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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

Owners of Apartment Complexes File Second Suit Against An ACE Unit

July 7, 2011 - The owners of apartment properties in Mobile, Ala., have filed a second lawsuit against an ACE Group company over damages they contend have improperly been left unpaid.

Delaney Development Inc. and Delaney’s Inc. filed suit against Illinois Union Insurance Co. in U.S. District Court for the Southern District of Alabama. Their complaint pertained to damages caused to a Delaney’s owned apartment complex, Yester Oaks Apartments, which Illinois Union had insured against losses.

On June 11, 2005, a fire broke out at Yester Oaks. The blaze “caused widespread devastation to the plaintiff’s property,” said plaintiffs.

The suit does not specify the amount of loss caused by the fire, other than to say it necessitated massive repairs and also rendered the property uninhabitable for a time.

Plaintiffs said they notified Illinois Union in a timely fashion, and the insurer responded by sending adjustors to the apartments to survey the damage. But so far, Plaintiffs said, Illinois Union has not paid it a sufficient amount to adequately compensate it for their losses from the fire. This despite, in the words of the plaintiffs, Illinois Union having been provided with a satisfactory proof of loss.

Plaintiffs say that Illinois Union has breached its contract with plaintiffs and breached its duty to deal in good faith. The plaintiffs asked the court to order the insurer to fully compensate them for their losses.

The Yester Oaks lawsuit followed another lawsuit that Delaney’s filed last month against ACE Group unit Westchester Surplus Lines Insurance Co. In that action, Delaney’s likewise complained that Westchester and two other unrelated insurers had not adequately compensated it for damages done to a company-owned apartment complex that was struck Sept 16, 2004, by Hurricane Ivan.

Delaney’s similarly said in the hurricane incident that it notified its insurers in a timely fashion, took steps to mitigate its losses and was the victim of a breach of good faith by its insurers.

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