House fire results in suit against insurer

GALVESTON � Complaining a misclassification of their Galveston home caused them to be deprived of full benefits in the aftermath of a fire last year, two Houston residents are suing their insurance company.

A.J. Simpson and Michael Mixon filed suit against Sterling National Insurance Agency Inc. and Empire Indemnity Insurance Co. on July 11 in Galveston County District Court.

The plaintiffs blame the insurers for labeling the property in the 1600 block of 21st Street as "vacant" when they knew it was the plaintiffs' second home.

Recent court documents also target apparent policy benefactors HomeEq Servicing and Owen Loan Servicing LLC, stating the companies worked with Sterling and Empire to recover a debt which Simpson and Mixon insist they do not owe.

According to the original petition, a fire rendered the house on Galveston's East End a total loss on July 11, 2010.

The claimants allege the insurers did not investigate the residence while the policy was in place.

Sterling inspected the presumed loss and relied on an exclusion to pay a reduced amount of benefits, the suit says, adding HomeEq and Owen went by Sterling's results instead of conducting their own investigations.

It further argues that the vacancy clause bore no definitions and the plaintiffs' coverage was anything but existent.

The loss should be expunged from the complainants' obligation, the suit says.

Attorney Darrell M. Steidley of Houston is representing Simpson and Mixon, and Galveston County 10th District Court Judge David Garner is presiding over the case.

Case No. 11-cv-1142