A Jefferson County medical professional association and one of its physicians have filed suit against an insurance company and several contractors alleging they were not paid money to which they were entitled after Hurricane Rita destroyed sections of their business.
Beaumont Family Practice Associates and Dr. Jay C. Proctor III filed suit against Central Mutual Fire Insurance Company, Delk Construction, Graziano Roofing of Texas, Hampshire Roofing Company and Sterling Barnett Little on Dec. 19 in Jefferson County District Court.
After the medical practice at 6450 Folsom in Beaumont sustained roof, water, wind and structural damage on Sept. 24, 2005, from the hurricane, they submitted a claim to Central, which had insured their property. The practice and Dr. Proctor requested Central cover the cost of repairs and asked for loss of business income, the suit states.
However, Central denied the plaintiffs' claim, even though they allege the policy promised coverage for such losses.
Central told the plaintiffs the damage to their property was not covered under the claim, which constitutes a violation of the Texas Insurance Code, unfair settlement practices, the suit states.
"Defendant Central failed to make an attempt to settle Plaintiffs' claim in a fair manner, although they were aware of their liability to Plaintiffs under the Policy," the suit states.
Central also failed to affirm or deny coverage of Beaumont Family Practice Associates' and Proctor's claim within a reasonable time, another violation of the Texas Insurance Code, unfair settlement practices, she claims.
Central's behavior constitutes a breach of contract because it did not live up to promises made in its insurance policy with Beaumont Family Practice Associates and Proctor, according to the complaint.
It also violated unfair settlement practice in the Texas insurance code by misrepresenting material facts relating to Beaumont Family Practice Associates' and to Proctor's coverage, the suit states.
Central violated the Texas insurance code for prompt payment of claims by failing to acknowledge receipt of Beaumont Family Practice Associates' and Proctor's claim, they allege.
Delk, Graziano, Hampshire and Sterling breached a contract entered into between them and Beaumont Family Practice Associates and Proctor, according to the complaint.
"Delk, Graziano, Hampshire and Sterling were aware of their responsibilities, the terms and consideration under the contract and knew or should have known by the exercise of reasonable diligence that their liability to Plaintiffs was reasonably clear," the suit states.
All four companies are also liable for common law fraud because their products and services were not as advertised and were misleading, Beaumont Family Practice Associates and Proctor claim.
"Each and every one of the representations, as described above, concerned material facts for the reason Plaintiffs would not have acted and which Delk, Graziano, Hampshire and Sterling knew were false or made recklessly without any knowledge of their truth as a positive assertion," the suit states.
Beaumont Family Practice Associates and Proctor are seeking actual, treble, punitive and exemplary damages, plus attorney's fees, costs, pre- and post-judgment interest and other relief to which they may be entitled.
Michael R. Ramsey and Gregory F. Cox of Beaumont of The Mostyn Law Firm in Houston will be representing them.
The case has been assigned to Judge Milton Shuffield, 136th District Court.
Case No. D182-889.