This is the case of Ingenco Holdings LLC et al. v. Ace American Insurance Co., in the U.S. District Court for the Western District of Washington at Seattle.
A natural gas processing plant is seeking a $15 million insurance claim, claiming that unforeseeable harmonic vibrations caused a critical part of the plant to fail. Ingenco Holdings LLC is arguing that Ace American Insurance Co. should cover the claim, as the plant shutdown was not a result of depletion, deterioration, or wear and tear, which are not covered by Ingenco’s policy.
In opening arguments in federal court, Ingenco’s attorney, Frank Cordell, stated that the jury will hear evidence that flow-induced vibrations caused a machinery malfunction, which was an unforeseeable event that Ace should cover. The attorney representing the insurer, Michael L. Foran, blamed the plant shutdown on an inherent defect in a component called a “diffuser basket,” which controls the flow of gas into the processing system.
Foran also argued that Ingenco waited seven months to report the claim, during which time Ingenco removed the damaged part and discarded it, which prejudiced the insurer’s ability to examine it. Cordell acknowledged that Ingenco failed to timely notify Ace of the loss but argued that the jurors will hear expert witnesses testify that Ace did not need the discarded part to prove or disprove that there was an unforeseeable accident.
Ingenco Holdings is suing Ace, alleging that the insurer breached a commercial property insurance policy in refusing to cover damages related to the shutdown of its subsidiary Bio Energy LLC’s Maple Valley, Washington-based plant, which converts gas from landfills into natural gas for use as energy. The case is being heard by a jury in Seattle, and the outcome will determine whether Ace will be liable for the $15 million claim.