XL Specialty files a subrogation complaint seeking more than $11,617,411.72 over an alleged linseed-oil fire at a National Cancer Institute lab, filed Sept. 5.
In a new federal complaint in the District of Maryland, XL Specialty Insurance Company names ISEC, Incorporated as the defendant in a bid to recover payments the insurer says it made after a lab fire in Fort Detrick, Maryland. At this stage, these are XL’s allegations.
Here’s the core claim: XL insured Grunley Construction Company, Inc., the contractor on a renovation of a National Cancer Institute laboratory that the complaint describes as an affiliate of the National Institutes of Health. XL says it is subrogated to Grunley’s rights based on property damage from the incident and that it paid $11,617,411.72 under its policy.
The project details matter here. The filing states that Leidos Biomedical Research, Inc. retained Grunley to manage the renovation at the NCI facility at 1407-1419 Sultan Street, Fort Detrick, in Frederick County, Maryland. Grunley, in turn, subcontracted with ISEC on July 27, 2020 to furnish labor, materials, and equipment for laboratory casework, fume hoods, and related equipment work.
XL’s allegations focus on how adhesives were removed from lab countertops. According to the complaint, ISEC used cotton rags soaked in linseed oil, placed those rags on the floor near construction debris, and did not disclose or obtain approval for using linseed oil from Grunley or Leidos. The filing also alleges that, upon information and belief, ISEC was the only subcontractor using linseed oil.
On or about May 6, 2023, XL alleges, linseed-oil residue spontaneously combusted, resulting in a “massive fire” in Room 201-G, described as an 8,000-square-foot laboratory. The complaint further alleges significant renovation delays followed.
Contract terms are front and center in the pleading. The quoted subcontract provisions require, among other things, the use of specified products unless an approved substitution is authorized, special warranties and guarantees for each component, compliance with contract documents, industry standards and applicable building codes, submission of daily reports, and an orderly work area with daily clean-up. XL alleges ISEC breached by failing to obtain approval for linseed-oil use, failing to comply with governing documents and standards, and failing to maintain an orderly work area and remove debris.
The complaint pleads four counts: breach of contract, breach of warranty, negligence, and gross negligence. Those counts track the same factual narrative surrounding the alleged use and disposal of linseed-oil-soaked rags and the resulting fire.
As relief, XL asks the court for a judgment “in excess of Eleven Million, Six Hundred and Seventeen Thousand, Four Hundred and Eleven Dollars and Seventy-Two Cents ($11,617,411.72),” plus pre- and post-judgment interest, costs, and reasonable attorney’s fees “as permitted by contract or statute,” along with other appropriate relief.
