Months after Legionnaires’ outbreak, hotel sues insurance companies

CORRECTIONThis story has been updated to reflect that Jeffrey Diamond represents The Arden Group, not Merritt Hospitality. 

Owners of the Sheraton Atlanta hotel are suing its primary insurance company, claiming it is required to pay out money on more than 50 claims filed against the hotel following a Legionnaires' outbreak that killed a guest and sickened others last year.

The lawsuit, filed in Fulton County Superior Court on Wednesday, comes six months after the downtown hotel closed when some guests tested positive for Legionnaires’ disease, a severe form of pneumonia contracted by breathing in mist or swallowing water containing bacteria.

“It’s a question of whether the policy covers these claims,” hotel attorney Jeffrey Diamond told The Atlanta Journal-Constitution. The Sheraton Atlanta is facing claims from as many as 60 people claiming bodily injury due to the Legionella bacteria, according to the lawsuit. One of the claims is by the estate of a person whose death was linked to the exposure.

Diamond represents Arepeii Sa Hotel, which owns the hotel, and real estate investment group The Arden Group, who is also suing because it purchased six polices on behalf of the hotel and its owners. Merritt Hospitality, which manages and operates the hotel, is also suing.

Fireman’s Fund Insurance Company is named in the lawsuit, which alleges the company is obligated to pay the claims as it states in the hotel’s primary policy. The policy requires the insurer to pay claims that result from bodily injury, which is defined as injury, sickness or disease and death, according to the lawsuit.


Efforts to reach Fireman’s Fund Insurance for comment were unsuccessful Thursday.

Also named in the lawsuit were Continental Insurance Company, Navigator’s Insurance Company, and Ohio Casualty Insurance Company because they sold The Arden Group additional insurance for the property.

On July 15, the Sheraton Atlanta shut down temporarily after six guests at the hotel tested positive for Legionnaires' disease. The Georgia Department of Public Health later confirmed there was Legionella bacteria in the hotel's cooling tower and in a decorative fountain in the atrium.

The public health department’s spokeswoman Nancy Nydam confirmed Thursday there were 14 confirmed cases and 67 probable cases of the disease connected to Sheraton Atlanta. Probable cases include people who had an illness consistent with Legionnaires’ disease, but without laboratory confirmation, Nydam said in an emailed statement.

The 760-room hotel reopened in mid-August after an inspection by the Fulton County Board of Health found it was clear of the bacteria.

— Staff writer Helena Oliviera contributed to this report.