Dueling lawsuits filed over the Tenneva hotel collapse in downtown Bristol

BRISTOL, Tenn. — Dueling lawsuits filed in connection with the 2020 collapse of the Tenneva Holiday Inn in downtown Bristol will likely be heard by a jury in late 2023, federal court records show.

On Feb. 25, Cincinnati Insurance Co. filed a complaint in U.S. District Court in Greeneville for a declaratory judgment against Tenneva LLC, the company developing the hotel. The suit is about the insurance company's coverages of the property and what it believes it is required to pay.

A portion of the hotel, which had been under construction since 2019, collapsed on Sept. 25, 2020. The collapse left a mangled mess of steel and other materials on the property. No one was injured.

Tenneva claims its losses have exceeded more than $11 million.

Investigators for the two parties believe failing bearing walls on the second floor caused the damage, according to the court documents.

A declaratory judgment would be a legal determination by a court that resolves legal uncertainty for the litigants.

After Cincinnati Insurance filed its suit in federal court, Tenneva filed a counter lawsuit, saying the insurance company has failed to pay for losses incurred from the collapse.

The case is now pending a jury trial, which was recently set for Dec. 4, 2023. A booked civil docket has pushed the trial to Chattanooga, rather than closer federal facilities, according to court records.

Documents filed in Greeneville reveal that Tenneva reported a claimed loss to the property on Sept. 28, 2020. Shortly after receiving the claim, Cincinnati Insurance, which had issued Tenneva a builders risk policy for the construction project, proceeded to investigate, inspect and adjust the loss. On Dec. 16, 2020, Cincinnati Insurance informed Tenneva it would investigate the loss under a reservation of rights, which means coverage may not apply.

Cincinnati Insurance retained the engineering firm Thornton Tomasetti to investigate the collapse.

The firm said the partial building collapse was due to the failure of one or both steel bearing walls on the second floor. The walls failed under the weight of the precast planks, superimposed dead loads and the limited live loads applied to the planks at the time of the collapse, according to Thornton Tomasetti's findings.

Cincinnati Insurance provided Tenneva with the report, which identified the cause of the loss and all defects that contributed to the damage. It also included a report of damage directly attributable to the loss. The insurance company said it has issued and continues to issue payments for the covered damages, which it says are stated in its Builders Risk policy.

Tenneva, however, disagrees with Cincinnati Insurance and wants the insurance company to cover additional damages it says have resulted from the collapse, including costs in construction delays.

Cincinnati Insurance said that the collapse was caused by "defect, error, and/or omission in the design, specifications, construction, or workmanship of the subject property," and the cause is excluded from coverage under its policy, according to its suit.

Tenneva's counterclaim notes that it hired Simpson, Gumpertz & Heger to review the collapse and the entire building. It said Cincinnati Insurance's investigating company only reviewed the portion of the building that collapsed. To repair the property, Tenneva said it must identify all the defects and damages.

"By failing to identify such defects, Thornton Tomasetti failed to identify issues which existed in the collapsed portion as well," the countersuit states.

Simpson, Gumpertz & Herger determined that a few walls have buckled in the standing structure, and planking has cracked. Tenneva claims the buckling and cracking constitute resulting damage and should be covered by its insurance policy. Required shoring work of the structure also resulted in some additional damage by cutting through certain mechanical and wall system areas, the suit states.

"Critically, Cincinnati refuses to acknowledge the fact that Cincinnati's actions caused significant delay related to Tenneva's efforts to investigate and repair the Covered Property," the countersuit adds.

As a result of the collapse, Tenneva says its losses have exceeded $11 million, which has included shoring and demolition costs, repair costs, contractor and vendor costs and others. Tenneva said Cincinnati Insurance has refused to provide coverage of these losses, which it describes as a breach of contract.

Tenneva is asking the court to order Cincinnati Insurance to cover its losses, as well as statutory damages and any other costs the court deems appropriate. Cincinnati Insurance is asking that it only pay what it has already identified as covered costs.

Federal judge Travis R. McDonough is presiding over the case and has scheduled various hearing dates leading up to the trial, including identifying experts and other witnesses.

Earlier this year, the city of Bristol, Tennessee, issued a permit to allow for cleanup activities to take place at the construction site, according to Jon Luttrell, the city's director of community relations. Cleanup activities have been ongoing.

Last week, however, Luttrell said the city has yet to receive the full failure report or a plan of action for how the project will move forward. Once such a plan is received and approved, any necessary permits would then be reissued for construction work to resume, Luttrell said.