The owner of Blackjack Cove Marina in Tennessee is being sued by his insurance company, which said he took advantage of a 2009 storm to hook the insurer into millions of dollars worth of renovation costs.
However, owner Barton Bagsby said he had invested millions more than the insurer paid out in order to improve the facility and that he is trying to get reimbursed based on the "replacement value" policy he purchased, the Nashville Business Journal reports.
New Hampshire Insurance Co., which is part of AIG, filed suit Monday in U.S. District Court.
At stake is nearly $2.6 million that the insurer has already paid out for marina repairs, as well as another $1.1 million in additional claims.
The marina on Old Hickory Lake was heavily damaged by an April 3, 2009 storm, just days after Bagsby bought it for $2.5 million. Bagsby said that while he wanted to buy a "cash value" policy for the marina, New Hampshire Insurance Co. wouldn't write a policy unless it was for replacement value, according to the report. Bagsby said he did not have time to find another insurance carrier before closing on the purchase.
Bagsby reportedly spent nearly $5 million improving the marina, in addition to the money he received from New Hampshire Insurance Co.
In its suit, the insurer describes the overall facility as having been in poor condition prior to the storm.
But Bagsby told the Nashville Business Journal that portions the insurer described as being in "above average" condition made up 90 percent of the insurance claim. Much of the facility was closed during the 2009 boating season because of the storm damage.