F & R Group Investments claims it thought it had protection when it filed an insurance claim after Hurricane Ike caused damages to one of its local hotels, the Quality Inn.
But after being denied its claim because of what F & R claims is its insurance agent's negligence, it has filed suit against its agent and against Texas Windstorm Insurance Association.
F & R completed a TWIA application on Aug. 27 through Khan Insurance Agency to secure windstorm insurance with liability limits of $2 million, according to the complaint filed Jan. 20 in Jefferson County District Court.
On the same day, it also issued a $6,305.25 check to Khan as a down payment on the $24,221 insurance premium, the suit states.
But Khan did not mail the application and the payment to TWIA until Sept. 5, F & R alleges.
In addition, when Khan submitted the application, F&R alleges he failed to submit a required replacement cost calculation.
When TWIA received the application on Sept. 10, it transmitted a document to Khan notifying the agent that he failed to submit the replacement cost calculation, the suit states.
Three days later, on Sept. 13, Hurricane Ike hit and did substantial damage to the Quality Inn, F & R claims.
On Sept. 15, F & R visited Khan and asked to file a claim on the damages to its hotel, according to the complaint.
F&R claims Khan made repeated excuses to F & R, and told the hotel company that it had to delay filing the claim.
Finally F & R claims it discovered that Khan had not returned the required replacement cost calculation to TWIA until Sept. 22, thus making the policy not effective until Sept. 23, a full 10 days after the storm made landfall.
So when F & R filed a claim for damages to its hotel, the claim was denied, according to the complaint.
In addition, TWIA informed the company that it had stopped writing new policies for windstorm coverage on Sept. 8, when the storm was in the Gulf of Mexico.
"TWIA informed F & R that it stopped writing insurance on Sept. 8, 2008, and that F & R's policy with TWIA did not become effective until Sept. 23, 2008," the suit states.
The plaintiff alleges that TWIA and Khan made false representations to entice F & R into purchasing the insurance, according to the suit.
They also violated the Texas Deceptive Trade Practices Act by causing misunderstanding about the approval of its services, by representing goods had approval they did not actually have and by representing that goods were of a particular quality when they were not, according to the complaint.
TWIA and Khan further violated the DTPA by representing an agreement involves rights it does not have, by failing to disclose information that was known at the time of the transaction, by constituting unconscionable conduct and acting in an unfair practice, the suit states.
They also violated the Texas Insurance Code by issuing a statement misrepresenting the terms of the policy, by making untrue statements in regard to a policy and by making a statement that would mislead a person to a false conclusion, F & R alleges.
F & R is seeking a judgment within the jurisdictional limits of Jefferson County District Court, plus unspecified statutory and exemplary damages, attorney's fees, pre- and post-judgment interest as allowed by law, court costs and other relief to which it may be entitled.
James Amaro and Zachary D. Norris of The Amaro Law Firm in Houston will be representing the plaintiff.
The case has been assigned to Judge Gary Sanderson of the 60th District Court.
Jefferson County District Court case number: B183-074.