(USA Herald) – This is the case of Atlantic Street Heritage Associates LLC v. Citizens Insurance Co. of America, in the U.S. District Court for the District of Connecticut.

Atlantic Street Heritage Associates LLC., is the owner of The Heritage Building, located in Stamford, Connecticut, whose roof partially collapsed due to rain.

Citizens Insurance Co. of America, a unit of Hanover Insurance Company, issued a policy to Atlantic Street that provided compressive coverage for the Heritage Building. At the time the damage was sustained, Atlantic Street was insured for up to $4.1 million, according to the complaint filed on Friday.

This week Atlantic filed suit against Citizens Insurance, alleging the insurer denied its claim in bad faith and continually asserted a basis for denying coverage that it knew was false.

Atlantic Street, who is represented by James T. Shearin and Thomas Lambert of Pullman & Comely LLC, told a federal court on Friday that Citizens and its parent company, The Hanover Insurance Co., acted on “sinister motive” to evade making payment on a claim for damages resulting when several roof supports at its office building buckled causing a partial roof collapse.

According to the complaint, Atlantic Street said that its Heritage policy comprised additional coverage for damage from collapse, which included coverage for rainwater collected on its roof,

Counsel for Atlantic Street, argues that the claims adjuster was adamant that the Heritage claim was excluded from coverage because not enough rain came down on that day that would have caused such significant damage.

Atlantic Street claims that the adjuster's reasoning was factually baseless and was made purely for "the purpose of providing defendant Citizens with a basis for denying coverage."

The complaint states "Defendant Citizens realized that plaintiff's claim was likely to be very substantial and determined to pursue a dishonest and bad faith course of conduct to avoid paying the large amount plaintiff is entitled to recover pursuant to the policy."

According to the complaint, in August 2020, the trusses that support the roof of the Heritage Building collapsed "suddenly and without warning." The damage left the building unsafe to occupy, thus making it more important for the insurer to have reconciled this claim in a timely manner, but that didn’t happen.

Atlantic Street was forced to make out-of-pocket emergency repairs to prevent further damage at "substantial expense." It also claims that it lost rental income during the maintenance, and repair of the building.

The insurer has not yet responded to the complaint, but according to the arguments made in the complaint, it appears that the insurer is subscribing blame for the damage squarely on Atlantic Street.

From a review of documents and information related to this case, it appears that an expert engineer had previously concluded that an issue with draining allowed water to collect on the roof, which resulted in damage to the trusses, which then allowed even more water to accumulate until the supports failed.

Although Citizens Insurance Company has not yet responded to the complaint, it can be surmised, that at least one of the insurer’s arguments in support of denying the claim would be that the policyholder failed to mitigate damages, by ignoring the drainage issues.