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

LEREW BROTHERS et al v. HUNTER et al

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: 
1:12-cv-02154 Search Pacer
Court Type: 
Federal
US District Court: 
Middle District of Pennsylvania
Date Filed: 
Oct 31 2012

"V. FIRST CAUSE OF ACTION BREACH OF FIDUCIARY DUTY AGAINST HUNTER, HUNTER INSURANCE, RAIN & HAIL AND ACE

35. The averments contained in paragraphs 1 through 34 above are incorporated by reference as though fully set forth herein.

36. The limited power of attorney provided by Lerew on behalf of Lerew Brothers, Lerew Farms and Cloverdale, to Hunter and Hunter Insurance conferred= authority to do and perform all actions as required and necessary to legally execute all paperwork to Rain & Hail and ACE under the jurisdiction of the Federal Crop Insurance Program.

37. The Agency/Company Agreement between Hunter and Hunter Insurance as agent and agency and Rain & Hail as company authorized Hunter and Hunter Insurance to solicit and receive applications for Rain & Hail for insurance written by ACE and confirmed that Hunter and Hunter Insurance had powers of attorney to act on behalf of policyholders with respect to multiple peril crop insurance policies with Rain & Hail and ACE.

38. The failure of Hunter and Hunter Insurance to execute any necessary paperwork to submit in writing on behalf of Lerew Brothers, Lerew Farms and Cloverdale the requested policy change to increase the level of coverage from 50% to 60% for crop year 2011 constituted a breach of fiduciary duty under the limited power of attorney by Hunter and Hunter Insurance, individually and as agent and agency on behalf of Rain & Hail and ACE.

39. The breach of fiduciary duty by Hunter, Hunter Insurance, Rain & Hail and ACE resulted in collective damages to Lerew Brothers, Lerew Farms and Cloverdale in the amount of $392,912.00.
WHEREFORE, Lerew Brothers, Lerew Farms and Cloverdale demand judgment in their favor and against Hunter, Hunter Insurance, Rain & Hail and ACE in the amount of $392,912.00 plus interest, and such other and further relief as this Court may deem proper.

VI. SECOND CAUSE OF ACTION NEGLIGENCE AGAINST HUNTER, HUNTER INSURANCE, UFER, RAIN & HAIL AND ACE

40. The averments contained in paragraphs 1 through 39 above are incorporated by reference as though fully set forth herein.

41. Hunter and Hunter Insurance, as agents of Rain & Hail and ACE, had a duty under the Agency/Company Agreement to properly complete all necessary forms and documentation in writing in a timely manner in order to conform to the requirements of the crop insurance policy to effectuate the request by Lerew Brothers, Lerew Farms and Cloverdale to change their policy for crop year 2011 to increase the level of coverage from 50% to 60%.

42. Hunter and Hunter Insurance, as agents of Rain & Hail and ACE, had a duty to Lerew Brothers, Lerew Farms and Cloverdale as insureds, to properly complete all necessary forms and documentation in writing in a timely manner in order to conform to the requirements of the crop insurance policy to effectuate the request to change their policy for crop year 2011 to increase the level of coverage from 50% to 60%.

43. In the alternative, Hunter, Hunter Insurance, Rain & Hail and ACE, had a duty to Lerew Brothers, Lerew Farms and Cloverdale, as insureds, to advise them in a timely manner that their request for a change in policy for crop year 2011
to increase the level of coverage from 50% to 60% needed to be submitted in writing by Lerew personally to Hunter and Hunter Insurance, as agents of Rain & Hail and ACE, or on a form or other documentation utilized for that purpose and acceptable to Rain & Hail and ACE.

44. Hunter, Hunter Insurance, Rain & Hail and ACE breached their duty to Lerew Brothers, Lerew Farms and Cloverdale, as insureds, in failing either to properly complete the necessary forms and other documentation in a timely manner to effectuate the requested change in policy to increase the level of coverage from 50% to 60% for crop year 2011, or to advise the insureds in a timely manner that additional written notification was necessary in order to conform to the requirements of the crop insurance policy.

45. To the extent that Hunter and Hunter Insurance relied upon Ufer, as Claims and Quality Control Manager of Rain & Hail, for instructions on how to complete and submit the Form 5030 for purposes of renewal and requested policy changes, and completed the Form 5030 in reliance upon that training, Ufer, Rain & Hail and ACE breached their duty to their agents, Hunter and Hunter Insurance, thereby foreseeably causing Hunter and Hunter Insurance to breach their duty to the insureds, Lerew Brothers, Lerew Farms and Cloverdale.

46. The breach of duty by Hunter, Hunter Insurance, Ufer, Rain & Hail and ACE resulted in collective damages to Lerew Brothers, Lerew Farms and Cloverdale in the amount of $392,912.00.
WHEREFORE, Lerew Brothers, Lerew Farms and Cloverdale demand judgment in their favor and against Hunter, Hunter Insurance, Ufer, Rain & Hail and ACE in the amount of $392,912.00 plus interest and such other and further relief as this Court may deem proper.

VII. THIRD CAUSE OF ACTION BAD FAITH AGAINST RAIN & HAIL AND ACE

47. The averments contained in paragraphs 1 through 46 above are incorporated by reference as though fully set forth herein.

