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New Martinsville Wants $20M For Hydro Plant Damage

The city of New Martinsville has filed a lawsuit in federal court seeking a potential $20 million in damages from Liberty Mutual Insurance Company over its denial of a claim from the city’s hydroelectric plant.

The suit, filed earlier this month in U.S. District Court in Wheeling, states the suit arises from Liberty’s failure to pay for a loss to New Martinsville’s insured property under an “all risks” property insurance policy issued by Liberty.

New Martinsville claims Liberty failed to honor its obligations with respect to a loss occurring at the hydroelectric plant, located at the Hannibal Locks and Dam.

The city claims that on July 10, 2014, the plant’s operators heard “an extremely loud metal fracturing sound followed almost immediately by excessive vibration levels emanating from Unit 1.” The city says it discovered that several of the bolts and nuts connecting the rubber hub to the turbine shaft were either broken or disengaged.

Other damages to Unit 1 were discovered and repairs were then undertaken “at substantial expense,” the lawsuit claims. The city claims the unit was non-operational for more than two and a half years, costing the city potential sales from electricity that the unit would have produced.

The city argues that its policy with liberty provides “business interruption” coverage, and that it promptly provided Liberty with notice of the July 10, 2014 incident. It claims Liberty has refused to accept the claim and has, “as a practical matter, denied coverage for the losses sustained by Unit 1 and for any related losses.”

According to the lawsuit, Liberty justified its denial after concluding that the loss was caused by one or more “excluded perils” identified in the policy.” But the city says that if Liberty intends to rely upon an excluded peril, it must prove that it was sole cause the loss.

“Liberty has failed to satisfy this burden under the relevant standards of proof and will be unable to do so at trial,” the lawsuit states.

New Martinsville requests a monetary judgment against Liberty “in an amount to be proven at trial, but believed to be in excess of $20,000,000 plus pre- and post-judgment interest on such amounts.”

New Martinsville also seeks attorneys’ fees and other legal costs, as well as “any further relief the Court deems just and equitable.”

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