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S.J. LOUIS CONSTRUCTION OF TEXAS, LTD. v. WESTCHESTER FIRE 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: 
3:14-cv-04134 Search Pacer
ACE Group party(s): 
Opposing Party: 
S.J. Louis Construction of Texas, Ltd.
Court Type: 
Federal
US District Court: 
Northern District of Texas
Date Filed: 
Nov 20 2014

PLAINTIFF'S ORIGINAL PETITION AND REQUEST FOR DISCLOSURE
TO THE HONORABLE JUDGE OF THIS COURT:

Plaintiff, S.J. LOUIS CONSTRUCTION OF TEXAS, LTD ("Plaintiff' or "S.J. Louis"),
by and through its undersigned attorneys, files this Original Petition complaining of Defendant,
WESTCHESTER FIRE INSURANCE COMPANY (“Defendant" or "Westchester") based upon
the following:

DISCOVERY
1. Plaintiff intends discovery in this case to be conducted under Level 3, Texas Rule
of Civil Procedure 190.3.
2. Pursuant to Texas Rule of Civil Procedure 194, Plaintiff hereby requests that
Defendants disclose the information or material described in Rule 194.2 within fifty (50) days of
service of this request.

PARTIES
3. Plaintiff, S.J. Louis is a domestic limited partnership organized and existing under
the laws of the State of Texas, with their principal places of business located at 520 South 6th
Ave., Mansfield, Texas.
4. Upon information and belief Defendant, Westchester, is a Pennsylvania company
authorized to engage in the business of insurance in the State of Texas. Westchester's principal
place of business is located at 436 Walnut Street, Philadelphia, PA. Service upon Westchester can
be made by private process server by serving its registered agent for service, CT Corporation
System, 1999 Bryan St., Suite 900, Dallas, TX 75201-3136.

JURISDICTION AND VENUE
5. This Court has jurisdiction over this action because Defendant Westchester was
and/or is authorized to do business in the State of Texas, and is transacting and/or has transacted
business in the State of Texas. The damages alleged are within the jurisdictional limits of the
Court.
6. Venue is proper in Dallas County because all or a substantial part of the events or
omissions giving rise to Plaintiffs claims occurred within Dallas County.
7. Pursuant to Rule 47 of the Texas Rules of Civil Procedure, Plaintiff seeks damages
in excess of $1,000,000 in this action, such damages being within the jurisdictional limits of this
Court.

