Construction company claims insurer deceptive about workers' comp coverage

Kelly Holleran Jan. 5, 2009, 7:00am

Capitol Crew Construction has filed suit against Lawhorn Insurance Company and one of its agents, alleging it was not provided with the workers' compensation the agent told Capitol Crew it had.

Capitol Crew applied for the workers compensation after winning a bid to repair a metal building at Reagent's located at 8840 Yacht Club Road in Port Arthur, according to the complaint filed Dec. 17, 2008, in Jefferson County District Court.

Before beginning work on the contract, Capitol Crew was forced to obtain workers' compensation, the suit states.

So, on Oct. 21, 2008, Niki Crew of Capitol Crew contacted her commercial insurance broker, Craig Lawhorn, and requested he obtain suitable workers compensation coverage, Capitol Crew contends.

On Oct. 23, Lawhorn submitted a certificate of insurance to Reagent, indicating Capitol Crew had obtained workers' compensation coverage with an effective policy date of Oct. 23, 2008, according to the complaint.

But Lawhorn never placed the insurance with Texas Mutual Insurance Company, and Capitol Crew did not have the workers' compensation coverage it was supposed to have, the suit states.

Not until a worker named Randy Arreuza was injured on Oct. 23, 2008, did Capitol Crew learn it did not have the insurance coverage, it claims.

Because of Arreuza's injury, Capitol Crew has continued to pay him a limited salary and placed him on office duty, according to the complaint.

"To date, the Crews have paid Mr. Arreuza in excess of $3,500 in salary which should have been paid by the workers' compensation provider but for Mr. Lawhorn's failure to procure the requested coverage," the suit states.

In addition, Arreuza's doctors have started to threaten Capitol Crew with legal action for his medical bills, which are in excess of $30,000, the company alleges.

Lawhorn made a material misrepresentation when he presented a certificate of insurance to Reagent when there was no actual insurance, according to the complaint.

Lawhorn Insurance Agency and Lawhorn violated the Texas Deceptive Trade Practices Act by representing that an agreement confers or involves rights, remedies or obligations it does not have and by representing to Reagent Capitol Crew had workers' compensation coverage, the suit states.

Capitol Crew Construction is seeking a judgment in its favor and relief to which it may be entitled.

It is represented by Paxton N. Crew and Billy J. Frey of Legge, Farrow, Kimmit, McGrath and Brown in Houston.

The case has been assigned to Judge Gary Sanderson of the 60th District Court.

Case No. B182-871

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