Owner of Assisted Living Home Where 10 Died in Fire Denied Access to Insurance

By Andrew G. Simpson

The owner of the Massachusetts assisted living facility Gabriel House where 10 people were killed and 30 injured in a fire last July has been denied access to insurance proceeds that he told a court are needed to repair the facility and pay employees and taxes.

Judge Joseph Ditkoff of the Massachusetts Appeals Court rejected a bid by Dennis Etzkorn, a member of the real estate trust and owner of the assisted living services firm Gabriel Care that operated the facility, to access the funds due under a $6 million property policy issued by Liberty Mutual Insurance Co. The New Bedford assisted living business has no liability insurance.

Etzkorn, along with other parties, faces multiple wrongful death and other lawsuits stemming from the fatal fire. The hold on insurance proceeds was requested by a man whose mother died in the fire.

The appeals court upheld the insurance attachment and also approved an attachment on the real estate itself that blocks the owners from selling or transferring the property.

Massachusetts law says an attachment can be imposed where there is a “reasonable likelihood” that the plaintiffs will recover a judgment equal to or greater than the attachment over and above any liability insurance available to satisfy the judgment.

The Appeals Court judge agreed with the Superior Court that the plaintiff is likely to recover more than the insurance proceeds at issue, and that there is no applicable liability insurance at all and the defendants raised no challenge to either finding.

The owners received about $550,000 in insurance payments since the fire and before the attachment that they said they used to pay taxes, mortgage and salaries. They argued that not having the remaining insurance funds from the $6 million policy would mean the business would likely fail and the building deteriorate and lose value.

One unusual turn in the case has been the discovery that Gabriel House has no liability insurance for the business. Massachusetts, like most states, does not require assisted living facilities to have liability coverage.

Another defendant in the victims’ lawsuits, Fire Systems Inc. (FSI), has denied any liability and countered that the owners breached their contract with FSI by not having liability insurance.