 million. Additionally, the court found that Ramaco was not entitled to a $25 million Hayseeds/extracontractual award because it did not “substantially prevail” in its claim.
This decision reinforces the traditional view that business interruption insurance is intended to do for the business what the business would have done had no loss occurred. It is not intended to enable the business to recover for time taken to make improvements or upgrades to their property.
The case is Ramaco Resources LLC v. Federal Insurance Company et al., No. 2:19-cv-00703 (S.D. W.Va.).
In matters of insurance coverage and commercial litigation, Matthew navigates the analysis and litigation of commercial property, liability and reinsurance claims.
John concentrates his practice on insurance coverage disputes and commercial litigation. He holds significant experience in insurance coverage matters relating to property and casualty commercial lines disputes.