Blowing the Roof Off of a Rock N’ Roll Insurance Case

I met Peter Lattey at West Coast Casualty’s Construction Defect Seminar in 2012. Over lunch a few months later, he told me the story of his involvement representing the respondent in Sequoia Insurance Company vs International Recording Corporation. As Peter’s story shows, there are no typical days for professionals working in architecture, engineering and construction forensics.

Two weeks after I was engaged on this case, our client was charged with arson and arrested. He spent the weekend in jail. After he was released on bail, we went to work.

About 12 months earlier, at 8:00 AM on a peaceful Sunday morning, a natural gas explosion blew the roof off our client’s recording studio. There were pieces of plywood and debris scattered a half a block away. Luckily no one was hurt.

It took the Burbank Fire department several hours to quell the blaze. By the time the fire was out, half the building had been gutted and the rest was a shambles. 20 years of building a recording studio business was gone. He lost his business and all the memorabilia from the various groups and films that were recorded there.

That’s Our Story, and We’re Sticking To It…

Of course the owner immediately called his insurance company. They sent out their fire expert who did his investigation before the fire department started theirs. He quickly concluded that our client had set the fire by opening a gas line in the mechanical room and then running out of the building to await the inevitable explosion.

The investigators also claimed to have found evidence of accelerants, (things like gasoline, for example), at a number of locations in the building. Based on this, the insurance company refused to pay his claim for $1.4M. I was brought in, along with several other experts to investigate the fire/explosion and to determine where the explosion really started and what caused it.

From the outset, the insurance claims manager appears to have decided that this was a case of arson. They investigated by looking for evidence that supported this belief. Facts and evidence to the contrary were simply ignored.

We took a different approach. Our approach was to look at all the facts to understand how the explosion actually occurred. We accepted all evidence we found and then let the facts speak for themselves. If our client had in fact set the explosion, we wanted to know that as soon as possible.

Complications & Missing Evidence

This was a complicated case due to the complex nature of the building and the fact that we were starting our investigation almost a year after the explosion. Much of the original evidence had been removed or destroyed. The insurance investigators had pawed over the building, tossed trash into a big heap and removed critical gas lines and other evidence.

It was impossible to tell how the building had looked before the explosion or right after it. And of course the building had been exposed to the weather for 12 months. It was a horrible mess.

What appeared to be a simple concrete block warehouse from the outside had a very complicated interior. The building was divided into three recording studios. There were offices, restrooms, two mezzanines, a mechanical room, huge racks of recording equipment, double walls, triple walls, false ceilings and sealed attics. We needed a model so we could understand the building and how the fire occurred.

Low Tech, But High Fidelity

We needed a model of the building, and we needed it to be accurate and produced quickly. We chose to build a physical model instead of a 3D computer model. This was distinctly low tech but proved to be exactly the right decision.

The foamboard model cost a quarter of the computer model. After we had assembled the information on the building, it only took a week to build. But far more important was the usefulness and functionality of the physical model.

An electronic model requires a computer and skill to view it on screen. It is also inherently untrustworthy. Computer models are faked or tweaked every day. A physical model is inherently more trustworthy, can be viewed directly without any technology and is understood by everyone.

The Side With The Best Evidence Often Wins

The physical model was submitted as an exhibit and remained on the courtroom table during the trial. It could not be ignored. It was repeatedly referred to by all attorneys.

Points were made by lifting off the “roof” and looking inside to see exactly how things were configured. While the real physical building could not be brought into the courtroom, the model on the table substituted perfectly for the real building.

At one point the defense introduced a superb computer generated model to support their theory of how the explosion had occurred. Their expert had spent hundreds of hours generating this. I pointed out several features on the model that the computer model was missing. These features demonstrated that their computer model was invalid. As a result, the court rejected their explosion model.

Reconstructing The Disaster

We made our model from construction drawings of the original construction, aerial photos, descriptions provided by the owner, photos taken during construction and from physical measurements of the ruined building. The drawings were incomplete, the aerial photos were of poor quality, the owner’s memory was not perfect and much of the building was in ruins.

The model wasn’t fancy, but everyone who looked at it could understand exactly how the building was configured before the fire. It was accurate enough that it was never challenged by the insurance attorneys.

While we were building the model we visited the wrecked building several times with the owner and a fire expert to see what we could observe. This was like an archeological dig. We used our eyes and our experience to see what was there. We found several key things.

  • The mechanical room where the insurance company investigators said the explosion originated, had no evidence of a fire or an explosion.
  • There was a mechanical time clock for the exterior lights located at the opposite side of the building from the mechanical room. The clock was badly burnt and stopped at a few minutes after 8:00 AM, the same time as the explosion.
  • The insurance investigator said that the explosion had occurred on one side of an access door and spread through it. But the door was blown off its hinges in the opposite direction and the wrong side of the door was charred.
  • The reinforced block wall beside the time clock was cracked and displaced outward 1.5 inches. Photos taken before the explosion showed this wall as undamaged. It would take a serious force to crack this wall.
  • According to the insurance investigator, the fire spread from the mechanical room into the Foley studio and then burned out the ceiling of this studio. We doubted this. Buried under a pile of ceiling structure and trash placed by the insurance company’s investigators, was a large section of undamaged carpet. This invalidated their theory.
  • From an aerial photo, I could see that the mechanical room had several roof vents that would have allowed natural gas to vent out. This made the beautiful and expensive explosion propagation video of the insurance expert irrelevant.

Trial Pro Tip: Make Sure You Have All The Experts You Need

The insurance company had 12 different experts including several PHD’s and experts in gas diffusion and explosions. However, they didn’t have an architect who understood basic building codes that define how buildings are built. As a result, their investigation missed many critical points.

Amongst other things they didn’t realize that there was a one hour fire wall between the mechanical room and the rest of the building. This is standard on all commercial buildings but their experts didn’t know that or simply ignored it.

Conclusion

The final outcome of the case was an award of $14M for building damage, loss of income, attorney’s fees and interest, all arson charges were dropped, and the claims manager at the insurance company was looking for a new job.

Sweet.

There are two morals to this little story. First, you should investigate a fire or any other situation with an open mind and let the facts tell you what happened rather than trying to force the facts to fit a preconceived conclusion. Second, if the case involves a building, get a good technical architect on your team.


About the Author

Peter Lattey is a licensed architect with over 35 years of experience on most building types. His experience encompasses both the architectural and construction management areas of construction. He has played in a key role in the construction of major institutional, commercial, residential and recreational buildings. He has practiced in the USA, Canada, Australia, Papua New Guinea and Germany. He has provided expert witness testimony on numerous cases. He has been involved in the investigation of seismic, product defect, construction defect, construction delay, scaffolding collapse, water intrusion and fire cases. He worked in the both the original construction of the World Trade center and the investigation after 9/11.

In his spare time he is a sailor and an internationally exhibited wood sculptor.

peterlattey.com

search previous next tag category expand menu location phone mail time cart zoom edit close