Alleged denial of coverage for foundation damage at LC home results in lawsuit

GALVESTON - League City residents Patricia and Scott Williams are suing State Farm Lloyds Inc. and State Farm Insurance Co., claiming the insurers failed to cover foundation damages to their home. 

A lawsuit filed Nov. 16 in Galveston County District Court shows the defendants "denied coverage based on a faulty evaluation of the Williams’ claim," insisting the insurers committed breach of contract and a "bad faith violation of policy language and Texas law."

The plaintiffs bought the residential homeowners property insurance policy from State Farm sometime in late 2010.

The policy, which was for a period between Oct. 6, 2010, and Oct. 6, 2011, "was designed to cover, and does cover, the property damage to the Williams' house," the suit says.

In May 2011, the couple discovered that their front door was binding and there was cracking on the interior and exterior walls for which they submitted a claim to the defendants.

State Farm brought in Leak Locators of Texas to test the sanitary sewer and domestic water systems three months later, and a plumbing report was then given to Terracon Consultants to render an opinion.

According to the original petition, Terracon put together an "admittedly incomplete" report with "defective findings" which State Farm relied on to turn down the coverage in a letter dated Dec. 16, 2011.

"The Terracon report failed to properly credit either the temporal connection between the subsurface foundation plumbing leaks and the foundation cracking or the relative proximity of such plumbing leaks and such foundation cracking," the suit says.

It further explains the plaintiffs performed additional evaluations and took photographs which they sent to State Farm to forward to Terracon, adding the insurers "only forwarded a select number of the photographs."

The plaintiffs assert they "have incurred in excess of $23,000 in costs evaluating and remediating the damage to their home caused by the subsurface foundation plumbing leaks" and "expect to incur additional substantial costs to finally and fully remediate their property."

A jury trial is requested.

The plaintiffs are representing themselves.

Galveston County 405th District Court Judge Wayne Mallia is presiding over the case.

Case No. 12-CV-2817