$10 million awarded in Libby fire

LIBBY — The Lincoln County Port Authority has been awarded a $10.047 million judgment against its insurance provider for property losses in the Feb. 25, 2010, fire that destroyed the former mill building known as the Plywood Plant.

The decision, against Allianz Global Risks U.S. Insurance Co., was handed down in the Lincoln County District Court on July 31. Judge James B. Wheelis presided in the case, which the attorney for Lincoln County Port Authority believes will be appealed.

“We do anticipate an appeal,” said R. Allan Payne, the Helena attorney with Doney, Crowely, Payne and Bloomquist.

The plant, which was operated by the Stimson Lumber Co. until it closed its doors in December 2002, was deeded to the Port Authority after the closure.

“It was a huge building,” said Paul Rumelhart, who administers the Port Authority property. “It was 4 1/2  acres, something like 250,000 square feet.”

Key to the decision was the insurance agreement that insured Port Authority property within 1,000 feet of its offices, which included the Plywood Plant.

“Clearly, the mill was within 1,000 feet, but the insurance company tried to see it differently,” Rumelhart said. “The building seemed like it would be covered from what I read, but you never know. That’s when we got Allan Payne involved.”

Payne, a Libby native and 1980 Libby High School graduate, agreed to take the Port Authority’s case on a contingency basis.

“It was a wise move by Paul (Rumelhart),” Payne said. “Yes, we [the attorneys] worked on this case for two-plus years, but if we lose, we get nothing and the Port Authority pays us nothing,” Payne said. “As it is, and again I’m sure it will be appealed, it may take another two years to see anything either way.”

Payne said five or six attorneys have worked on the case for the 29 months since the fire.

The court ruled that the Port Authority will receive payment for the loss, set by an Appraisers’ Report and Stipulation at $6.06 million. Plus, there is interest accrued from the date of the fire until Aug. 1 at $1,660.54 per day, which totals $1.47 million. Attorney costs and fees awarded add an extra $2.511 million to the total.

“You have to realize the Port Authority isn’t paying the lawyers,” Rumelhart said. “It’s coming out of the judgment. Without them, we get nothing. We were going nowhere with the insurance company.”

Payne said this is just one settlement. There is another suit pending for property lost in the fire that did not belong to the Port Authority.

Realizing payment may still be some time in the future if the decision is appealed to the Montana Supreme Court, but Rumelhart was optimistic.

“Hey, we had nothing before. If we get $6 million in all this, it’ll be great — money we didn’t have that we can spend for infrastructure out here,” Rumelhart said. “We’d like to do so many improvements. The roads in Guatemala are better than we have out here.”

Alan Gerstenecker is the editor of The Western News in Libby.