Bedford chocolatiers whose Mount Kisco factory was destroyed in 2023 claim that despite asking their broker for full coverage the business was drastically under-insured.
Mast Brothers Inc. accused Garber Atlas Fries Associates of insurance malpractice, in a complaint filed on Jan. 15 in Westchester Supreme Court.
“Insurance proceeds available to cover a staggering commercial loss that crippled its business were only a pittance of what was required,” the complaint states, “and a fraction of what [Garber] had been instructed to obtain.”
Mast chocolate is marketed as an artisanal product made only with cacao beans and cane sugar, according to the lawsuit, in contrast to large producers that use milk, butter, vanilla and other additives.
Brothers Richard and Michael Mast began making chocolate in their Brooklyn apartment in 2007 and then selling it at farmers markets. By 2013, their chocolate was being sold at Whole Foods and Wegmans stores. In 2015 they opened a store in London and in 2016 they opened a factory and store in Los Angeles.
They shifted operations to Westchester in 2019, leasing a 9,000-square-foot space on South Morger Ave. at the edge of downtown Mount Kisco to use as a factory, store and café.
They renovated the space for about $1.6 million and added a new roaster, stone mills and other equipment.
Beginning in 2012, and as they continued to grow and expand, Mast claims, it made sure it was adequately insured. The initial insurer was Kessler Brokerage Group, which later merged with Garber Atlas Fries & Associates, of Oceanside, Nassau County.
The Mast brothers say they repeatedly made their broker aware of expansion plans and needs, and they were repeatedly assured that they were covered.
As they transitioned to Mount Kisco, the complaint states, Michael Mast asked for confirmation that the business would be insured for up to $6 million, and he provided details from the lease that required property insurance with full replacement value.
In 2023, a charity ordered a product that used a combustible ingredient, linseed oil. On the night of Oct. 3-4, 2023, according to the complaint, the oil ignited a fire that destroyed the Mount Kisco facility.
Losses were estimated at more than $3.2 million, the Mast brothers claim, but insurance paid $344,000.
“Simply put,” the complaint states, Garber Atlas Fries “failed to protect Mast Brothers Inc. as it had promised it would.”
Mast Brothers is demanding unspecified monetary damages for alleged breach of contract, breach of fiduciary duty, and negligence.
Mast is represented by White Plains attorney Christopher B. Gallagher, of Denlea & Carton LLP.
