PARIS — A warehousing and transportation company that suffered $5 million worth of damage in a three-day fire last year has sought a court order to speed the adjustment of insurance claims, saying it risks losing customers who lost product.

NEPW Logistics is seeking declaratory relief from Travelers Indemnity Co. and Crum & Forster. According to NEPW lawyers Louise K. Thomas and Lucus A. Ritchie, both Travelers and Crum & Forster have refused to adjust and pay the claims of NEPW’s customers.

“Instead, both Travelers and Crum & Forster have spent their energy pointing their fingers at each other, ignoring the documentation in support of the customers’ claims that they have had in their possession since January 2009, and generally disregarding the damage their intransigence has caused their insured, NEPW,” according to the complaint.

In December, fire broke out at the railroad loading dock of NEPW’s 233,000-square-foot warehouse on Pine Street in Paris. The blaze was contained after three days of firefighting efforts by 53 fire departments involved directly or indirectly.

According to the lawsuit, the fire destroyed 10,000 tons of pulp and paper worth more than $5 million. Drew Gilman, president of NEPW, said 13,000 tons of paper were damaged, and the company has recently finished inspecting and auctioning off that product. He said $400,000 has been spent on repairs to the warehouse.

The company said it had a $5 million legal liability policy from North River Insurance Co., an affiliate of Crum & Forster. NEPW said Travelers Indemnity Co. provided a $2 million commercial general liability policy and a $9 million excess liability policy to Bancroft Contracting Corp. of Paris.

In the fall of 2008, Bancroft contracted with NEPW to do roof repair work at the warehouse. At that time, Thomas and Ritchie state that Bancroft agreed to indemnify NEPW from all claims arising from the work, and included NEPW as an additionally insured party under Bancroft’s liability insurance policies.

The Maine State Fire Marshal’s Office determined that slag from welding work being done on the roof ignited bales of shredded paper in the warehouse. Thomas said Friday that NEPW will be filing a separate complaint against Bancroft that will seek damages.

NEPW is accusing the insurance companies of neglecting to review claims by customers, and is saying that each company is refusing to handle the claims because they believe the other company is the primary insurer. The lawsuit states that NEPW has incurred personal expenses in defending and adjusting the claims of its customers.

“We’re neutral on what the insurance carrier pays,” NEPW attorney Thomas said. “At this point, they haven’t even been willing to take in a claim and make an offer to the customer, which is the principal complaint.”

According to the complaint, NEPW has been seeking to resolve the claims in a timely matter to maintain positive relationships with its customers, primarily a small group of Canadian-based pulp and paper manufacturers.

“The customers have been extremely patient, given the circumstances,” Gilman said. “We have acted as their advocate throughout the process.”

In an April e-mail to a lawyer for Crum & Forster, Thomas said that Canfor, a paper and lumber company based in Canada and NEPW’s largest customer, was moving its product to a competing warehouse due to the delay in adjustment and payment. Canfor lost 2,500 of 9,500 tons of paper pulp stored at the Paris warehouse, an estimated loss of more than $1 million.

However, Gilman said that Canfor returned to being an NEPW customer after briefly taking its business to another company.

Thomas said the Paris Fire Department unsuccessfully sought a $46,000 claim to reimburse its response costs.

NEPW is asking the insurance companies to cooperate to adjust and pay the claims and resolve the dispute over which company is the primary insurer.

Thomas said she believes the lawsuit will be resolved within the year.

mlangeveld@sunjournal.com

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