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Brasfield & Gorrie, LLC v. Ace American Insurance Company

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Case Number: 
3:15-cv-00622 Search Pacer
ACE Group party(s): 
Opposing Party: 
Brasfield & Gorrie, LLC
Court Type: 
Federal
US District Court: 
Middle District of Louisiana
Date Filed: 
Sep 16 2015

COMPLAINT AND REQUEST FOR TRIAL BY JURY

Now into Court, through undersigned counsel, comes plaintiff Brasfield & Gorrie, L.L.C.
to file this Complaint against defendant Ace American Insurance Company and in support thereof
shows the Court the Following:

PARTIES

  1. Plaintiff Brasfield & Gorrie, L.L.C. is a limited liability company organized and
    existing under the laws of the State of Delaware with its principal place of business in Birmingham,
    Alabama. No member of Brasfield & Gorrie is a citizen of the Commonwealth of Pennsylvania.
  2. Defendant ACE American Insurance Company is an insurance company
    incorporated under the laws of the Commonwealth of Pennsylvania with its principal place of
    business in Philadelphia, Pennsylvania.

JURISDICTION AND VENUE

  1. This Court has jurisdiction over this lawsuit under 28 U.S.C. § 1332(a)(1) because
    plaintiff and defendant are citizens of different states and the amount in controversy exceeds
    $75,000.00, excluding interest and costs.
  2. Venue is proper in this District because ACE issued a policy of insurance,
    specifically a Completed Value Project Builder’s Risk Policy, policy number 1210558828 001,

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insuring Brasfield & Gorrie, L.L.C. and/or a construction project undertaken by Brasfield &
Gorrie, L.L.C., within this District and hence, as shown below, a substantial part of the events or
omissions giving rise to the claims asserted in this Complaint occurred within this District and/or
a substantial part of the property made the subject of this action is or was situated within this
District. 28 U.S.C. § 1391(b)(2).

FACTS

  1. Brasfield & Gorrie, L.L.C. undertook a construction project in this District,
    specifically involving the expansion of the South Wastewater Treatment Plant located on or about
    Gardere Lane, Baton Rouge, Louisiana 70820.
  2. To protect itself and others from damages and/or losses arising from or connected
    to the South Wastewater Treatment Plant construction project, Brasfield & Gorrie, L.L.C. obtained
    from ACE a certain policy of insurance, entitled Completed Value Project Builder’s Risk Policy,
    policy number 1210558828 001, with Brasfield & Gorrie, L.L.C., as the named insured. A copy
    of the insurance policy is attached as exhibit “A.”
  3. Brasfield & Gorrie, L.L.C. purchased certain materials for use in the ongoing
    construction and stored them onsite and those materials were insured under ACE’s policy of
    insurance.
  4. In February 2014, Brasfield & Gorrie, L.L.C. employees went to find certain items
    to use in the ongoing wastewater treatment plant construction. Upon doing so, the employees
    found certain of items were gone (e.gcustom fabricated stainless steel pipe fittings and
    miscellaneous items) and noted the indicia of theft.
  5. Promptly upon discovering the theft, Brasfield & Gorrie, L.L.C., reported the theft
    to the East Baton Rouge Sheriffs Office. The Sheriffs Office investigated the theft and prepared

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an Incident Report, number 14-00008908, and a property supplemental report. The report lists
“theft,” an offense under LSA—R.S. 14:67, as the explanation for the loss. Copies of the Sheriffs
reports are attached as exhibit “B.” ACE had a copy of these reports before it declined coverage
for Brasfield & Gorrie, L.L.C.’s theft loss.

