In October 2017, the hotel’s agent Madison Hospitality Management signed an agreement with NYC-based human services organization Acacia Network Housing to provide reservations for 74 rooms and allow Acacia to offer supervised temporary housing to homeless families for three years.
According to the lawsuit, MAve discovered “substantial, direct physical loss and intentional damage” to its guest rooms, hallways and other common areas after Acacia and the families participating in the shelter program all left on October 2020. The hotel emphasized that the damage sustained was beyond regular wear and tear, including “numerous punctures in walls and ceilings,” as well as vandalized and defaced furniture, headboard covers, carpeting, and wall hangings.
“Plaintiff’s loss and damage were not caused by wear and tear,” the lawsuit said. “Its loss and damage are not attributable to normal use or gradual deterioration. Instead, its loss and damage were caused by abnormal use and deliberate destruction.”
MAve said in its complaint that it had submitted a claim for coverage to its insurers on January 06, 2021. But third-party policy administrator Vanguard Claims Administration denied coverage for the claim in April.
“Vanguard’s cursory letter stated that there [sic] no coverage under the policy for the damage to the interior building and contents ‘because our investigation determined that … [this] damage was caused by normally expected wear and tear over a three-year period and not from the reported vandalism,’ and ‘the policy excludes damage caused by wear and tear,’” the hotel’s complaint said.
The hotel has maintained that the letter did not define “wear and tear,” and that the phrase “normally expected wear and tear” does not appear in the policy.
Law360 reported that MAve’s lawsuit asserts counts of breach of contract. The complaint also seeks a court declaration that it is entitled to at least $1 million in coverage for its losses and damages. MAve is also seeking recompense of lost business income in excess of $1 million, saying that the damages it sustained and the delay of the insurers meant that it had been unable to perform repairs and reopen the business since October 2020. The hotel also mentioned in its suit that it is currently in default on its mortgage.