Proposed class action claims American Home Shield Corp. failed to pay out policies

Alejandro de los Rios Jun. 30, 2011, 11:00am

A lawsuit filed in Orleans Parish Civil District Court seeks class action status against insurer American Home Shield Corporation, which has allegedly failed to pay out policy claims to its clients.

New Orleans attorney Michael Riley filed the petition for damages June 23.

Bridgette and William Guadet are currently the only named plaintiffs in the suit.

The suit seeks damages in excess of $75,000 for the plaintiffs via declaratory judgement.

"American Home instituted policies, customs, practices, and procedures encouraging and directing their contractors to follow specific guidelines in a calculated effort to deny claims from policyholders whereby the contractors would receive a considerable bonus for the denial," the suit claims.

The lawsuit claims that American Home – which ensures home appliances and components – "has denied claims made by Plaintiff and class members under its customary grounds of 'lack of maintenance,' 'pre-existing condition,' or 'failure to clean," despite not inspecting the appliances when policies are issued.

The suit claims that American Home agents will deny policy claims because an appliance "possesses de minimis indications of uncleanness" even if the appliance or component failed because of outside factors or regular wear and tear.

The suit also claims American Home is liable for breach of contract, breach of the implied covenant of good faith and fair dealing and fraudulent misrepresentation, among other charges.

It states that the claims made "are separate from the class certified by the United States District Court for the Northern District of Alabama's Southern Division."

This case has been assigned to Orleans Parish Judge Herbert Cade.

Orleans Parish Case 2011-6610

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