  1. To date, the East Baton Rouge Sheriff s Office has not located the perpetrator(s) of
    this crime, nor has Brasfield & Gorrie, L.L.C., recovered the stolen property or been paid by ACE
    for the losses it incurred as a result of this theft of its insured and covered property.
  2. Brasfield & Gorrie, L.L.C. promptly reported this theft to ACE and asserted this

loss fell within the policy of insurance and asked ACE to abide by its policy’s provisions and to

pay Brasfield & Gorrie, L.L.C. the value of the stolen property. Specifically, Part A of ACE’s

Insuring Agreement provides coverage as follows:

This policy, subject to the terms, conditions and exclusions stated
herein, or endorsed hereto, insures against all risk of direct physical
loss or damage to property of every kind and description intended to
become a permanent part of or consumed in, the fabrication,
assembly, installation, erection or alternation of the Insured Project
as defined in the Declaration Page for which values have been
declared and deposit premium paid.

This provision covers the stolen property which Brasfield & Gorrie, L.L.C. promptly
reported to ACE.

  1. Pursuant to ACE’s policy provisions, these stolen items are insured and Brasfield
    & Gorrie is entitled to be paid for their loss, unless ACE establishes a policy exclusion applies.
  2. Upon receipt of Brasfield & Gorrie, L.L.C.’s claim, ACE conducted a perfunctory
    investigation and thereafter belatedly issued a letter declining coverage. See February 5, 2015,
    letter from ACE to Brasfield & Gorrie, L.L.C, exhibit “C.” In declining coverage, ACE cited and
    relied upon Part D, Exclusions, exclusion 5 which reads, in pertinent part:

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This policy does not insure loss or damage caused directly or
indirectly by any of the following, and such loss or damage is
excluded regardless of any other cause or event that contributes
concurrently or in sequence to the loss:

* * *

5. Unexplained disappearance, shortage or other loss
discovered upon taking inventory.

  1. ACE’s position that there is no coverage for the theft of Brasfield & Gorrie,
    L.L.C.’s property, otherwise insured, is untenable under the terms of the policy, the facts, and the
    law.
  2. This is not an “unexplained disappearance,” as ACE contends. Rather, when
    Brasfield & Gorrie, L.L.C.’s employees went to retrieve specific items, they clearly had been
    stolen. For one example, a stored skimmer had been strapped down on a pallet with metal bands.
    Where the skimmer had been, only the pallet with cut metal bands remained. This evidence shows
    a theft occurred, confirmed by the Sheriff’s reports - the only independent evidence available to
    both ACE and to Brasfield & Gorrie, L.L.C.
  3. There is a distinction between an “unexplained disappearance” and an “unsolved
    theft.” Merely because the crime’s perpetrators were not found or arrested in this case does not
    equal an “unexplained disappearance.” Taking ACE’s position to its logical conclusion there
    would be never be coverage for an unwitnessed theft loss when the culprit is not apprehended, a
    result the policy of insurance did not set forth nor a result either ACE or Brasfield & Gorrie, L.L.C.,
    anticipated or intended.
  4. Brasfield & Gorrie did not discover the theft “upon taking inventory.” Instead,
    Brasfield & Gorrie, L.L.C., realized a theft occurred when its employees specifically went to
    retrieve items to be installed and incorporated into the project. In this regard, ACE’s policy does
    not define the term “inventory” or the phrase “taking inventory” in Part G, Definitions under the

class=Section4>

policy. Under Louisiana law interpreting contracts, including insurance contracts, words are given

their generally prevailing meaning. See, e.g., LSA—C.C. art. 2047. The full definition of

“Inventory” found at The Merriam Webster Dictionary is as follows:

1: a: an itemized list of current assets: as (1): a catalog of the
property of an individual or estate (2): a list of goods on hand

b: a survey of natural resources

c: a list of traits, preferences, attitudes, interests, or abilities used to
evaluate personal characteristics or skills

2: survey, summary

3: the quantity of goods or materials on hand: stock
4: the act or process of taking an inventory
Brasfield & Gorrie, L.L.C. was not taking inventory when it discovered some person or persons
unknown had stolen the property from the insured site and ACE’s contention otherwise is
untenable under its policy of insurance language, the specific facts, and the law.

