Nursing home 1, balky insurance company 0 after natural disaster

An insurance company must pay for repairs and upgrades to a Florida nursing home after a federal judge ruled that the statute of limitations began when the state issued new regulations, not when the claim was originally filed following a hurricane. 

Arch Specialty Insurance must pay the total renovation costs to Kingseal LLC, which operates Desoto Health and Rehab in Arcadia, FL, a facility that was damaged in Hurricane Irma in September 2017. That’s thanks to a ruling Friday by US District Judge Sheri Polster Chappell.

The original estimate for the repairs was $1.23 million, but in January and May 2018, the state Agency for Health Care Administration and DeSoto County both notified Kingseal that it would need to make upgrades that would require demolishing and remodeling the entire facility to comply with all codes. That significantly increased the facility’s costs.

Court documents, though, indicate that the amount approved by the insurance company “predated” the nursing home’s communications with the state and county “so it did not account for additional repair and renovations.” The insurer argued it was not liable for those additional costs that came to: 

• Construction work totaling $3.7 million for which the insurer paid $1.1 million;
• $156,000 for personal property damage for which the insurer paid $44,000;
• $4.4 million lost business income due to not being able to use portions of the building during the renovation, for which the insurer paid $1.8 million. 

The insurer argued that it paid what it was responsible for within the five-year statute of limitations from the date of damage in September 2017. 

“To be clear, Arch does not contend that Kingseal’s claim falls outside the policy’s scope,” Chappell’s ruling states. “It argues only that the Court should dismiss this case with prejudice because ‘the date of loss occurred more than five years before [Kingseal] filed suit.’”

The nursing home argued, though, that the insurer’s “interpretation is too restrictive” since it was required to ensure the facility was brought up to code through the renovations process, thereby shifting the date on which the statute of limitations started to 2018 instead of 2017. 

“Kingseal’s ‘loss’ here did not result from Hurricane Irma, nor what it triggered by the storm’s landfall,” Chappell wrote in her ruling. “Instead Kingseal incurred a loss when the AHCA and DeSoto County required Kingseal to undertake additional repairs and renovations to bring its facility into compliance with applicable standards and to satisfy [state and county codes].”

Neither Kingseal nor Arch Specialty Insurance returned calls from McKnight’s Long-Term Care News on Monday for comment.