Millionaire Lawsuit Smolders After Recording Studio Arson

Jan. 10--While the owner of Tattooed Millionaire Entertainment admitted to providing fake documents to an insurance company after an arson fire damaged a Memphis recording studio, the owner says the insurer still should be on the hook for paying millions in claims.

Tattooed Millionaire owner Christopher C. Brown and two music artists who leased studios from Brown in the Midtown building at 904 Rayner contend that Hanover American Insurance Co. should pay up, federal court filings show.

Attorneys for Hanover, Tattooed Millionaire, Brown and the two people leasing studios -- John Falls and Daniel B. Mott -- have been trading allegations after Hanover in mid-October filed its federal lawsuit in Memphis.

Court filings show a number of developments since the insurer demanded that Brown and Tattooed Millionaire return $2.3 million and Mott and Falls each return $250,000 in insurance claim payments paid in the months following the Nov. 5, 2015 fire.

Hanover's attorneys contend:

* Brown confessed that he submitted fabricated documents to the insurer after the fire to prove purchases of recording equipment insured for a total of $10.5 million, including $5.5 million coverage for Brown. Hanover initially maintained that the equipment was never purchased and wasn't in the studio, formerly known as the Sound of Memphis, Kiva and House of Blues before Brown purchased it in 2014.

* Business records subpoenaed by Hanover "reveal additional conduct and actions on the part of all of the defendants which conclusively prove that each of the defendants misrepresented material facts concerning their claims with intent to deceive Hanover."

* "Brown used almost $1 million of insurance proceeds to make an all-cash purchase of a $1.2 million mansion, Brown has apparently squandered all of the $1.2 million paid to TME by Hanover for building repairs on 'touring with his band ... ."

Meanwhile, attorneys for the studio, Brown, Mott and Falls are firing back, maintaining that:

* Hanover had the recording studio inspected, including photographs and a report, to verify the equipment in the studio for which the company agreed to insurance coverage under state law. Forty-one witnesses provide statements about the existence and use of equipment, according to court records.

* Mott and Falls maintain that Brown's admission of submitting false documents they didn't know about should not allow Hanover to refuse business interruption insurance totaling $500,000 each or recording equipment claims of $2.5 million each.

* At a cost of $100,000, Hanover hired a company to pack up and move damaged equipment after the fire to a warehouse in Florida.

Brown, Mott and Falls told the insurer they believed local street gang members started the fire and stole most of the recording equipment before setting it, Hanover contends. Fire and law enforcement investigators told Hanover there was no evidence the three men were involved in the arson.

Parke Morris, one of the attorneys representing Mott and Falls, said he thinks the insurer has defamed his clients.

"It's a classic: a shotgun-pleading where they take the behavior of one defendant and take the position that everybody else is guilty of the same behavior, even though they have no proof of that," Morris said.

Bobby Leatherman, a lawyer representing Brown, highlighted testimony from an insurance adjuster.

"Contrary to Hanover's allegations that it insured $10.5 million worth of recording equipment that never existed, Hanover's executive adjuster has now testified, under oath, that neither Brown nor any defendants made any misrepresentations about the existence or value of equipment when they applied for and obtained the insurance coverage for which Hanover happily accepted premiums," Leatherman said by e-mail.

Emily Trevallion, a spokeswoman for Hanover in Worcester, Massachusetts, said in an e-mailed statement that "generally we do not comment on ongoing litigation, but we're looking forward to resolving this in the courts."

The latest action on the case before federal Judge Jon McCalla was a hearing on Friday as Hanover seeks to force Brown to preserve remaining insurance proceeds. Brown's mansion is up for sale, Hanover reported in court.

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