CASPER, Wyo. — The phone line worked at the Hitching Post Inn on Sept. 10, 2010.
Likewise, the batteries were fresh in the fire alarm control panel.
Three days later, the sprinkler system was tested and found functional at the legendary hotel at 1700 W. Lincolnway in Cheyenne.
On Sept. 10, 2010, the batteries and phone line were disconnected, and the sprinkler system had been disabled immediately before or at the beginning of the gasoline-fueled arson that caused nearly $14 million in damages, according to a special investigator for the Fireman’s Fund Insurance Company, which owns the National Surety Corp.
National Surety, through its attorneys Scott Klosterman and Pat Murphy of Casper, filed a lawsuit in Wyoming federal court on Jan. 5 against Hitch owner CJM Hospitality LLC of New Jersey.
People are also reading…
Pattern of fraud
The insurance company claims CJM conspired in a pattern of fraud, misrepresentation about finances, and racketeering leading to the fire. As a result, CJM has no right to claim anything for the damages, according to the complaint.
That lawsuit came a month after CJM sued National Surety in New Jersey federal court for failing to make good on its insurance policy.
CJM wants the case heard in New Jersey, and National Surety wants it heard in Wyoming.
New Jersey U.S. District Court Judge Freda L. Wolfson is scheduled to consider the location March 5.
Meanwhile, National Surety Corp. filed an affidavit on Feb. 3 by its investigator Richard L. McBrien, who interviewed witnesses; investigated the history of the hotel, its business dealings since 2006 including multiple code violations leading to its condemnation by the city of Cheyenne and the insurance company’s relationship with CJM; and the circumstances surrounding the fire itself.
Among his findings, McBrien wrote “an individual(s) with the knowledge of the [fire alarm] system, including its location, had taken measures to ensure this alarm system was inoperative;” the fire started from 13 separate points of origin; both sprinkler systems had been turned off; and the hotel was secure except for a door to the ballroom supply area and a roof access door that were not forced open.
Klosterman and Murphy also submitted 2011 correspondence from the Denver law firm Treece Alfrey Musat & Bosworth, which represents the coverage for Fireman’s Fund.
Last year’s requests
The 2011 correspondence begins in January with requests for depositions of people affiliated with CJM Hospitality, financial and phone records, with hints of frustration over delays and canceled meetings.
By late October, frustration gave way to anger as Treece Alfrey Musat & Bosworth attorneys scored CJM for “ongoing unwillingness to cooperate” with the investigation, and reminders that failure to provide information would invalidate the Hitch’s owners’ claims for damages.
For its part, CJM has asserted it has cooperated with National Surety and insisted the case should be heard in New Jersey.
The insurance company has exaggerated the reasons for moving the case from New Jersey, according to CJM, which says none of the Hitch’s owners and operators live in Wyoming.
Information in McBrien’s report about the fire alarm and sprinkler system isn’t relevant because CJM acknowledges the fire was caused by arson, and citing 48 witnesses in Wyoming is overkill, according to CJM. “Indeed, the number of Wyoming witnesses identified by Mr. McBrien is so large as to have no meaning.”
National Surety has argued the proper location for a trial isn’t about who has what contacts in a federal judicial district. “Instead it is the judicial district where a substantial part of the events or omissions giving rise to the claim occurred. Here, that judicial district is the District of Wyoming.”
On the other hand, CJM Hospitality said the insurance company does business in New Jersey, which makes it a resident in that state and subject to legal action there.
New Jersey also has a strong interest in vindicating its residents, especially with the allegation of violations of the Racketeer Influenced and Corrupt Organizations Act related to the purchase and eventual burning of the Hitching Post, according to CJM.
“Finally, although the Hitching Post Inn is located in Wyoming, National Surety has not demonstrated that there is any physical evidence at the site that somehow makes it important for this case to proceed in Wyoming. The fire occurred nearly seventeen months ago and physical evidence has been removed and/or is not in documents.”