WVU PKA has party, destoys house, gets $585K from insurance

[hoosier]

April 11, 2002.
Insurance firm, adjuster to pay frat owner $585K

In settlement of lawsuit involving former Pi Kappa Alpha house
BY CHARLES C. SELL

The Dominion Post

A New York insurance company and its Clarksburg claims adjuster have agreed to settle for $585,000 a Monongalia County Circuit Court lawsuit that alleged violation of state law, bad faith and negligence.

Fulcrum Insurance Co. agreed to pay $535,000 to White Horse Holding Corp., of Memphis, Tenn. White Horse, formerly Pi Kappa Alpha Holding Corp., owns a fraternity house at 177 Belmar Ave., Morgantown.

The house was insured by Fulcrum when it was heavily damaged in March 1998 after a party turned into an early morning trashing of the three-story brick structure.

The Pi Kappa Alpha fraternity surrendered its charter the same day and was expelled by WVU.

GAB Robins North America Inc. is the adjuster Fulcrum hired to estimate the repair cost of the damages. GAB agreed to pay White Horse $50,000.

The litigation began when Morgantown attorneys William Brewer and Bader Giggenbach sued fraternity members on behalf of White Horse.

Fulcrum intervened in the suit and filed third-party complaints against the fraternity and the holding corporation, to which White Horse responded with counter-claims.

According to the suit, on April 22, 1998, GAB representative Fred Rusmisell attended a meeting at the Morgantown Police Department, during which Matthew Imbach, president of the fraternity's local chapter, attempted to "identify those persons involved in the destruction of the property in exchange for immunity from criminal prosecution or a civil suit."

Fulcrum, its attorney, Rusmisell and GAB allegedly refused to release Imbach, who then refused to disclose that information.

Some 63 days later, the suit states, Rusmisell sent White Horse a letter estimating the damages at just under $17,000, but not itemizing them. White Horse wrote back, requesting an itemized damage estimate, but received a reply "almost 40 days later" telling the firm "we are unable to provide you with this estimate, as it is the property of your insurance company."

The suit accused GAB of negligently and maliciously attempting to have White Horse's executive housing officer, Daniel W. Corah, sign a form Rusmisell sent him which would have settled the claim at "a mere fraction" of the damages.

Fulcrum was accused of negligently and maliciously refusing to act in good faith, with such frequency throughout the pendency of White Horse's claim "as to indicate a general business practice" and to constitute violations of West Virginia's Unfair Trade Practices Act.

On Oct. 23, 1998, the suit alleged, Rusmisell again inspected White Horse's property and increased the damage estimate to nearly $41,500. Wednesday, Giggenbach said in 1999 Fulcrum paid White Horse $65,500 for damages to the house and expenses incurred to protect it after the damage.

White Horse claimed that Rusmisell negligently adjusted its insurance claim because he was unqualified and lacked general knowledge of construction. It also claimed that Rusmisell failed to include loss of rent, which was covered by the Fulcrum policy.

Giggenbach also said Fulcrum later paid White Horse $14,000 for lost rent.