Mill fire judgement upheld

The Montana Supreme Court has decided that the Lincoln County Port Authority will receive a multimillion-dollar judgment against the insurer of the property formerly known as the plywood plant. However, the justices also lowered the amount of money that the insurer would have to pay.

The state’s high court decided 4-3 on Tuesday to uphold a judgment by 19th Judicial Court Judge James B. Wheelis that awarded more than $10 million to the Port Authority in August 2012. The high court’s decision came with the stipulation that the Port Authority would receive a lesser amount than the original judgment because a portion of the building was already slated for demolition when the fire destroyed the rest of the building on Feb. 25, 2010.

At this point, it’s unclear how much money the Port Authority will ultimately receive. The case has been remanded to District Court to determine the final judgment amount.

The Port Authority’s attorney Allan Payne was pleased with the decision.

“Basically, the court ruled the Port does not get replacement costs on the $1.9 million area it had scheduled for demolition,” Payne said. “That will have to be recalculated.”

Allianz Global Risks Insurance, Co., which insured the plywood plant, appealed Wheelis’ decision to the state Supreme Court.

“The Port is pleased with the decision of Montana’s Supreme Court,” said Brigid Burke, executive director of the Kootenai River Development Council, the agency that oversees the Port property. “We have not reached the finish line with this case yet and will continue to work diligently toward a final decision.”

The plywood plant property was insured for more than $10 million. The Port Authority received a $3 million insurance settlement after the building’s roof collapsed as a result of snowfall during the winter of 2007 and 2008.

“I don’t know what the total package will be, but it will be something less than the $10 million it was insured for,” Payne said. “This decision was not a knock on Judge Wheelis’ ruling.”

The plant was operated by the Stimson Lumber, Co., for many years until the company closed its doors. It was deeded to the Port Authority after the closure.

During its heyday, the 250,000-square-foot plywood plant had a physical footprint of 4.5 acres.

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

Payne and a team of five or six attorneys worked on the case since taking the it now 47 months after the  blaze that brought the structure to the ground.