Homeowners Who Suffered Devastating Losses in 2020 Wildfire Sue Auberge Resorts for Negligence, Breach of Contract

NAPA, Calif., July 8, 2021 /PRNewswire/ -- Homeowners at a luxury wine country resort destroyed in a 2020 wildfire sued Auberge Resorts for breach of contract, negligence, violation of California law, and constructive fraud today, saying the management company dramatically reduced insurance coverage on the property four months before the blaze – and never informed them.

The plaintiffs owned units at Calistoga Ranch, a unique, world-famous resort nestled in a private canyon off Silverado Trail. A management agreement between homeowners and Auberge assigned the company the duty to maintain fire insurance sufficient to rebuild the resort in the event of a fire – a duty made all the more critical after a series of wildfires ravaged the region beginning in 2017.

Instead, Auberge secretly adjusted fire coverage limits downward by $75 million, leaving the resort woefully underinsured. In addition, the company included two of its own, unrelated resorts, Solage and Auberge du Soleil, on the same insurance policy. According to the insurers, that action substantially diluted the coverage available for Calistoga Ranch and was done without the knowledge of the plaintiffs.

As a result of Auberge's deceptive and negligent actions, the homeowners have little hope of recovering their losses – and it is highly unlikely the resort can be rebuilt.

"Watching a wildfire destroy your beloved home is a profoundly painful experience," said Nancy Serrurier, a Calistoga Ranch homeowner since 2015.  "But learning that Auberge secretly reduced the insurance coverage we needed to recover and rebuild? That was truly devastating. We placed our trust in Auberge, and the company violated it."

Opened in 2004, Calistoga Ranch was a premiere destination resort tucked away on 157 acres graced with ancient oak trees, a stream winding through the property, and miles of hiking trails. The serene property included 48 freestanding guest lodges, a working vineyard, a world-class spa with mineral spring waters, a fitness center, a private restaurant, retail shops, and other luxury amenities.

On October 27, the Glass Fire broke out nearby and quickly exploded in size, destroying homes, landmarks, wineries, and restaurants throughout the region. Tearing through the Calistoga Ranch canyon, it leveled everything in its path, including the homeowners' units and all resort amenities.

When homeowners turned to Auberge to file an insurance claim after the blaze, they learned of the company's deceptive actions, and discovered that the insurers claimed that fire policy limit had been reduced to less than $39 million – far below the insurance level specified in the resort's governing documents, and inadequate to cover rebuilding of Calistoga Ranch.

Filed in Napa County Superior Court, the lawsuit seeks at least $100 million in compensatory damages, as well as punitive damages, based on four causes of action, including breach of contract, negligence, violation of California law, and constructive fraud. Among other allegations, the complaint says that Auberge: 

• Breached its management agreement with homeowners by failing to maintain insurance sufficient to cover full replacement costs for the resort;
• Acted negligently, and in violation of its duties to homeowners, by failing to maintain sufficient insurance coverage;
• Knew, or should have known, that the insurance was insufficient, and failed to disclose it to homeowners;
• Failed to disclose to homeowners that the policy also included two other wholly unrelated Auberge properties as named insureds, an action not authorized by the management agreement; and
• Failed to disclose that the insurance procured for the 2020 fiscal year was substantially changed from prior years, providing dramatically lower coverage limits and significantly higher deductibles for fire losses.

The lawsuit was filed on behalf of the homeowners by the law firm of Fenton Grant Mayfield Kaneda & Litt, LLP. For more information, please contact Doug Elmets at 916-206-8662 or [email protected].

Contact: Doug Elmets(916) 206-8662

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SOURCE Fenton Grant Mayfield Kaneda & Litt, LLP