Hurricane insurance claim leads to suit against inurer, adjuster

By Kelly Holleran | Dec 29, 2008

A Jefferson County couple has filed suit against State Farm Lloyds and an adjuster, alleging they were not paid money to which they were entitled after Hurricane Rita destroyed sections of their home.

When Charles and Sandra Conn's property at 420 Norwalk Lane in Beaumont sustained roof, water, wind, foundation and structural damage on Sept. 24, 2005, during the storm, they submitted a claim to State Farm, which had insured their property, according to the complaint filed Dec. 16 in Jefferson County District Court.

The Conns requested State Farm cover the cost of repairs and asked for additional living expenses, the suit states.

However, State Farm denied the Conns' claim, even though their policy promised coverage for such losses, the couple claims.

It denied the claim after assigning Steven Craig Stover to adjust the claim, according to the complaint.

State Farm told the Conns 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.

"Defendants 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.

State Farm also failed to affirm or deny coverage of the Conns' claim within a reasonable time, another violation of the Texas Insurance Code, unfair settlement practices, the Blounts claim.

State Farm's behavior constitutes a breach of contract because it did not live up to promises made in its insurance policy with the Conns, according to the complaint.

Stover violated the Texas Insurance Code because he misrepresented material facts relating to the coverage, according to the complaint.

Stover and State Farm are also liable for common law fraud, the suit states.

"Each and every one of the representations, as described above, concerned material facts for the reason Plaintiffs would not have acted and which State Farm and Stover knew were false or made recklessly without any knowledge of their truth as a positive assertion," the suit states.

The Conns 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 and J. Steve Mostyn 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. D182-865

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