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Two companies owned by Stan Kroenke have sued an insurance firm over the cleanup of arsenic-contaminated soil at the sprawling development the billionaire is building in Inglewood that’s anchored by a stadium for the Rams and Chargers.
TKG Management and Pincay Re LLC alleged in a lawsuit filed last week in U.S. District Court in Los Angeles that Chubb Custom Insurance Company refused to pay the bulk of a $5-million policy covering environmental cleanup costs.
The complaint accused Chubb of embarking “upon a campaign intended to delay, hinder, and impede recovery, the essence of bad faith.”
A spokesman for the insurance company and spokeswoman for the stadium development declined comment.
The dispute revolves around 60 acres along the northern border of the 298-acre development. Kroenke purchased the land in January 2014, the first public step in a process that led the Rams owner to relocate the franchise from St. Louis to L.A. and break ground on the $5-billion SoFi Stadium that’s scheduled to be completed this year.
In November 2015, the lawsuit said, the plaintiffs discovered arsenic levels in the soil that were “dozens of times higher” than found in the surrounding area in addition to unspecified levels of lead. The land, which included a hotel in the northwestern corner from 1974 to 1994, had been used as a paved parking lot for decades.
The rest of the development, once home to the Hollywood Park racetrack, has been under a soil management plan overseen by the L.A. Regional Water Quality Control Board since 2007 to address chemicals, including arsenic, found in the soil.
Between March 2015 and October 2015, for example, 83,000 tons of arsenic-contaminated soil from another part of the site were removed and trucked to landfills in Castaic and Yuma, Ariz.
Though Chubb agreed in October 2016 to reimburse “reasonable and necessary” costs to remediate the 60 acres, the lawsuit said, the company “failed and refused” to pay more than $430,000 of the $5-million policy.
The lawsuit alleged Chubb “refused to explain” the reasoning for not paying the full policy.
Cleaning up the 60 acres cost more than $17 million, according to the lawsuit, though it didn’t provide specifics. The plaintiffs seek a declaration that Chubb should reimburse them for up to $5 million of the cleanup cost plus interest, attorney’s fees and unspecified damages.
Most of the land will be be used for parking and road improvements.