Orange business owners file class action against State Farm

David Yates Feb. 18, 2009, 10:00am

ORANGE -- Orange County business owners have brought a class action against State Farm Lloyds, claiming the insurance company stiffed them on business interruption proceeds in the weeks following Hurricane Ike.

On behalf of herself and all similarly situated Texas citizens, Marcia Delarue filed the class action Feb. 10 in Orange County District Court.

Delarue, who is an attorney, runs a law office at 702 West Park Ave. in Orange.

Court document show that her business was covered by a State Farm insurance policy, which offered loss of income proceeds if her business was interrupted.

"On Sept. 13, 2008, Hurricane Ike roared ashore inflicting severe damage along the Texas Gulf Coast," the suit states. "In the process, Ike damages the property where Delarue's law office is located."

In her suit, Delarue says due to the amount of damage and lack of basic services in Orange County, it took 68 days to restore her business.

"Delarue's office was not repaired, (and) her computer systems … including an internet connection … were not fully operational until Nov. 28, 2008, 68 days after the Orange County mandatory evacuation order was issued," the suit states.

When she submitted her claim for 68 days of lost business, State Farm paid Delarue "only for the period of time the Orange County mandatory evacuation order was in effect," giving her a total of eight days of payable coverage, the suit states.

Delarue alleges State farm's policies "wrongfully shortchange the business interruption insurance payments owed to the thousands of Texas citizens business owners" who have suffered loss of income as a result of Hurricanes Rita, Gustav and/or Ike.

Delarue is suing for the 60 remaining days she claims State Farm owes her, injunctive relief and all court costs.

The class is represented by Mitchell Toups and other attorneys from the Weller, Green, Toups & Terrell law firm in Beaumont and by the Coffman Law Firm.

Case No. A090075

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