Taunton’s City Solicitor, Jason Buffington, communicated to the City Council during its November 27th meeting that his office has filed suit against the City’s insurance company Axis Insurance Company as well as its longtime insurance broker, the Farrell Backlund Insurance Agency. Farrell Backlund’s President, Russel Martorana, CIC, CWCA also is a named defendant. The lawsuit filed in the Bristol County Superior Court stems from the losses the City incurred in an August 17, 2010 fire which destroyed Taunton’s 100 year-old City Hall. The Law Offices of Attorney William T. Kennedy based in Quincy will be representing the City in this matter. Prior to 2010, The City of Taunton had placed its entire insurance portfolio with Farrell Backlund for over ten years, paying the agency an annual premium in excess of $600,000.
In a written communication included in the City Council Agenda, the City Solicitor explained his reasoning for filing suit:
“In 2011, the administration then in office settled the claim with the City’s then-insurance company, Axis Insurance. The total amount of the settlement was $4,818,345.45. Included in this amount is $1,587,905.41 in code upgrade expenses, recoverable depreciation, and reimbursement of the $100,000 deductible that Axis agreed the City would be entitled to if it met Axis’ arbitrary and unreasonable two-year deadline.
The City has not actually received this amount and Axis has refused to pay the same to the City. Thus, the City seeks damages against Axis in the amount of $1,587,905.41. The remainder of the damages sought in this case is against the City’s former insurance advisers….”
City Solicitor Buffington went on to explain that at the time of the fire, the City was “woefully underinsured” for any losses it incurred. Prior to the fire, the City’s insurance policy with Axis had a $1,000,000 limit for code upgrade coverage. Estimates, however, for the code upgrade expenses alone says Buffington have been projected to be in excess of $5,000,000.
In the legal papers filed with the Court, the City argues that it had relied upon the expert advice and counsel of Farrell Backlund to coordinate and meet the City’s complex insurance needs. As a result of the substantial loss the City has suffered and the lack of appropriate coverage that it claims to have had, it alleges that Farrell Backlund failed in its duty to properly advise and procure adequate insurance coverage to meet the expenses of a complete restoration of the historic building.
Mr. Buffington did note that his decision to sue the City’s longtime insurance broker, which also is based in Taunton, was done with a heavy heart.
“I am mindful of the fact that the City is initiating litigation against a local business. Please know that this was not a decision that was made lightly. It was instead a decision that was made after careful thought and consideration and after significant consultation with the City’s own expert in the field of insurance. At the end of the day, we had to make a determination as to what was in the best business interests of the City of Taunton…”
The Farrell Backlund Insurance Agency which can trace its roots back to 1858, employs a staff of 70 in six locations throughout Massachusetts: Taunton, Attleboro, Rehoboth, Dighton, Middleboro and Freetown. It boasts a client base of over 19,000 personal and commercial clients and has been designated a Five-Star Agency by the Massachusetts Association of Insurance Agents.
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