Louisiana Record

Friday, February 28, 2020

Company alleges insurer committed breach of contract

By Carol Ostrow | Jun 2, 2015

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A Houma company has sued its insurance firm over a coverage issue.

Candies Shipbuilders of Houma filed a lawsuit May 29 against Westport Insurance Corporation of Overland Park, Kansas, in U.S. District Court of the Eastern District of Louisiana May 29, citing contract violation.

According to the complaint, Westport Insurance issued a medical indemnity policy to Candies Shipbuilders providing coverage from July 1, 2013 through June 30, 2014, and the policy covers only sums spent by the plaintiff and not actual persons. The suit also says the shipbuilder’s employee benefit plan was administered separately by Southern Benefit Service (SBS), and SBS determined if Candies was to pay a claim, and if so, Candies could then seek reimbursement from Westport.

The suit says on Feb. 28, 2014, a patient covered by SBS was admitted to a hospital neonatal intensive care unit with life-threatening conditions and remained at the facility past the June 30 end date of the policy period.

SBS approved the hospital’s reimbursement request, according to the complaint. When Candies sought reimbursement from Westport on  Sept. 17, 2014, for $954,694.45, the suit says, Westport denied $234,905.00 of the total on Oct. 29, 2014, without requesting documentation, reviewing records, or performing a bill audit first.

The complaint states the only reasons given for the denial were “possible billing errors,” “unbundled and duplicate charges,” and similar phrases. Candies Shipbuilders alleges Westport’s denial was arbitrary and cites the defendant for breach of faith, fair dealing, and contract.

Candies Shipbuilders seeks full insurance coverage, statutory penalties, actual damages in excess of $75,000, pre- and post-judgment interest, attorney fees, expenses and court costs. The plaintiff is represented by attorneys Thomas Cortazzo and Larry Mobley of Baldwin Haspel Burke & Mayer in New Orleans.

U.S. District Court of the Eastern District of Louisiana case number: 2:15-cv-01798-LMA-JCW.

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