EJ Victor lays off 121 employees amid legal fight over hurricane insurance claims

Hurricane Helene’s devastating impact has forced Morganton-based furniture maker EJ Victor to permanently lay off 121 employees as the company battles its insurer over denied claims exceeding $75,000 in damages.

The Morganton facility has not been operational since the storm. The company continued to pay its employees, but that ended Friday, Nov. 22. Many of those laid off have worked for the furniture company for decades. The company’s presence at the High Point Market in late October points to the hope of making furniture again.

“Unfortunately, the position of the insurance company has left us with no alternative but to lay off many valued and skilled employees who have worked with EJ Victor for many years,” the company statement said. “We are deeply grateful to our employees who have worked tirelessly to assess and minimize the damage. We request everyone’s thoughts and prayers as we work through this disaster.”

The Paper reached out to company officials, including CEO Richard Oliver, but they declined to comment further, citing the ongoing $75,000-plus lawsuit with Fireman’s Fund Insurance Company (FFIC).

Filed on Nov. 7, the lawsuit against FFIC calls for a jury trial to settle the company’s claims of breach of contract, declaratory judgment, and bad faith in denying coverage. The lawsuit was filed by Charlotte-based attorney Cory Hohnhaum of King & Spalding LLP.

Essentially, they believe their policy should cover their losses from the hurricane. However, FFIC has denied part of their claim by saying the damage was caused by flooding which they argue is not covered by the policy.

EJ Victor disagrees. The damages are covered because they resulted from hurricane conditions. The company’s policy has no warning regarding denial of coverage with floods or other natural disasters, a stipulation required by state law.

“This action arises from FFIC’s wrongful refusal to honor the promises in its insurance policy,” detailed in the lawsuit, “and pay EJV for a substantial portion of its losses arising from Hurricane Helene, which overwhelmed EJV’s furniture manufacturing facility located at 110 Wamsutta Mill Road, Morganton, North Carolina and destroyed much of the building, inventory, furnishings, and fixtures.”

Based on the language within their policy and guidance from their attorneys, company officials believe the damages are clearly covered. A list of those damages was sent to FFIC on Oct. 30 but was denied days later on Nov. 5 by saying they “cannot fund coverage for the flood damage portion of the claim.”

“The damage caused by Helene brought all of our manufacturing operations to a halt, damaged our equipment and inventory, rendering some equipment beyond repair and much of our inventory a total loss,” the company said.

The lawsuit illustrates the significance of the storm by including news reports of winds, floods, and “hundreds of thousands” left without power for weeks.

“In addition to the crippling losses to EJV’s Property, FFIC’s delay and denial has left EJV in a position in which it is unable to recommence business operations without a commitment of insurance funds to rebuild or relocate, which should never happen to a business that purchased insurance to cover exactly these circumstances.”

The company hopes to recover in excess of $75,000 in damages, including accruing pre/post-judgment interest, attorney fees, and expenses associated with pursuing the claims.

Before the layoff, Oliver announced on Oct. 10 the creation of an EJ Victor Employee Recovery account for donations to address their employees’ specific needs. For support after the layoff, employees can apply for the Extended N.C. Unemployment Benefits, announced by Gov. Roy Cooper.

About the company: EJ Victor has served as a high-end furniture manufacturer in Morganton since 1990. The company is at 110 Wamsutta Mill Road, with a showroom in High Point.