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A Michigan Hotel Settles Insurance Dispute Over a $4M+ Fire Loss

An extended stay hotel, its insurer, and its mortgage bank have told a Michigan federal judge that they settled an over $4 million dispute over insurance coverage related to a fire that tore through the property almost five years ago, killing a family of six.


A Michigan Hotel Settles Insurance Dispute Over a $4M+ Fire Loss

Sodus Hospitality Inc., which owned the Cosmo Extended Living Hotel in Benton Harbor, Michigan, said in a joint status report filed alongside United Specialty Insurance Co. and State Bank of Texas that the parties have settled a parallel state court case, and now plan to seek dismissal of the federal case that had been stayed pending the state case's outcome.


Sodus initially sued United Specialty in January 2020 following the July 28, 2018, fire that destroyed the Cosmo hotel building and business personal property, according to the complaint. The suit sought more than $4 million, claiming United Specialty breached a commercial property insurance policy by failing to pay the hotel company's claim that the property burned down due to an accidental fire.


Local news reports at the time said the massive fire killed a family of six, including a woman and her children, and also sent several others to the hospital.


United Specialty then sued State Bank of Texas in 2018 as a third-party defendant in federal court, saying the hotel's mortgage bank was a "necessary and indispensable" party in the concurrent state court case and also belonged in the federal case.


Attorneys Rabih Hamawi, of The Law Office of Rabih Hamawi, P.C., and Joseph L. Milanowski, of Melamed, Levitt, Milanowski & Earls, P.C., represented Sodus.


If your insurance company has denied, delayed, or underpaid your insurance claim, contact Law Office of Rabih Hamawi for a case evaluation at (248) 905-1133 or www.hamawilaw.com.


Who is Rabih Hamawi?

Attorney Rabih Hamawi

Attorney & Counselor


Rabih Hamawi is a principal at the Law Office of Rabih Hamawi, P.C. and focuses his practice on representing policyholders in fire, property damage, and insurance-coverage disputes against insurance companies and in errors-and-omissions cases against insurance agents. He may be reached at (248) 905-1133.


A Michigan Hotel Settles Insurance Dispute Over a $4M+ Fire Loss

Disclaimer: This post is for informational purposes only. It does not create an attorney-client relationship, and isn't intended and should not be construed as the providing of legal advice.


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