Cases & Deals

Los Angeles County MTA recovers from insurance company in successful arbitration arising from El Niño storms

Clients Los Angeles County Metropolitan Transportation Authority

On behalf of Los Angeles County Metropolitan Transit Authority (MTA), Jones Day secured the recovery of $2.54 million from Allianz Insurance after a successful arbitration ruling in a builder's risk insurance claim. MTA's claim in this case was for builders risk insurance coverage for the extensive damage that occurred during construction of subway stations in Hollywood, California caused by the massive El Niño rainstorms of November 1997 and February 1998. Nearly all the levels of the stations and side structures were affected, as were mechanical and electrical equipment and connecting corridors. Allianz Global Risks (Allianz), the builder's risk insurer, was contacted and inspected the station damages.

In August, MTA recovered $2.54 million from Allianz Insurance after a successful arbitration ruling. The arbitrator ruled that Allianz applied the wrong deductible, and also rejected Allianz' defense that MTA's damages were barred under the policy's consequential loss exclusion. A significant victory for MTA in the case was the arbitrator's ruling that the rainstorm damage was not "water damage" under the insurance policy's unique definition of water damage.

MTA v. Allianz Global Risks