King County’s lawsuit against an insurance company it claims wrongly rejected a claim to cover the cost of replacing a damaged underground conveyance pipe in Smith Cove Park is set to go to trial in April 2020.

Pittsburgh-based Ace American Insurance Company denies the county’s claim that its contractor for the South Magnolia Combined Sewer Overflow Control Project still had an active builder’s risk policy when the pipe was broken and needed replacing, which caused the county to incur more than $20 million in added costs.

King County’s South Magnolia Combined Sewer Overflow Control Project began construction in 2014, and involved running a 3,000-foot-long underground conveyance pipe from a diversion structure on 32nd Avenue West to the Magnolia Wet Weather Storage Facility just east of Smith Cove Park. The goal was keeping untreated wastewater out of Elliott Bay during stormwater surges.

Contractor Walsh Construction Company had a builder’s risk policy with Ace American Insurance Company, which accepted a claim for the remediation of a pipe head when it was pulled off in December 2014.

The policy expired on Nov. 20, 2015, and in September 2016 King County engineers discovered the upper diversion station filled with wastewater that had not flowed down via gravity to the 1.5 million gallon storage tank near Smith Cove Park. Walsh notified Ace of the loss that November, but the insurance company denied coverage because the policy had expired.

King County determined the pipe had been fractured at the time the head was pulled off back in December 2014, when the risk policy was still active. Walsh provided Ace with the results of the investigation last March, asking the insurance company to reconsider its previous denial of the insurance claim.

The county claims neither it nor Walsh was successful in soliciting a response from Ace American Insurance Company over several months, resulting in King County sending Ace notice on Dec. 6 that it would pursue a lawsuit.

Walsh replaced the damaged pipe by inserting a new pipe inside it last spring.

King County Waste Water Treatment Division deputy director Bruce Kessler told the Magnolia Community Council in mid-January that the Magnolia Wet Weather Storage Facility was back online.

King County filed its lawsuit against Ace in U.S. District Court on Dec. 31, seeking reimbursement of the cost of the repairs, Consumer Protection Act damages and attorneys’ fees. The county is also seeking an award of treble damages, which would triple the amount Ace pays if a judge agrees.

Ace filed its answer to the complaint on Feb. 20, denying King County’s assessment that the damage to the pipeline occurred prior to the policy’s expiration and that it has a contractual duty to reimburse the county.

U.S. District Judge Ricardo Martinez set a two-week trial period to start on April 6, 2020, and the deadline to amend pleadings is this April 1. If a settlement is not reached, case discovery must be completed by Dec. 9.