Restoration firm sues Opry Mills owners for $3.6 million.

Photo by LARRY McCORMACK / THE TENNESSEAN

by Bonna Johnson - The Tennessean

Interstate Restoration LLC is suing the owners of Opry Mills mall for $3.6 million, saying its company wasn't fully paid for water removal and cleaning work it did after May's flooding at the still-closed shopping center. 

The Texas-based restoration firm said it was not paid for labor, materials and services associated with water extraction and cleanup work at the mall through October, according to a complaint filed in Davidson County Chancery Court. 

The company is suing Simon Property Group, along with Opry Mills Mall Limited Partnership and a German bank that acts as its commercial lender, for breach of contract as well as intentional misrepresentation and conspiracy to commit fraud.

The legal complaint says the mall knew it was "under-insured for the property damage sustained because of the flood, and thereafter knew that an insufficient amount of insurance proceeds would be available to pay Interstate for the work" performed in a second phase of cleanup.

It also says the mall's owners knew they "were so severely under-capitalized that these entities did not have the ability to pay Interstate."

Simon Property Group issued a statement saying, "Simon Property Group looks forward to defending ourselves vigorously since we believe this lawsuit lacks merit. In particular, the spurious allegations of misrepresentation and fraud are unfounded and represent the worst kind of overreaching by plaintiffs and their attorneys."

The mall's owners are already tied up in a multimillion-dollar lawsuit involving their insurance coverage. That case isn't scheduled for trial until February 2012.

The owners are suing their insurers over a remaining $150 million in insurance proceeds that the mall says it needs to complete repairs. The insurers argue that the coverage is limited to $50 million already paid out.

Interstate's lawsuit said its work at the mall was divided into a first phase that included removing water, demolition and the drying of spaces, and a second phase that included other cleaning work. Simon Property approved the restoration firm's pricing and charges for Phase II on or about July 28, according to the Chancery Court complaint.