Nearly six years after a fire destroyed Eagle Point Middle School, the school district and its insurance company have settled a lawsuit over how much the company should pay for the replacement of the building.

Nearly six years after a fire destroyed Eagle Point Middle School, the school district and its insurance company have settled a lawsuit over how much the company should pay for the replacement of the building.

Great American Insurance Company of New York agreed to pay $12 million to the Eagle Point School District, avoiding a July 8 jury trial.

The amount includes about $6 million the insurance group already paid the district to cover debris removal and the actual cash value of the World War II-era property, which was destroyed by fire on Aug. 29, 2002.

"We are absolutely glad to have this over, to have this over and the money to be able to plan for our future," said School Board Chairman Jonathan Bilden. "With the trial, there would have been legal fees and the possibility of appeals, so this is a good thing for both sides."

The School Board on Friday approved the agreement.

F.J. Maloney III, a Portland-based attorney representing Great American, praised the agreement.

"We are pleased it can be resolved to the benefit of all parties," he said.

The district filed the lawsuit two years ago after it and the insurance failed to agree on an amount.

During the course of the dispute, the company had offered the district $7.3 million toward replacing the middle school. The district turned the offer down, claiming it was insufficient to complete the job. The district had asked for as much as $22.6 million.

A replacement middle school was built at Reese Creek Road with bond funds in March 2004.

The district plans to use the settlement money for a new elementary school to replace the deteriorating Little Butte Elementary School in Eagle Point, where only two rooms remain suitable for use.

Reach reporter Paris Achen at 541-776-4459 or pachen@mailtribune.com.