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Ruling against performing arts center in coverage dispute largely upheld

Posted On: Oct. 31, 2022 1:59 PM CST


An Odyssey Group Holdings Inc. unit does not have to pay the bulk of damages incurred by the partial collapse of a Mississippi performing arts center based on a policy exclusion, a federal appeals court said Friday, in largely affirming a lower court ruling.

In July 2017, the Jubilee Performing Arts Center in McComb, Mississippi, partially collapsed, according to the ruling by the 5th U.S. Circuit Court of Appeals in New Orleans in Hudson Specialty Insurance Co. v. Talex Enterprises LLC v. City of McComb.

Talex, the building’s owner, assigned its rights under its general liability policy to the city.

 Its policy with Odyssey unit Hudson allowed for the recovery of some expenses because of property damage. But an “owned-property exclusion” excluded expenses incurred for repair or replacement for damage to the property for any reason, including the prevention of injury to a person or damage to another’s property, the ruling said.

The city paid $369,320 for services to prevent injury to citizens or damage to nearby properties.

In the ensuing litigation, the U.S. District Court in Natchez, Mississippi, found that most of the city’s expenses fell under this exclusion, except for $6,372 in repairs to a flower bed and streetlight.

The appeals court largely affirmed the district court ruling, saying the exclusion “unambiguously excludes expenses … for any purpose, including mitigating potential harm to the public or adjacent buildings and limiting liability to third parties.”

The district court correctly found that the partial demolition, stabilization, clean-up and engineering fees fell under the exclusion, but the flower bed and streetlight expenses did not. It reversed the district court’s finding that $33,480 in police and fire department expenses fell under the exclusion.

Attorneys in the case had no comment or did not respond to a request for comment.