A fire that destroyed a St. Joseph building a year ago has sparked a claim of fraudulent misrepresentation against Foutch Brothers LLC, the developer turning Kemper Arena into a $39 million amateur sports complex.
The lawsuit filed Monday in U.S. District Court in Kansas City said Foutch Brothers and others sought nearly $13 million in damages from the October 2016 blaze.
Foutch Brothers claimed damages based on the building’s serving as a seed manufacturing facility, said the lawsuit filed by Philadelphia Indemnity Insurance Co. But the developer had purchased insurance on the building as a warehouse worth only $150,000, the lawsuit said.
Philadelphia Indemnity claimed that Foutch Brothers and other entities named in the lawsuit “intentionally concealed and misrepresented material facts and circumstances in applying for the policy, and in presenting their claim.”
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Steve Foutch, a principal of Foutch Brothers, said Tuesday that he could not comment on the lawsuit.
In an email Wednesday, Foutch said Philadelphia Indemnity’s “conduct and claims are inappropriate” and denied the allegations in the lawsuit. Foutch’s email also said Foutch Brothers would assert “counterclaims” in the future.
The lawsuit claimed fraudulent misrepresentation in that Foutch Brothers and others knew that the representations were false when they were made.
A news account of the fire also described the building as a manufacturing facility.
Philadelphia Indemnity claims it has been damaged by having made payments under the policy totaling $564,205.40, which it seeks to recover.
It has asked the court to void the insurance policy and declare that Foutch Brothers is entitled to no coverage under the policy. The insurance company said it would be required to refund premiums of $265,799.
Others named in the suit are KCI Real Estate Partners LLC, Seren Properties Inc. and FBPM LLC.
Kansas City had agreed early this year to sell Kemper Arena to Foutch Brothers for $1. The sale allowed Foutch Brothers to pursue historic tax credits and other financing for the project.
A groundbreaking on the future Mosaic Arena was held last month.
This article was updated to include comments from Steve Foutch after its original publication.