Hotel dispute may be at the final hurdle

(CNS): While the legal arguments regarding the former Hyatt hotel are not over, the hotel management has indicated that a resolution appears close at hand. Having recently revealed the details of its long standing insurance dispute, the management at Grand Cayman Beach Suites, formerly the Hyatt, has announced that Houston Casualty Company’s co-insurers have finally paid the insurance policy proceeds which have been agreed with them since 11 July 2008. Bill Powers, the hotel’s general manager, said this move reinforced the validity of earlier public statements made by the Hotel and demonstrated the benefits of a free and open press in Cayman.

He said as a result of this latest development, Houston Casualty Company had to decide whether it will pay for the damage caused by Hurricane Ivan or reinstate the Hotel in accordance with the terms of the insurance policy.

“There is a lot more at stake here than the reinstatement of our Hotel since, as previously stated, given Cayman is in an area which is prone to hurricanes, the failure of insurance companies to honour their obligations under insurance policies and the ability/inability of the local judiciary to properly and promptly deal with disputes relating to insurance claims will be key issues for most local citizens and businesses on the Island as well as the Sister Islands,” Powers said.

The owners of the hotel have been in dispute with their insurance companies for more than five years, since Hurricane Ivan destroyed the northern side of what was formerly the Hyatt. The owners were able to salvage the southern side of the hotel site, which was re-named the Grand Cayman Beach Suites after the Hyatt removed its branding support as the insurance problem rolled on.

Powers claimed that the legal wrangling was also impacted by the unlawful arrest during the discredited Operation Tempura investigation of Justice Alex Henderson, who had presided over some of the legal proceedings in the Hyatt dispute.

The general manager said that after Justice Henderson’s arrest on 24 September, Houston Casualty Company itself finally dropped its unreasonable conditions and agreed to pay the insurance policy proceeds due to the hotel without continuing to insist on its earlier unreasonable terms.

“However, following Justice Henderson’s reinstatement as a Judge in Cayman, Houston Casualty Company has tried to renege from paying the agreed insurance policy proceeds due to the Hotel,” he stated. “In anticipation of Houston Casualty Company’s decision, which the Hotel owner is hopeful of now finally receiving imminently following the benefits of the increasing openness and transparency resulting from the recent press articles relating to this matter, the Hotel owner will begin undertaking a further assessment of the state of the buildings as they now stand in order to establish the best way forward.”

Powers explained that as soon as Houston Casualty Company decides which option to pursue, the hotel’s owner can act accordingly. He said that whatever option the hotel takes, because there is a risk involved, the insurance firm may subsequently seek to argue that the hotel owner should have done something else instead. “If the Hotel owner chooses to tear down the damaged buildings and then rebuild, Houston Casualty Company may subsequently seek to argue that it would have been better to repair the existing shell,” he added. 

The owners, Powers stated, are particularly wary about the insurer’s intentions. “Houston Casualty Company has already sought to wrongly void the insurance policy on false pretences in a desperate ploy, concocted just a few days before the hearing, to escape Summary Judgement when Houston Casualty Company had no genuine defence as both parties’ real figures put the loss at well above Houston Casualty Company’s policy limit,” Powers stated. “Remarkably, Justice Henderson found in favour of Houston Casualty Company at that hearing for Summary Judgement, following which Houston Casualty Company has insisted that Justice Henderson continues to hear the matter even though he is not seized of it.”

Powers claimed that the fact that these are false pretences by Houston Casualty Company is clearly evident because all the other 15 insurers have now paid the agreed policy proceeds. “Yet, in stark contrast to all the other 15 insurers, Houston Casualty Company has still not paid a single cent under the same policy, despite its clear obligation to either pay for the damage caused by Hurricane Ivan or, at its option, to reinstate the Hotel,” Powers said.

Both the previous government and the current administration have raised their concerns about the long standing legal dispute because of the negative impact the deterioration of the derelict site has had on the location. The site issituated in the heart of the Seven Mile Beach Tourism area and real estate experts have alsoindicated that the situation has had a detrimental impact on local property prices in the area, in particular the Britannia, which had access rights with the condos to the former hotel.