Springdale Warehouse Owner Wins $14M Judgment Against Tenant Over Tornado Damage

979 E. Robinson Ave. in Springdale was destroyed in a tornado in 2022. [Google Maps]

A federal judge recently awarded the owner of a 200,000-SF Springdale warehouse a $14.69 million judgment against a tenant that didn’t carry enough insurance on the building that was destroyed by a 2022 tornado.

Fort Worth Partners LLC of Springdale sued Nilfisk Inc. of North Plymouth, Minnesota, and Nilfisk Holding A/S of Denmark in 2022 for breach of contract, seeking $30.4 million in replacement costs not covered by Nilfisk’s insurance and another $1.6 million in rent.

Nilfisk is a manufacturer of professional cleaning equipment. The company used the plant to assemble, run quality assurance tests, package products and store inventory for distribution, according to documents filed in U.S. District Court in Fayetteville.

The steel-framed building was in the path of the March 30, 2022, tornado that packed wind speeds of 135-145 miles per hour, U.S. District Judge Timothy Brooks’ order said. The wind and wind-born debris “severely damaged” the building, Brooks wrote.

Nilfisk’s insurance company paid the building limits of the policy, $5.1 million, but Fort Worth Partners said that replacing the building would cost more than $30 million.

Fort Worth Partners said in its complaint filed in September 2022 that Nilfisk failed to honor its obligation to insure for the full replacement cost. “This was and is a material breach of the Lease and guaranty,” the complaint said.

Before the case made it to trial, Brooks ruled in favor of Fort Worth Partner’s motion for summary judgment because Nilfisk breached the lease agreement by failing to carry enough casualty insurance on the property.

Brooks then held a bench trial in February 2024 to determine damages. A major issue was determining the building’s full replacement cost, Brooks’ order said. The replacement cost means the cost of replacing the premises without deduction for depreciation or wear and tear, minus the cost of footings, foundations and other structures below grade, according to the lease agreement.

Both sides disputed the meaning of the phrase “less the cost of footings, foundations and other structures below grade,” Brooks wrote. He ruled the contracting parties intended for the phrase to mean that the full replacement cost value excludes “the cost of all foundations and footings, whether above or below grade, and any other structures that are below grade.”

Brooks said he couldn’t award damages for the cost of removing and replacing the foundation.

Brooks ruled that Fort Worth Partners was owed $12.87 million above that covered by Nilfisk’s insurance, another $1.6 million in unpaid rent and $54,544 in other damages.

Both sides are appealing to the U.S. Court of Appeals for the 8th Circuit. Fort Worth Partners claims the judgment is too low; Nilfisk says it’s too high.

Fort Worth Partners also received $114,086 for attorneys fees. It was represented by Marshall Ney of the Rogers office of Friday Eldredge & Clark LLP. It received another $5,149 in costs, but was denied $1.2 million in prejudgment interest.

Attorneys at the Rogers office of Mitchell Williams Selig Gates Woodyard PLLC represented Nilfisk.