Opinion ID: 2639126
Heading Depth: 2
Heading Rank: 1

Heading: Facts Relating to the Building Coverage Claim

Text: John Deere began investigating the claims after the fire. In order to assess the damage caused by the fire, on May 1, 1997, a structural engineer inspected the premises and determined that the building was only partially damaged and that most of the structure was salvageable. However, the City of Nampa would not permit any repair or rebuilding of the structure unless it complied with setback requirements and the city's 100-year flood plain requirements. Prior to discovering the City of Nampa's position, Sprinkler suggested the use of contractor, Hanson Rice Construction (Hanson Rice), to develop the cost of repairs for the structure. On June 9, 1997, John Deere advanced a $50,000 payment to the Insured under the building coverage. On June 20, 1997, Hanson Rice provided a proposal for repair of the structure in the amount of $194,646.00. Sprinkler also asked Wright Brothers to bid the project to completely demolish the building and relocate it to meet the zoning requirements. On June 20, 1997, Wright Brothers provided a bid in the amount of $276,938.00. This bid did not include $32,897.00 for the wooden mezzanine shelving, which would have brought the bid to $309,835.00. Nearly one month later, on July 21, 1997, Hanson Rice provided another bid in the amount of $361,462.00. Since John Deere had never received information that Sprinkler elected to have the building rebuilt, John Deere calculated the actual cash value of the building using Hanson Rice's original repair proposal in the amount of $194,646.00. John Deere's independent adjuster, Bill Goodner of Intermountain Claims, applied a 37% depreciation factor to arrive at an actual cash value of the building of $122,627.00. After subtracting the advance of $50,000 and the $500.00 deductible, on August 6, 1997, John Deere paid Sprinkler $72,127.00, which was accepted.