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

HAEUSER et al v. WESTCHESTER SURPLUS LINES INSURANCE COMPANY

ATTENTION: It is possible that this information may no longer be current and therefore may be inaccurate. The index contains both open and closed cases and is not a complete list of cases in which an ACE Insurance Group company is involved. This information is provided to give interested persons an idea of the issues disputed in the indexed cases. For a full understanding of a case, one should read the rest of the court file, including the response. For the most up-to-date and complete information on a case, visit www.pacer.gov or contact the clerk of the relevant court.

Case Number: 
2:13-cv-05631 Search Pacer
Opposing Party: 
Louis D Haeuser
Court Type: 
Federal
US District Court: 
Eastern District of Louisiana
Date Filed: 
Aug 28 2013

FIRST CAUSE OF ACTION – BREACH OF CONTRACT

12.  Westchester’s failure to pay plaintiffs the full replacement cost owed for losses and damages to the properties covered under the Westchester policy constitutes a breach of Westchester’s contractual obligations to these plaintiffs. Westchester’s breach of its policy of insurance entitles plaintiffs to a damage award equal to $885,793.40, the full amount of the replacement cost for the losses and damages to their property less the amount previously paid by defendant, which has been improperly and unjustly denied by defendant.

SECOND CAUSE OF ACTION – BREACH OF DUTY TO PROPERLY ADJUST INSURANCE CLAIM AND ARBITRARY AND CAPRICIOUS FAILURE TO PROVIDE TIMELY PAYMENT AFTER RECEIPT OF SATISFACTORY PROOF OF LOSS

13.  As early as September 2012, the defendant had available the necessary information and documentation establishing the full extent of plaintiffs’ losses and damages of their properties. From that information, it was undisputed, and indisputable, that plaintiffs were entitled to substantial loss payments by Westchester for the replacement cost coverage provided by the Westchester policy. Yet, defendant paid plaintiffs nothing. It was only after plaintiffs hired counsel and repeatedly pressed plaintiffs’ claim for coverage under the policy that defendant paid plaintiffs anything. And then, when it did agree to pay, defendant agreed to pay plaintiffs far less than their documented losses and damages covered under the Westchester policy.

14. Further, defendant blatantly and implicitly misrepresented its policy provisions by adamantly and repeatedly, but incorrectly, maintaining to plaintiffs that the $100,000 minimum per occurrence windstorm deductible applied separately (“per location”) to each of the plaintiffs’ scheduled properties damaged by Hurricane Isaac. By misrepresenting the policy’s deductible, defendant sought to severely and improperly limit the plaintiffs’ recoverable losses to far less than what plaintiffs are entitled to recover under the Westchester policy. This significant misrepesentation of the deductible provisions of its own policy caused the defendant to effectively deny coverage for the losses to plaintiff’s properties caused by Hurricane Isaac, which substantially hampered plaintiffs’ ability to fund necessary repairs to their properties. It was only after plaintiffs retained counsel and their counsel challenged defendant’s misrepresentation of the deductible provision that defendant reversed its erroneous position and conceded that the $100,000 minimum windstorm deductible applied only once per occurrence to all damage in the aggregate, not per location as defendant previously maintained.

15. In January 2013, in response to plaintiffs’ demand for an interim loss payment of $317,788.57, defendant made a meager initial payment to plaintiffs totaling $150,000 on only two properties, without any explanation for this reduced loss payment. In April 2013 defendant made a second payment totaling $58,848.35, without a proper explanation for this reduced loss payment or the tardiness of this payment. Moreover, defendant admitted that these payments were “undisputed amounts for verified ‘Isaac’ related damage.” These payments were issued more than 60 days after plaintiffs submitted satisfactory proof of loss for these properties.

16. Defendant’s delay in paying undisputed and indisputable covered losses and damages, its misrepresentation of the deductible provisions in its own policy, and its gross undervaluation of plaintiffs’ covered losses and damages, has caused plaintiffs damage by delaying plaintiffs’ restoration of the damaged properties and their return to their full economic use. Moreover, defendant’s mishandling of this matter has needlessly forced plaintiffs to incur expenses, including but not limited to attorneys’ fees, engineering fees, expert fees and costs, in an effort to compel defendant to properly comply with its clear contractual obligations to these plaintiffs.

17. Defendant breached its duty to properly adjust this insurance claim by misrepresenting its policy provisions, by purposefully minimizing the scope and extent of the physical damage to the properties caused by Hurricane Isaac, and by failing to pay the amount of the claim within 60 days of receipt of satisfactory proof of loss. Defendant’s failure to properly adjust plaintiffs’ insurance loss and damage and failure to timely pay plaintiffs the full replacement cost for covered losses was reckless, arbitrary, capricious, willful and without probable cause. Accordingly, plaintiffs are entitled to damages, penalties, attorney’s fees, engineering and construction evaluation fees and costs under La. R.S. 22:1892 and 22:1973 and other applicable provisions of Louisiana law.

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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