Lutsen owner sues insurer for denying $16 million fire claim

Jan. 27—DULUTH — The business owner accused of burning down the historic Lutsen Resort lodge nearly two years ago is now suing his insurer for refusing to pay out a $16.5 million claim.

Bryce Campbell, through his North Shore Resort Co., filed the case against Michigan-based Owners Insurance Co. in U.S. District Court on Friday — the same day the insurer formally denied liability for the loss, according to the complaint.

The North Shore landmark

burned to the ground in the early morning hours of Feb. 6, 2024,

leaving only the foundation and a pair of chimneys standing among the charred rubble of the iconic lodge that had stood on the shore of Lake Superior since 1952.

Campbell has repeatedly denied any involvement in the fire, but he was

arrested and charged in State District Court last month

following a lengthy investigation led by the Minnesota Bureau of Criminal Apprehension and the State Fire Marshal.

The civil complaint does not address any specific facts or allegations related to the fire and the investigation. It simply notes Campbell "timely made a claim for coverage ... submitted satisfactory proof of loss and complied with all other requirements of the policy and conditions precedent to coverage."

The complaint contends Owners breached that contract, seeks an appraisal to "conclusively establish the amount of its loss" and asks for 10% annual interest on the money Campbell is allegedly owed.

The document does not identify the total amount of Campbell's claim, but the criminal complaint revealed that he was seeking at least $16.56 million.

Campbell, 41, had increased the insurance policy several times since

purchasing the property for $6.75 million in 2018.

Records cited in the criminal case indicate the policy went from $8.5 million to $13 million in the two years before the fire.

The property's appraised value was on the rise, and he was completing an extensive renovation with plans to open guest rooms on the long-shuttered third floor of the lodge.

Authorities said Campbell was in serious financial trouble and had seemingly joked about burning it down in the days before the fire. His three businesses reportedly had more than $14 million in past-due and near-due debts, and just $34,000 in their collective bank accounts.

He subsequently

faced a number of lawsuits from contractors, employees and cabin owners

seeking unpaid debts, and a judge stripped him of control of Superior Shores Resort in Two Harbors.

The criminal complaint alleges that Campbell was inside the Lutsen Lodge less than an hour before the smoke was first reported and that a possible accelerant was found on a partially disassembled water heater in a basement boiler room.

Insurance investigators interviewed Campbell several times and worked closely alongside state authorities at the fire scene, according to the criminal filings. His claim attributed the loss to a "fire of unknown origin" and he attested that it was not the result of any intentional act.

The civil complaint was filed by Duluth attorney Scott Witty and Jason Liss, a property insurance litigation specialist based in Michigan. Owners, a subsidiary of Auto-Owners Insurance Group, has 21 days to file a formal answer.

The case has been assigned to Magistrate Judge Leo Brisbois in Duluth and District Judge Eric Tostrud in St. Paul.

Campbell, a Canadian citizen,

posted a $100,000 bond to be freed under pretrial supervision

after he was charged with three counts of first-degree arson and one count of insurance fraud. His next court appearance is scheduled for March 9.

The criminal case has been assigned to Judge Michelle Anderson, of Virginia, as Campbell exercised his right to remove Judge Steve Hanke, the lone North Shore judge, who had presided over his numerous civil entanglements.

It remains to be seen how quickly that case will proceed to trial, as attorneys have cited voluminous evidence and Campbell may consider pretrial challenges to probable cause and constitutional issues. It's also unclear whether the case will be heard in Cook County or moved to another courthouse.

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