BACKGROUND FACTS
8. In November 2011, S.J. Louis and Westchester entered into a policy agreement
bearing the number 121055293 001, which was effective November 1, 2011 through November 1,
2012 (hereinafter the "Policy" or the "Insurance Contract"). The Policy agreement provided
certain insurance coverage for S.J. Louis, known as Builders Risk insurance.
9. On or about July 8, 2010, S.J. Louis and Southland Contracting, Inc., a Texas Joint
Venture, bid on a public works improvement project for the Dallas Water Utilities, City of Dallas
("DWU") known as the East Bank-West Bank Interceptor Tunnel project (the "Project"), DWU
Contract No. 09-160 (the "Construction Contract"). On or about October 13, 2010, S.J. Louis and
Southland Contracting Joint Venture and DWU executed the Construction Contract for the
Project.
10. The scope of work in the Construction Contract included the new construction of
two separate tunnels as specified in the Construction Contract drawings and specifications. One
tunnel was specified by DWU to be 96" in diameter, while the second tunnel was specified by
DWU to be 78" in diameter.
11. On January 24, 2012, after having completed the mining and installation of tunnel
support in the 96” tunnel from the Inlet Shaft to the Outlet Shaft, a storm developed in the Dallas
area and along the Project that caused the Trinity River to flood its banks and the 96" tunnel. The
flooding continued through mid-to-late morning on January 25, 2012.
12. On January 27, 2012, S.J. Louis observed in the tunnel that earth movement and
flooding had occurred. It was also observed that this activity was causing damage to portions of
the tunnel support system.
13. On January 28, 2012, S.J. Louis observed that the conditions in the tunnel were
worsening and expanding causing further deterioration to the area. Efforts began to stabilize the
tunnel to preserve the integrity of the facility and in order to repair any damage. As an immediate
option, DWU and its Engineer authorized S.J. Louis to begin constructing a masonry bulkhead on
each side of the main area where the flood and soil material were entering the tunnel and to fill
each bulkhead with cement grout.
14. On January 29, 2012, the flooding and soil entering the tunnel severely worsened
and caused the steel ribs and wood lagging tunnel support to fail, the tunnel to collapse, and
washed out the partially constructed bulkhead that was being constructed at that time as part of
the repair and remediation of the tunnel support. SJ. Louis' crews immediately evacuated and
closed off any further entry into the tunnel.
15. It was observed that a large area on the surface over the tunnel had sunk. The area
observed was approximately 50 feet in diameter and 20 feet deep. SJ. Louis notified DWU of the
condition and thereafter immediately filled the depression with flowable fill in order to further
stabilize the tunnel and tunnel support. On or about February 21, 2012, in accordance with
requirements of the Policy, S.J. Louis notified the Defendant of that it had incurred, and would
continue to incur, loss and damages caused by the flooding and earth movement conditions in the
96" tunnel. At that time, the extent and magnitude of the loss and damage was unknown because
the extent of the loss and damages to the tunnel and tunnel support were not known. Nor was it
known whether or not the flood, earth movement and ground sinking into the tunnel would
continue to expand and cause further unraveling of the tunnel and tunnel support. At that time it
was also unknown the extent and magnitude of the repair work that would be required to the tunnel
and tunnel support in order to bring the tunnel to its condition that existed prior to the flooding
and earth movement events that caused, and were continuing to case, damage to the tunnel.
16. On or about March 27, 2012, Defendant, by and through Engle Martin &
Associates, Inc. ("Engle") conducted a site inspection of the 96" tunnel, including the partially
repaired area above the tunnel where the ground had sunk.
17. On or about March 29, 2012, S.J. Louis mobilized crews from Hayward Baker,
Inc. (“HBI”) to inject grout into approximately 650 feet of the 96" tunnel as part of the repairing
and rebuilding of the damages caused by the flooding and earth movement into the tunnel that had
occurred at the end of January 2012. This work was part of the overall repairs to the tunnel and
tunnel support, among other things, to prevent further unraveling along the tunnel. HBI performed
the intermediary repair work of injecting grout into the 96" tunnel starting at approximately Project
Station 20+65 and continuing to the Outlet Shaft. This remedial grouting work was performed
from mid-April 2012 to mid-May 2012.
18. The remedial grouting work program also required authorization from DWU to remine
the tunnel after the grout injection phase was completed. In or about late November 2012,
DWU authorized recommencement of the remedial work, including mining the grouted section of
the tunnel.
19. Beginning in early December 2012 and continuing through mid-July 2014, S.J.
Louis continued with the repair, replacing and rebuilding of the tunnel, including, but not limited
to re-mining the grouted section.
20. As a result of the loss that occurred in January 2012, S.J. Louis has incurred
damages, including, but not limited to, the actual costs to repair, replace and rebuild the 96" tunnel
in excess of seven million dollars.
21. The actual costs were necessary to repair, replace and rebuild property, including,
but not limited to the tunnel and tunnel support, that were intended to become, and would become,
part of the permanent structure for the Project.
22. Following S.J. Louis' February 21, 2012 notice of claim to Defendant, Defendant
conducted no less than two site inspections of the Project; the first on March 27, 2012 and the
second on September 13, 2013.
23. S.J. Louis has requested payment under the Insurance Policy from Defendant for
the actual costs of repairing, replacing and rebuilding the 96" tunnel.
24. On October 21, 2014, Defendant wrongfully denied S.J. Louis’ claim and has
unreasonably failed and refused to pay S.J. Louis under the Policy.

COUNT ONE
(Breach of Contract)
25. S.J. Louis incorporates by reference herein all prior allegations set forth in the
preceding paragraphs of this Original Petition with the same force and effect as if they were fully
set forth at length herein.
26. S.J. Louis and Defendant entered into the Insurance Contract for insurance
coverage for a Loss and damages sustained as a result of a covered Occurrence.
27. The Policy between S.J. Louis and Defendant provides, inter alia, insurance
coverage for losses and damages caused by a Covered Cause of Loss to Covered Property.
28. The events that occurred on the Project in January 2012 caused losses and damages
to Covered Property.
29. The losses and damages to the Covered Property included the actual costs incurred
by S.J. Louis to repair, replace and rebuild the tunnel and tunnel support, among other things. The
actual costs incurred by S.J. Louis include, without limitation labor, materials, equipment and
subcontractor costs for grout injection, re-mining and rebuilding the tunnel and tunnel support.
30. As a proximate result of the events that occurred in January 2012 on the Project,
S.J. Louis has sustained losses and damages for the actual costs to repair, replace and rebuild the
Covered Property. S.J. Louis has requested payment from Defendant under the Insurance Contract
for the actual costs to repair, replace and rebuild Covered Property, including the 96" tunnel and
tunnel support.
31. However, Defendant has failed and refused to honor its obligations and wrongfully
denied coverage and payment to S.J. Louis in breach of the Insurance Contract.
32. All conditions precedent to the maintenance of this action have been complied with
or waived by Defendant.
33. As a proximate result of Defendant's conduct, S.J. Louis has and continues to be
damaged, the amount of which will be proven at trial.

