Suit filed over Idaho Club insurance coverage
News editor
SANDPOINT — Owners and operators of The Idaho Club have filed a negligence suit against its insurance providers for allegedly steering them away from business interruption insurance 19 months before the golf resort’s iconic clubhouse burned to the ground.
The suit filed in 1st District Court seeks in excess of $10,000 in damages to be proven at trial. The suit was filed in Kootenai County on May 7.
Named as defendants are American States Insurance Co., Safeco Insurance Co., and Harris Dean Insurance of Sandpoint. Plaintiffs include Idaho Club Management Co., Idaho Club Properties, Pend Oreille Bonner Development and Idaho Club Land Co.
The plaintiffs allege in the suit that they began discussions with Angela Potts of Harris Dean in May 2007 to obtain coverage for The Idaho Club. Potts, the suit said, was acting as an agent for principals Harris Dean, American States and Safeco.
The plaintiffs claim they asked Potts about obtaining business interruption coverage as a component of the club’s overall policy. Business interruption insurance provides compensation to a company for income lost due to disaster-related damage such as a fire.
At the time of the inquiry, The Idaho Club was in the initial stages of development and operations, according to the suit.
Potts, the suit alleges, incorrectly advised the plaintiffs that interruption coverage would be of no benefit
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to The Idaho Club because it was in a startup phase and not expected to generate operational profits for at least two years.
A fire of undetermined origin destroyed the clubhouse on Dec. 18, 2008.
“The Idaho Club has an obligation to continue to provide its membership with services previously provided through The Idaho Club clubhouse and related improvements and personal property. Said obligation continues regardless of the present status of the profitability of said operations,” plaintiff’s counsel John Magnuson said in the complaint.
Magnuson argues in the suit the plaintiffs expressed a desire for complete coverage and Potts knew or should have known the amount and type of coverage necessary to meet the club’s goal. Magnuson contends that the negligence resulted in the club being underinsured.
Potts declined comment on Tuesday.
The cause of the fire which leveled the 30,000-square-foot clubhouse is listed as undetermined, according to a Northside Fire District investigative report.
The building’s value was estimated at $9 million and its contents were valued at $1.5 million, the Northside report indicated.
Bonner County Sheriff’s detective reports state nobody was in the clubhouse when the fire started, although Idaho Club employees and plumbing contractors were there earlier in the day because of damaged water pipes.
The fire occurred amid a cold snap in which temperatures plunged below zero.
A day before the fire, the clubhouse hosted a luncheon and attendees said it was so cold indoors that they had to remain in their coats, sheriff’s reports said. Three Amigos Plumbing & Maintenance was summoned to check on the boilers, but they appeared to be in working order.
On the day of the fire, Idaho Club employees told sheriff’s investigators they noticed water on the floor in the clubhouse’s foyer, the reports said. A utility control room containing panels of circuit breakers and electrical boxes was located directly below the foyer.
A bartender told investigators he saw water dripping onto the electrical panels. The bartender, Spencer Clark, also reported seeing ceiling-mounted lighting fixtures hanging by their wires and dripping water in adjacent employee locker rooms, sheriff’s reports said.
Todd Jansen of Three Amigos told Det. Phyllis Jay he suspected arcing electricity might have caused the blaze, one of the reports indicated. An electrical engineer who designed, but didn’t install, the clubhouse’s electrical system reportedly told an East Pend Oreille Fire District official he suspected golf cart battery charging units in the clubhouse’s daylight basement were to blame.
However, Idaho Club owner Chuck Reeves, disagreed with that conclusion, sheriff’s reports indicated. Reeves told Jay the chargers were brand new and that thousands of clubs use the units with no problems.
Northside Fire Chief Brad Mitton told sheriff’s investigators the structure was fully engulfed by flames when they arrived. Mitton said the fire was so hot firefighters would not have been able to stop the fire with the available water.
Mitton, according to sheriff’s reports, said two hydrants were inoperable because Lake Pend Oreille’s water level had been lowered and a third hydrant that was supposed to be working failed for unknown reasons.
The Northside and sheriff’s reports were obtained by The Daily Bee through Idaho’s public records law.
The Idaho State Fire Marshal’s Office did not investigate the fire, said Deputy Fire Marshal Mark Aamodt.