DALLAS -- The West Independent School District in central Texas is suing its insurance provider to cover the district's full $53 million claim from a 2013 fertilizer plant explosion that killed 15 people.
The lawsuit filed May 20 in Waco's 170th State District Court claims Argonaut Insurance Co., Trident Insurance Services and the Texas Association of Public Educators breached contracts and failed to meet Texas insurance code standards.
"Argonaut and Trident have failed to make an attempt to pay plaintiff's loss in a fair manner, although their liability to the plaintiff under the policy is without dispute," the suit claims.
No hearings have been set in the case yet, a court clerk said.
The school district reported at least $53 million in damages from the explosion that hit the town between Waco and Dallas on April 17, 2013.
District officials said Argonaut offered to pay the district $30 million to cover the losses. The district received $20.8 million from the Federal Emergency Management Agency.
With the insurance settlement in litigation, West is proceeding with construction efforts. The district will have a smaller high school and no longer need or use an intermediate school.
Even the maximum insurance benefit would ?only cover about half of the estimated $117.4 million long-term fix proposed to renovate or replace campuses and furnishings, officials said.
"We have exhausted all of our school district's efforts, and it's time to turn it over to experts and let them hash it out," West ISD Superintendent Marty Crawford told the Waco Tribune-Herald. "Frankly, we think we owe it to the taxpayers of West, McLennan County, Texas and the United States to exhaust all of our efforts in this proof of loss. Whatever doesn't come from this proof of loss, ultimately, you and I as taxpayers will have to help out."
The district, which carries about $12.1 million of general obligation debt and less than $1 million of limited tax debt, saw its credit downgraded to Baa1 from A1 by Moody's Investors Service on June 19, 2013. The outlook remains negative.
In addition to the challenges of rebuilding three of the district's four schools, "the downgrade reflects expected tax base loss, and possible enrollment decline for a district that was already experiencing negative growth trends," Moody's analyst Adebola Kushimo wrote.
The fertilizer plant was one of the largest employers in the town before it exploded, killing 15 people, injuring 160 and destroying or damaging more than 150 buildings. The cause of the blast has not been determined.
The plant carried only $1 million in liability insurance. Under Texas law, fertilizer plants are not required to carry any liability insurance. The plant was last inspected by the federal Occupation Safety and Health Administration in 1985 when it was fined $30 for improper storage of anhydrous ammonia.