48. Ufer provided training to Hunter and Hunter Insurance in regard to completion and submission of Form 5030 for purposes of application or renewal of insurance policies, including requesting policy changes such as an increase in coverage level as requested by Lerew Brothers, Lerew Farms and Cloverdale from 50% to 60% for crop year 2011.

49. If the insured was required by the policy provisions to submit the request for a policy change to the agent in writing, Ufer failed to communicate to Hunter and Hunter Insurance that their completion and submission of the Form 5030 based upon the information provided by and on behalf of the insured did not satisfy that requirement, and, on the contrary, instructed Hunter and Hunter Insurance to complete and submit the Form 5030 as it was done in this case.

50. Ufer knew, or had the opportunity to know, that the Form 5030 for Lerew Brothers, Lerew Farms and Cloverdale directing a policy change increasing the coverage level from 50% to 60% for crop year 2011 was submitted to Rain & Hail and ACE by Hunter and Hunter Insurance on December 3, 2010, on the basis of which Rain & Hail and ACE issued Summary of Coverage forms confirming the coverage level at 60% and accepting the premium for the increased level of coverage as a policy change for Lerew Brothers, Lerew Farms and Cloverdale for crop year 2011.

51. Despite that knowledge, Ufer requested of the insureds, Lerew Brothers, Lerew Farms and Cloverdale, only after their respective claims were filed, that they provide written confirmation of the requested change in coverage for crop year 2011.

52. Ufer was aware, at all material times, that Hunter and Hunter Insurance were agents of Rain & Hail and ACE, and that Hunter and Hunter Insurance, acting in that capacity on behalf of Rain & Hail and ACE, submitted the Form 5030 for Lerew Brothers, Lerew Farms and Cloverdale in accordance with Ufer's instructions.

53. Ufer is compensated based upon the profitability of Rain & Hail and ACE.

54. Ufer, Rain & Hail and ACE have a vested interest in the outcome of the claim after the claim is filed, in that any claims payment will detract from the profitability of Rain & Hail and ACE, and decrease the compensation to Ufer based upon the decreased profitability of Rain & Hail and ACE.

55. Ufer knew that Hunter and Hunter Insurance, as agents of Rain & Hail and ACE, had notice from the insured of the requested policy change increasing the level of coverage, and that, because Ufer provided the training to Hunter and Hunter Insurance in regard to how to complete and submit the Form 5030, Hunter and Hunter Insurance would rely upon that training in carrying out its responsibilities on behalf of the insured and as agent for Rain & Hail and ACE.

56. Ufer knew that the completion and submission of the Form 5030 was solely within the control of Hunter and Hunter Insurance, as agents of Rain & Hail and ACE, and that the Form 5030 was not submitted directly by any of the insureds, Lerew Brothers, Lerew Farms and Cloverdale.

57. Ufer, together with his supervisor, Charles Goode ("Goode"), Vice President, Atlantic Coast Division, Rain & Hail, and Hunter have had a long standing personal and professional acrimonious relationship which resulted i Goode, on Rain & Hail letterhead, issuing a letter dated July 3, 2012 to Hunter and Hunter Insurance terminating the Agency/Company Agreement, and Ufer, on Rain & Hail letterhead, issuing a letter dated July 5, 2012 to Hunter and Hunter Insurance advising that a compliance officer of the United States Department of Agriculture, Risk Management Agency, Eastern Regional Compliance Office would be reviewing original policy files in Hunter Insurance's office.

58. Ufer's denial of the requested change in policy increasing the coverage level from 50% to 60% for crop year 2011, solely on the basis that the notice from the insured to Rain & Hail and ACE through their agent, Hunter and Hunter Insurance, was not in writing was frivolous and unfounded and was motivated by self-interest and ill will.

59. The issuance by Rain & Hail and ACE of the revised Summaries of Coverage, unilaterally reducing the coverage level to 50% after the claims were filed, and after accepting the policy change and the premium for a coverage level at 60%, was done for a dishonest purpose in breach of a known duty of good faith  and fair dealing owed by Rain & Hail and ACE, as insurers, to Lerew Brothers, Lerew Farms and Cloverdale, as insureds.

60. Ufer's investigative practices to require the insureds to submit written confirmation of the requested change in policy, which had to be obtained from Hunter and Hunter Insurance, as agents of Rain & Hail and ACE, were carried out in bad faith.

61. Ufer's investigative practices to allege misrepresentation by the insureds and to threaten to void the policy and subject the insureds to remedial sanctions including disqualification from the Federal Crop Insurance Program were in bad faith.

62. Ufer, at all material times, was acting in the course and scope of his employment with Rain & Hail, the managing general agent and wholly owned subsidiary of ACE.

63. As a result of the bad faith insurance practices of Rain & Hail and ACE, as insurers, Lerew Brothers, Lerew Farms and Cloverdale, as insureds, have incurred collective damages in the amount of $392,912.00 and are further entitled to interest, punitive damages, costs and attorney's fees under 42 Pa.C.S.A. §8371.

WHEREFORE, Lerew Brothers, Lerew Farms and Cloverdale demand judgment in their favor and against Rain & Hail and ACE in the amount of $392,912.00 plus interest, punitive damages, costs, attorney's fees and such other and further relief as this Court may deem proper."

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.

Javascript is required to view this map.