  1. Brasfield & Gorrie, L.L.C.’s theft loss is a clearly covered loss under ACE’s policy,
    and ACE has acted arbitrarily in refusing to honor Brasfield & Gorrie, L.L.C.’s claim.
  2. In response to ACE’s position, Brasfield & Gorrie, L.L.C. sent another letter to
    ACE, outlining the factual and/or legal errors in ACE’s analysis, but ACE refused to reconsider
    its declination of coverage for this theft claim.
  3. Although ACE suggested “all avenues of discussion” or “dispute resolution” to
    resolve the parties’ differences, when Brasfield & Gorrie, L.L.C. offered to mediate this dispute
    with another dispute it has with ACE over the very same insured construction project, its
    suggestion to mediate this claim was rebuffed.
  4. ACE has wrongfully denied Brasfield & Gorrie’s claim under the ACE policy and
    its denial constitutes a breach of contract as shown below.

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COUNT I - BREACH OF CONTRACT

  1. Brasfield & Gorrie adopts and re-alleges all averments of Paragraphs 1 - 21 of the
    Complaint as if set forth in full herein.
  2. The ACE Policy is a valid and binding contract.
  3. Brasfield & Gorrie has fully performed its obligations under the Policy.
  4. ACE has breached the terms of the ACE policy by failing to pay the claims that
    Brasfield & Gorrie submitted under the ACE Policy. Brasfield & Gorrie has been damaged by
    ACE’s breach and is entitled to and requests payment of the full amount to which it is entitled to
    recover under the ACE Policy, plus interest and costs.

COUNT II - BREACH OF FIDUCIARY DUTY

  1. Brasfield & Gorrie, L.L.C., adopts and re-alleges all averments of Paragraphs 1 -
    25 of the Complaint as if set forth in full herein.
  2. At all times, ACE was a fiduciary for Brasfield & Gorrie, L.L.C. ACE purported
    to provide insurance on behalf of Brasfield & Gorrie, L.L.C. (and its subcontractors). ACE owed
    a fiduciary duty to Brasfield & Gorrie, L.L.C., to provide insurance, to protect the interests of
    Brasfield & Gorrie, L.L.C., and to pay on claims submitted by Brasfield & Gorrie, L.L.C.
  3. The fiduciary duty or confidential relationship arose because Brasfield & Gorrie,
    L.L.C., placed special trust and confidence in ACE to provide insurance for the purpose
    contemplated and the premium paid by Brasfield & Gorrie, L.L.C.
  4. ACE had a duty to act in the best interests of Brasfield & Gorrie, L.L.C., or, at least,
    not to act in a manner directly adverse to the interests of Brasfield & Gorrie, L.L.C., and/or to
    place ACE’s interests ahead of those of Bradfield & Gorrie, L.L.C.
  1. ACE had a duty to act at all times with due regard to the best interests of Brasfield
    & Gorrie, L.L.C.
  2. ACE had a duty to act with the utmost loyalty and good faith concerning payments
    of claims submitted by Brasfield & Gorrie, L.L.C.
  3. ACE breached its fiduciary duties to Brasfield & Gorrie and caused Brasfield &
    Gorrie to suffer damages. In breaching its contractual duties (and the duties imposed upon it by
    law), ACE consciously and/or deliberately engaged in oppression, wantonness, or malice with
    regard to Brasfield & Gorrie, L.L.C.
  4. Brasfield & Gorrie has been damaged by ACE’s breach of fiduciary duties.