COUNT TWO
(Breach of the Covenant of Good Faith and Fair Dealing)
34. S.J. Louis incorporates by reference herein all prior allegations set forth in the
preceding paragraphs of this Original Petition with the same force and effect as if they were fully
set forth at length herein.
3 5. The Policy imposes on Defendant a duty of good faith and fair dealing with respect
to any insurance claims submitted by S.J. Louis.
36. Defendant breached its duty of good faith and fair dealing to S.J. Louis because it
has failed, and continues to fail, to conduct a prompt and objectively adequate investigation of the
Loss and Occurrence, recognize coverage under the Policy, and pay S.J. Louis for the losses and
damages it has sustained as a direct and proximate result of a covered occurrence under the Policy.
37. As a result of Defendant's breach of its duty of good faith and fair dealing, S.J.
Louis has and continues to be damaged, the amount of which will be proven at trial.

COUNT THREE
(Violation of the Texas Insurance Code)
38. S.J. Louis incorporates by reference herein all prior allegations set forth in the
preceding paragraphs of this Original Petition with the same force and effect as if they were fully
set forth at length herein.
39. S.J. Louis also brings this suit pursuant to Sections 541.060, 541.061, 541.152 and
541.154 of the Texas Insurance Code. All conditions precedent to maintain this cause of action
have been performed, have occurred, or are otherwise excused by law.
40. Defendant has engaged in the following false, misleading, deceptive acts or
practices pursuant to Section 541.060(a) of the Texas Insurance Code:
a. Failing to attempt in good faith to effectuate a prompt, fair, and equitable
settlement of S.J. Louis' claim to which the insurer's liability has become reasonably clear;
b. Failing within a reasonable time to affirm or deny coverage to S.J. Louis of
its claim;
c. Failing within a reasonable time to submit a reservation of rights to S.J.
Louis;
d. Refusing, failing, or unreasonably delaying a settlement offer.
f. Failing to acknowledge coverage under the Policy and refusing to pay the
actual costs of repairing, replacing and rebuilding Covered Property; and
g. Other false, misleading, deceptive acts or practices under Section
541.060(a) as discovery may reveal.
41. Defendant has also engaged in the following false, misleading, deceptive acts or
practices pursuant to Section 541.061 of the Texas Insurance Code:
a. Making untrue statements of material fact;
b. Failing to state a material fact necessary to make other statements made not
misleading, considering the circumstances under which the statements were made;
c. Making statements in a manner that would mislead a reasonably prudent
person to a false conclusion of a material fact; and
d. Making additional untrue or misleading statements as discovery may
reveal.
42. Defendant's conduct was and is a producing cause of actual damages suffered by
S.J. Louis.
43. Defendant acted knowingly in committing the following false, misleading, and
deceptive acts and practices:
a. Closing S.J. Louis' claim after SJ. Louis confirmed its intent to keep the
claim open;
b. Alleging that S.J. Louis was not responding to Defendant's communications
in or around August 2012, when no such communications were attempted by Defendant;
c. Alleging that S.J. Louis failed to promptly respond to a memorandum,
dated October 24, 2013 even though Defendant did not transmit that memorandum to S.J.
Louis until January 13, 2014, after which S.J. Louis responded on January 14, 2014;
d. And making other false, misleading and deceptive acts and practices as
discovery may reveal.
44. As a result of these knowingly false, misleading and deceptive acts and practices
of Defendant, S.J. Louis seeks trebled damages under Section 541.152(b) of the Texas Insurance
Code.

ATTORNEYS FEES
45. Pursuant to Sections 38.01 et seq. of the Texas Civil Practice and Remedies Code,
Section 17.50(d) of the Texas Business and Commerce Code, or Section 541.1529(a)(1) of the
Texas Insurance Code, Defendant is liable for S.J. Louis’ reasonable and necessary attorney’s fees
and costs incurred in this matter.

PRAYER
Plaintiff demands that:
a. Defendants be cited to appear and answer herein;
b. Plaintiff be granted judgment against Defendant for actual damages and statutory
trebled damages and monetary relief in excess of $1,000,000;
c. Plaintiff be awarded pre and post judgment interest at the lawful rate, court
costs, attorney's fees, and,
d. All other relief, at law or in equity, to which S.J. Louis is justly entitled.

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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