Neighbors Sue Veranda House Owners For $4.6 Million Alleging Negligence, Lack Of Sprinklers

David Creed •

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The fallout from last year's devastating fire at the Veranda House continues as neighbors of the historic hotel who lost their home as a result of the blaze have filed a multi-million dollar lawsuit against the Veranda House's owners, staff, and insurance companies.

Kevin and Katherine Davidson, the owners of 4 Step Lane, filed the lawsuit last Wednesday in Nantucket Superior Court against nine different parties and are seeking more than $4.6 million in damages. After gutting the Veranda House, the fire quickly jumped across the street and ignited the Davidsons' residence, one of two other structures that suffered heavy damages.

According to the lawsuit, the Davidsons are seeking $2.6 million for documented property damages to date and another $2 million for “emotional distress.”

Among numerous allegations in the lawsuit, the Davidsons accuse The Procaccianti Group LLC (TPG) and 3 Step Lane LLC (3SL), the owners and operators of the hotel, of failing to install an automatic sprinkler system in that hotel that should have been required during a "complete renovation" in 2020. That created, according to the Davidsons, a “foreseeable fire hazard and casualty risk to the neighboring homes."

The Davidsons allege that the ownership groups chose not to install automatic sprinklers in violation of state fire safety laws and regulations by “wrongfully and deceptively under-reporting the true cost and scope of the renovations to the Town of Nantucket thus allowing defendant to avoid the expense of installing a fire sprinkler system in the hotel as would have been otherwise mandated by state law.”

The plaintiffs also allege that when TPG and SL3 completed the major renovations to the Veranda House, they far exceeded the original stated cost of the project, which was reporting to the Nantucket Building Department to be $87,560. The renovations were allegedly including the renovations of bathrooms and walls, along with the installation of new tile, floors, walls, paint, and other interior work.

“The actual project far exceeded the scope of the permit and its stated cost, and included inter alia (other renovations such as) substantial rough and finish plumbing work, rough and finish electrical work, framing and insulation work, and replacement of the entire roof,” the Davidsons allege in the suit. The state investigators described the work as “complete renovations.”

The day after the fire, former Nantucket Fire Chief Steve Murphy said, “There was no fire sprinkler system in the building and (it) was not required by code when constructed.” Murphy was also asked how many other historic inns on Nantucket remain without a modern fire suppression system and while Murphy couldn’t determine a specific number, he said there are “tons of them. All the old inns and hotels that haven’t undergone these major renovations are un-sprinkled."

In prior reporting by the Current it was noted that under state law (M.G.L. c. 148, s. 26G), sprinkler systems are required in buildings over 7,500 square feet that are undergoing renovations, but only if it is determined that the project includes “major” alterations or modifications.

That determination hinges on whether the renovation affects more than 33 percent of the total gross square footage of a building, and/or the total cost of the alterations or modifications (excluding the sprinkler system) is equal to or greater than 33 percent of the assessed value of the building.

While Nantucket Building Commissioner Paul Murphy told the Current last year the permit was properly issued, the Davidsons believe that isn’t the case. They added that vendors who worked on the project and neighbors in the area who personally witnessed the work described it as a “gut renovation.”

“Given the actual scope and cost of the major alterations, defendant was legally required to install automatic sprinklers for health and safety of the public, hotel guests, and abutters as a fire prevention measure required under state fire safety laws and regulations.”

The Davidsons are also accusing the company of failing to submit an engineer’s report that would have given an independent and detailed review of the actual size and scope of the project.

“By failing to obtain and submit an engineer’s report for the 2020 renovations, defendant was able to skirt the law and omit critical information from the town building inspector that would have alerted him to the true scope of the project as extending well beyond the stated cost in the permit application,” according to the suit.

The Davidsons also allege that TPG and 3SL recently made a multi-million dollar offer to purchase an adjacent property near the Veranda House as part of a planned expansion of the hotel. They said this supports their stance that the owners had enough financial resources to invest in an automatic sprinkler system costing an estimated $100,000-plus during the 2020 renovations.

Given that the Veranda House fire is believed to have started outside the structure, it remains unclear how much of an impact interior sprinkler could have played in slowing or stopping the blaze (although there are effective exterior fire suppression systems available).

One Nantucket firefighter told the Current last year “Not sure if that would have made the difference with the fire load. It moved so quickly that the system would not have had a chance. Balloon frame, massive wood porches and covered in wood shingles. That's why most of those grand old hotels are gone."

But the Davidsons believe the Veranda House owners putting “profits over public safety” and neglecting to install this system did in fact lead to the significant damages to their home and could have otherwise been prevented.

“Defendant’s deceptive and unfair efforts to avoid doing so reflect a knowing, unlawful, and unconscionable decision to put profits over public safety,” the Davidsons alleged. They added that a code compliant automatic sprinkler would have "prevented the fire from spreading to neighboring properties.”

Sompo International Insurance, Allied World Insurance Company, and American Zurich Insurance Co. are also defendants in the suit. The Davidsons are accusing them of bad faith settlement practices and “unfair and deceptive acts and practices” - forcing the Davidsons to incur substantial damages and costs from the fallout of the fire.

There are nine defendants in the case including the previously mentioned TPG, SL3, 3 Step Lane Hotel Manager LLC  and the insurance companies - as well as employees Dias Omirov, John Bottino, Larry Lecain. None of the defendants have filed a response to this latest lawsuit, but the Current will report their response when/if it becomes available.

The fire was determined by investigators to be accidental/unintentional with the most likely cause being the improper disposal of a cigarette by a Veranda House housekeeper, who the lawsuit identified as Dias Omirov. When Omirov was investigated, he eventually admitted to smoking and then disposing of a cigarette in the garbage area where the fire originated.

The Current reported on the state’s final report back in September of 2022 when it was released, and you can read that story here.

The State Fire Marshal’s office also stated in July of 2022 that no criminal charges were expected to be filed against Omirov because there was “no evidence to suggest criminal conduct” and said no charges have been sought.

The Davidsons are demanding a jury trial on all 15 counts mentioned in the suit.

This story will be updated.

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