American Christmas demands $2.3M for 2018 Christmas season fire

A 2018 Christmas season fire has sparked lawsuits over who is responsible for $2.3 million in damages. American Christmas, a Mount Vernon holiday decorations company, is asking federal court in White Plains to hold responsible Mt. Hawley Insurance Co. and American Empire Surplus Lines Insurance Co.

American Christmas, an affiliate of MK Illumination Inc., accuses the insurers of acting in bad faith in the Dec. 21 lawsuit.

In 2018, American Christmas hired AMA Signs & Electric Co. to install decorations at 330 Madison Ave., Manhattan. On Dec. 21 that year, a fire extensively damaged the property.

Four insurance companies paid the landlord, Vornado Realty Trust, for its losses.

Then Vornado”™s insurance companies went after American Christmas and AMA Signs this past June, in Westchester Supreme Court, demanding nearly $2.3 million for negligence in designing, installing, testing and securing the holiday decorations.

American Christmas and AMA Signs denied the charges and have filed counter-claims blaming one another.

American Christmas”™ primary insurer, Transportation Insurance Co., is defending the company up to the $1 million policy limit. But Mt. Hawley of Peoria, Illinois, has denied coverage under a $5 million excess liability policy.

American Christmas had also required AMA Signs, the subcontractor, to get liability insurance and to name American Christmas as an additional insured party. AMA Signs got a $1 million policy from American Empire of Cincinnati, Ohio.

American Empire, according to the complaint, also denied coverage for American Christmas.

The dispute centers on interlocking obligations triggered by certain conditions.

American Empire, according to the lawsuit, claims it does not have to cover American Christmas because AMA Signs did not cause the fire. And Mt. Hawley purportedly claims it does not have to provide coverage because American Empire is not backing American Christmas.

Both insurance companies have a duty under the policies, American Christmas argues, to defend the decorations company.

The Mount Vernon company is asking the court to interpret the insurance policies and order the insurers to cover the costs of the Vornado lawsuit.

Hackensack, New Jersey attorney Michael J. Forino represents American Christmas.