Arbitrator: Termite company Terminix owes $6 million to Alabama’s Waterville USA amusement park

An Alabama amusement park’s lawsuit against a major termite protection company could result in a $6 million penalty, if an arbitrator’s ruling stands as issued.

Court records show that the Waterville USA amusement park in Gulf Shores filed suit against Terminix in 2021. The park is a major attraction for vacationers visiting the Alabama coast, with attractions including water slides, a lazy river, a wave pool, a go-cart track, mini-golf, an arcade and more. It has a highly visible location near the foot of Alabama 59, the main route for beach-bound visitors.

Waterville’s complaint says that Terminix performed an initial treatment and provided a termite bond in 2005, with an annual fee of $1,000. But, the lawsuit alleges that from 2011 onward, the Terminix employees failed to perform annual inspections and treatments, failed to inform Waterville of the deficiencies and failed to live up to their obligations after live termites were found on-site in 2019.

Among other charges, the complaint alleges that Terminix representatives “engaged in conduct meant to defraud Plaintiff from the termite coverage that it pays for by having the Plaintiff release Defendants from the obligations it owed under the contract for services while attempting to do minimal repairs.”

The consequences, according to Waterville’s complaint, were dire. Inspection by another company found a widespread infestation so severe that “several buildings will be required to be declared a total loss and that they will need to be rebuilt.” Furthermore, it said, any structures being rebuilt would have to be brought up to current codes, which would require higher elevation for almost all of them.

According to the complaint, termite-damaged buildings include offices, a pavilion, utility rooms and the arcade. The damage claims do not relate to any of the amusement park or water park rides themselves.

A Waterville USA representative said participants in the suit were under a gag order and could not comment on the case. A representative of Terminix said the company would not comment because the matter involved active litigation.

In its initial response, Terminix expressly denied that it had misrepresented or concealed information and denied “that any alleged misconduct on its part was the proximate cause of any of the claimed injuries and damages.” Among the 40 points of defense it offered, the company said that it had “complied with all terms and provisions of the applicable contract” and that it was “not guilty of any intentional, reckless, extreme, outrageous, willful, wanton, or malicious conduct.”

The case has been heard by Baldwin County Circuit Judge J. Byron Brackin. Waterville had requested a jury trial and an initial trial date was set in March 2022. But the park later asked the court to compel binding arbitration. In November 2025, Waterville’s attorneys filed a notice of arbitration award and a motion asking the court to confirm it.

According to that notice, Arbitrator John R. Lockett, a retired Alabama judge, had awarded compensatory damages of a little more than $1.5 million and punitive damages of $4.5 million, for a total of just over $6 million.

Waterville’s motion for the court to confirm the award and enter judgment resulted in an ongoing legal back-and-forth over how quickly the court could confirm the award versus how much time Terminix is allowed to file a challenge. Among the various motions are suggestions that the company could file an appeal of the arbitration award in federal court, though there is nothing to indicate that Terminix has decided to do so.

It also remains possible that the parties could reach a definitive conclusion by agreeing to a settlement other than the amount specified by the arbitrator. Waterville withdrew its initial request for confirmation, and a hearing on outstanding motions has been set for Jan. 26 in Fairhope.

Waterville’s initial complaint alleged a “pattern and practice” of deceptive conduct and negligence by Terminix against “customers similar to Plaintiff.”

In November 2020 the state of Alabama announced a $60 million settlement with the company on behalf of more than 12,000 residents in Mobile, Baldwin and Monroe counties.