Property owner sues insurer over hail damage claim

David Yates Oct. 9, 2008, 7:51am

Urban Quest Properties is suing its insurance provider for failing to honor more than two dozen claims made after its properties were showered with hail.

The suit against Southeast Surplus Underwriters General agency and Ranchers and Farmers Insurance Co. was filed Oct. 2 in the Jefferson County District Court.

According to the suit, on May 5, 2006, the defendants issued five property insurance policies to Henry Carter, who in October 2006 transferred his properties to Urban Quest, a closely held corporation owned and operated by Henry Carter's three sons.

"At that time, James Carter, one of the principals of and an agent for Urban Quest, contacted Defendants regarding transfer of the properties and to determine if new policies would need to be written to cover Urban Quest as the insured," the suit says.

"Defendants, by and through their employee and underwriter Sherry Carter, unequivocally represented to James Carter that the named insured on the policies would be changed from Henry Carter to Urban Quest without additional application and/or the need to issue new policies.

"Shortly thereafter, on or about October 30, 2006, Urban Quest sent a fax to Sherry Carter's attention requesting that the named insured on the Policies be changed to Urban Quest."

In December 2006, some two months after the defendants first assured Urban Quest that the named insured on the Policies was being changed, James Carter's assistant once again contacted the defendants to inquire into the extraordinary delay, the suit says.

The plaintiffs, who continued to pay their premiums during the switch, were assured by the defendants once again that the transfer was taking place

"On March 12, 2007, Urban Quest filed a claim � for hail damage," the suit says. "In response to Urban Quest's claim, Defendants assigned the claim to an adjuster. The claims adjuster inspected the property and determined that the property had sustained damage in the amount of $5,959.28.

"Defendants issued a check in that amount to Henry Carter. James Carter immediately contacted Defendants and requested that the check be made payable to Urban Quest, as they were now the owners of the properties and purportedly the named insured under the Policies.

"With no objection, and no request for further information or application, Defendants reissued the check made payable to Urban Quest. Therefore, from both Defendants and Urban Quest's perspectives, the Policies were in full force and effect with Urban Quest as the named insured."

Shortly thereafter, Urban Quest flied an additional 28 claims for hail damage to other properties covered by the Policies. Again, Defendants assigned an adjuster to inspect the properties and the adjuster determined that each property bad sustained hail damage, the suit says.

"However, it was only when these additional damage amounts were presented to Defendants for payment that Defendants, for the first time, asserted that Henry Carter was the named insured under the policies, denied Urban Quest's additional claims, and simultaneously stopped payment on the $5,959.28 check made payable to Urban Quest."

The plaintiffs are accusing the defendants of fraud and are suing for actual and compensatory damages.

They are represented by Houston attorney Vijay D'Cruz.

Case No. B182-481

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