City, county insurer denies coverage for potential airport lawsuit damages

City, county insurer denies coverage for potential airport lawsuit damages »Play Video
YAKIMA -- Yakima and Yakima County could be on the hook for millions of dollars without a safety net. Both governments are being sued for wrongfully evicting a tenant from the Yakima Air Terminal. Now, their insurance company says it won't cover any of the damages. KIMA asked the tough questions to see how much this could hurt.

The sign still hangs at Noland Decoto. But, the air services company is no more.

It went out of business after being evicted from the Yakima Air Terminal for not paying rent. But, the state's Court of Appeals ruled that was a mistake.

Now, the trustee for Noland Decoto's parent company, M.A. West Rockies, and one of its creditors are suing for roughly $10 million.

KIMA filed a public records request to find out if insurance will cover it.
These letters to the city and county say "no", because the decision was intentional, not an accident.

KIMA asked Yakima County Commissioner, Rand Elliott, "To the extent that the county isn't able to squeeze any money out of the insurance company, any coverage, where would the money to pay for these damages come from?"

"I think as in any case, it would have to come from the general fund," said Elliott.

In other words, your taxpayer money. Yakima has only $800,000 in its risk management fund.

"We have, purposefully, an $11 million operating reserve for emergencies and these kinds of contingencies, whether they be man-made or natural disasters," said Yakima City Manager, Tony O'Rourke.

Both the city and county hired lawyers that specialize in coverage matters to fight the insurance company's decision.

Despite the decisions from the appeals court and insurance company, Elliott maintains the eviction was the right move.

"I still believe that there was a breach of contract there and that it was appropriate to try and remove him."

But O'Rourke is not so sure.

KIMA asked, "Do you think it was a bad decision?"

"I mean looking at the facts, probably," said O'Rourke. "But, that's water under the bridge."

M.A. West owner Brad Goodspeed isn't over it.

In an e-mail to KIMA, he says while the city and county work to limit the impact to taxpayers, "it does nothing to restore Noland Decoto to a functioning business. The fence has been built and the results of that are permanent and non-reversible."

Yakima's insurance attorneys wrote a letter to Yakima's private insurance company on Tuesday. They maintain declining the coverage goes against their policy. Yakima's city attorney would not speculate whether this will wind up in court.