DT retained new experts who determined the actual causes of both fires.
The Los Angeles Export Terminal (LAXT) was a coal and petroleum coke export facility that used a massive ship-loader conveyor to load coal and coke from the dock on to vessels.
LAXT contracted with ThyssenkruppRobbins, Inc. (TKR) to design and supply the shiploader. The underlying contract said TKR would perform the work “in a manner consistent with the highest standards of care, diligence, and skill in accordance with customarily accepted good and sound professional practices and procedures.”
A fire erupted on the shiploader. Experts retained by DT determined the fire was caused by the spontaneous ignition of accumulated coal and coke which had gathered as a result of a plugged chute (a consequence of a design defect in the shiploader). The fire caused more than $3M in property damage and demurrage fees.
About six months later, another fire erupted on the shiploader. The experts retained by DT determined coke and coal built up around idler frames supporting the shiploader’s conveyer belt (again due to a design defect). The accumulated material ignited, and the fire ensued. This fire caused nearly $2M in property damage
The fire investigator originally retained by LAXT’s property insurer concluded the cause of the first fire was undetermined; he could reach no conclusions as to the second fire. As such, the property insurer closed its subrogation file.
However, an internal company audit suggested this decision might not be correct, so the file was later re-opened and sent to a large insurance litigation firm. That firm subsequently brought suit in Los Angeles (California) Superior Court, but not against TKR. Rather, it sued a stevedoring company responsible for loading coal at the facility, as well as a company that maintained the shiploader.
The property insurer eventually realized its counsel may not be pursuing the proper parties, so DT was brought in to take over the case (now a few years after the loss).