Ruiz & Smart represented Naveen and Meena Parmar and their family business after their insurer failed to honor a commercial property policy following a devastating loss. What began as a dream of small-business ownership nearly collapsed when the insurance company refused to pay what it owed—despite clear coverage and overwhelming evidence of damage.
The Parmars purchased a formerly shuttered motel in Ferndale, Washington, using decades of savings and seller financing. After months of work, they finally began bringing rooms back online. Then disaster struck twice. In November 2021, a nearby river flooded the property, forcing the motel to close. While cleanup was underway, a severe winter freeze followed weeks later, causing widespread plumbing failures and water damage throughout the building. Water ran for days before the loss was discovered, compounding the destruction and undoing much of the prior mitigation work.
The freeze loss was insured under a commercial policy providing more than $5.8 million in building coverage. From the outset, however, the insurer delayed, deflected, and minimized the claim. Its own adjusters recognized the loss was extensive and that at least significant portions of the damage were undisputed and covered. Internal communications acknowledged that overlapping flood and freeze damage could not be reasonably segregated—meaning coverage should apply in full. Yet the insurer failed to communicate these findings to the Parmars and refused to meaningfully pay the claim.
As months passed with no resolution, the Parmars were left in limbo. Contractors went unpaid, liens were threatened, and the motel remained shuttered. The insurer ultimately attempted to force a “final” resolution for a fraction of even the undisputed repair costs—after litigation had already begun.
Ruiz & Smart brought claims for breach of contract, insurance bad faith, and statutory violations, developing a detailed factual record showing not just underpayment, but a systemic failure to investigate, evaluate, and fairly adjust a large commercial loss. The case exposed how the insurer ignored expert recommendations, withheld critical information from its insureds, and chose litigation over compliance with its policy obligations.
The case ultimately settled for $5.5 million. Although the insurance company insisted on a confidentiality provision, the trial judge later ruled that the settlement amount was not confidential, underscoring the public significance of the result.
For the Parmars, the resolution provided long-overdue accountability and a path forward after years of financial and emotional strain. For Ruiz & Smart, the case reflects the firm’s commitment to standing up to insurers who place profits over promises—especially when small business owners are at their most vulnerable.
Past results do not guarantee future outcomes.