New Orleans Health Care Groups Sue St. Paul Travelers

May 31, 2006

In a lawsuit filed on May 23, Civil Action No. 06-2777, in the United States District Court for the Eastern District of Louisiana, Building Concepts & Designs Construction Inc. (BCD) as assignee and attorney in fact for Touro Infirmary and Preferred Continuum Care sued Travelers Property & Casualty Company of America (STA) a subsidiary of St. Paul’s Travelers, for damages exceeding $28 million dollars.

According to an announcement released by the Bezou Law Firm, the suit alleges STA was provided with a Satisfactory Proof of Loss on or about Nov. 15, 2005, again on or about Jan. 10, 2006, and again on or about Feb. 10, 2006. Despite receipt of several comprehensive “Proofs of Loss” STA has tendered less than 4 percent of the alleged amount for which the insurer is liable, the law firm said.

The suit alleges the amounts owed and damages include cost of repairs, damaged property, loss of income, and statutory penalties. The suit further alleges that STA, and four key individuals working for Travelers, acted in bad faith and STA acted arbitrary, capricious and without probable cause. It also claims that the defendants allegedly violated eight Louisiana Revised Statutes and Civil Code and, because of those violations, should be held liable.

The suit further states as a result of the insurer’s actions, the plaintiffs’ sustained substantial damages, including being forced to initiate repairs on their own in order to reopen the hospital to serve the New Orleans community, which is woefully short on hospitals and hospital beds, and thus, have sustained a loss of the use of the funds thus expended, as well as attorney’s fees and other damages to be proven at trial. It alleges, among other things, that the insurer is negligent in failing to honor and/or perform of its duty of good faith and fair dealing to its insured; that defendant failed to make a written offer to settle the property damage claim within thirty (30) days after receipt of a Satisfactory Proof of Loss; and that STA wrongfully and arbitrarily withheld payment of the claim of plaintiff without reasonable grounds

The lawsuit requests that the court order the defendants—Travelers Property & Casualty Company of America, STA, Rick Sparks, Norman Taylor, William Schoenborn and William Schaffer—to pay $28,743,792, which the plaintiffs say represents all amounts due under the policy, including but not limited to cost of repair and/or replace all damaged property and business personal property, extra expenses, expediting expenses, lost income, along with damages and attorney’s fees.

For information or to obtain a copy of the suit contact Attorney Jacques F. Bezou of The Bezou Law Firm, 985-892-2111.

Source: The Bezou Law Firm

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