Two-year litigation over selling-price endorsement comes to close

After Phoenix-based custom furniture manufacturer Scottsdale Art Factory suffered sprinkler damage to its vast showroom inventory, its insurance carrier, American Fire and Casualty (AFC), of the Liberty Mutual family of companies, told Art Factory that the only recovery available was reimbursement for repair, which only Art Factory itself was qualified to do.

Later, when it came to light that Art Factory’s insurance policy contained a manufacturer’s-selling-price endorsement that provided for millions of dollars in reimbursement of the full retail value of the damaged pieces, AFC refused to honor it.

A two-year-long litigation ensued, led by SBE attorney Howard Shernoff, who shuttled between Los Angeles and Phoenix to battle AFC’s court efforts to beat the case. Several months before trial was scheduled to begin, the parties settled their differences at a confidential mediation.