Spooky Nook Sports Champion Mill files lawsuit against insurer over building collapse

HAMILTON — Spooky Nook Sports Champion Mill filed a civil suit last week in Butler County against a co-defendant in a separate but related lawsuit filed by its general contractor.

The Hamilton indoor sports and events complex sued Atlantic Specialty Insurance Company, claiming the Minnesota-based insurer “failed” when determining to apply the “Faulty Work” exclusion of its policy for the $165 million complex on North B Street. They say they are owed more than the $250,000 ceiling specified in the policy, but Atlantic Specialty Insurance had maintained, according to the lawsuit filed in Butler County Common Pleas, its obligation is capped at that quarter of a million dollar limit.

This civil suit stems from an 11-count lawsuit general contractor PCS &Build filed against Spooky Nook in February, which also named others, including Atlantic Specialty Insurance, also known as Intact. Other litigants include Spooky Nook owner Sam Beiler, PCS subcontractor Sofco Erectors, Old Republic General Insurance Corp., and Old Republic Surety Co.

The general contractor claimed in the Feb. 10-filed lawsuit they’re owed millions of dollars in costs and damages.

That initial civil suit mostly surrounds the catastrophic collapse of what was called Building 500, a field dome that was to be a pre-engineered metal building. On March 26, 2021, strong winds blew through Hamilton, leveling all the steel beams erected. No one was injured in the collapse, but neighbors told the Journal-News it sounded like a bombing.

PCS said in its suit it sustained losses greater than the $250,000 amount. Friday’s suit filed by Spooky Nook appears to be an attempt to cover those losses.

Spooky Nook’s insurance policy with Atlantic Specialty does state it caps coverage at $250,000. However, there is a subsection titled “Faulty Work,” where Spooky Nook officials say they are exempt from the cap.

The $165 million Spooky Nook Sports Champion Mill development incorporates the former Champion Mill paper plant that shut down in 2012. While it’s not fully open, as PCS and its subcontractors have vacated the job site, all major phases of the mega-complex are operational. The Champion Mill Convention Center and Warehouse Hotel, known as Mill 2 on the east side of North B Street, came online in phases starting in mid-2022. The sports complex, known as Mill 1, started to come online in December, and has since hosted several events that have attracted tens of thousands of new visitors to Hamilton.

Since the opening of Mill 1, tens of thousands of visitors have visited Hamilton on the weekends.

The Journal-News had attempted to contact Spooky Nook and its attorneys but did not receive a response before the print deadline. The complaint was sent to Atlantic Specialty Insurance on Monday afternoon, according to court records.

Spooky Nook had posted statements in recent months related to the PCS lawsuit, stating the general contractor was “seeking to recover for its incomplete work,” and the collapse happened “while under PCS &Build’s supervision and control.”

The PCS lawsuit also claims Spooky Nook was in breach of contract and says the complex and Beiler owe more than $11.9 million in damages. PCS has placed an $11.9 million lien against Mill 1, and a $3.96 million lien against Mill 2, according to the Butler County Recorder’s Office.

Spooky Nook officials previously told the Journal-News that the projects “remain funded and prepared to pay all contractors as permitted by the contract and applicable law. Unfortunately, the PCS litigation will inevitably delay this process.” They also said the lawsuit will not impact any day-to-day operations.

In addition to PCS’s liens, 11 subcontractors have placed 16 liens against the Spooky Nook project, collectively claiming more than $6.4 million is owed, according to the county recorder’s office.

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