COUNT III - BREACH OF DUTY OF GOOD FAITH UNDER LSA-R.S. 22:1973

  1. Brasfield & Gorrie, L.L.C., adopts and re-alleges all averments of Paragraphs 1 -
    33 of the Complaint as if set forth in full herein.
  2. ACE owed a duty to Brasfield & Gorrie of good faith and fair dealing with regard
    to ACE’s claim settling practices.
  3. In violation of Louisiana law, ACE failed to pay the amounts of the claims due to
    Brasfield & Gorrie, L.L.C., within sixty days after receipt of satisfactory proof of loss from
    Brasfield & Gorrie, L.L.C., and ACE’s failure to pay both claims was arbitrary, capricious, and
    without probable cause.
  4. As a result of ACE’s wrongful conduct as set forth above, including ACE’s
    arbitrary and capricious failure to pay Brasfield & Gorrie, L.L.C.’s claims without probable cause,
    Brasfield & Gorrie, L.L.C., is entitled pursuant to LSA—R.S. 22:1973 to be awarded penalties and
    assessed against ACE in the amount of two times the full amount due to Brasfield & Gorrie under

the ACE Policy together with attorneys’ fees and all reasonable costs incurred by Brasfield &
Gorrie, L.L.C. as a result of ACE’s conduct.

COUNT IV - BREACH OF DUTY OF GOOD FAITH UNDER LSA—R.S. 22:1892

  1. Brasfield & Gorrie adopts and re-alleges all averments of Paragraphs 1 - 37 of the
    Complaint as if set forth in full herein.
  2. ACE owed a duty to Brasfield & Gorrie of good faith and fair dealing with regard
    to ACE’s investigation, evaluation, and response to Brasfield & Gorrie, L.L.C.’s claims.
  3. ACE breached its duties and obligations under LSA—R.S. 22:1892. In violation
    of Louisiana law, ACE failed to pay the amounts of the claims due to Brasfield & Gorrie, L.L.C.,
    within thirty days after receipt of satisfactory proof of loss from Brasfield & Gorrie, L.L.C. ACE’s
    failure to pay both claims was arbitrary, capricious, and without probable cause.
  4. As a result of ACE’s wrongful conduct as set forth above, including ACE’s
    arbitrary and capricious failure to pay Brasfield & Gorrie’s claims without probably cause,
    Brasfield & Gorrie is entitled pursuant to LSA—R. S. 22:1893 to be awarded penalties, in addition
    to the amount of the losses, of fifty percent damages on the amount found to be due from ACE to
    Brasfield & Gorrie, L.L.C.

COUNT V - CANCELLATION AND RETURN OF PAID POLICY PREMIUMS

  1. Brasfield & Gorrie adopts and re-alleges all averments of Paragraphs 1 - 41 of the
    Complaint as if set forth in full herein.
  2. Because of ACE’s refusal to pay this valid claim, coupled with its bad faith and
    refusal to adjust another claim of Brasfield & Gorrie, L.L.C.’s made the subject matter of a
    different law suit, namely ACE American Insurance Company v. Brasfield & Gorrie, L.L.C., civil
    action number 14-782-JWD-SCR, of the United States District Court for the Middle District of

Louisiana, Brasfield & Gorrie, L.L.C., shows that the policy of insurance ACE provided was, in
fact, an illusory one and, therefore, Brasfield & Gorrie, L.L.C., seeks rescission of the insurance
contract and a return (restitution) of all premiums Brasfield & Gorrie, L.L.C. paid for this illusory
insurance agreement.

REQUEST FOR TRIAL BY JURY

Brasfield & Gorrie, L.L.C. requests trial by jury on all issues so triable.

WHEREFORE, Brasfield & Gorrie, L.L.C., prays that after due proceedings are held that
there be judgment rendered in favor of Brasfield & Gorrie, L.L.C., and against ACE American
Insurance Company in an amount/s) to be determined after trial, together with interest, penalties,
and attorneys’ fees as may be allowed by law. Further, Brasfield & Gorrie, L.L.C. asks this Court
to award any additional relief, whether in law or in equity, to which Brasfield & Gorrie, L.L.C.
may otherwise be entitled against ACE American Insurance Company.

Dated this 16th day of September 2015

The provided text is an excerpt from a document filed in this case. For a full understanding of the case, one should read the complete court file, including the response.

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