Leo D. Congeni

GRETNA – A Gretna-based towing company is suing a statewide trust claiming it was misled into participating in an insurance trust that may result in the company paying nearly $300,000 for the trust's bankruptcy.

D.J. Enterprise, Inc. of Gretna and Dale's Towing & Storage filed suit against Towing & Recovery Professional of Louisiana Unsecured Creditor's Trust, Frank McGee, Towing and Recovery Professionals of Louisiana, Inc., Denham Holdings, LLC, Catlin Specialty Insurance, Lucien Fred Burkett, William Rudy Smith, Carol Buckley, Steven M. Evans, James W. Holden, David Paul Feske, Sr, Rickey Marie, Shelton Lee Rogers, Glenn P. Faul, Gary E. Varnado. Sr., Theodore Maxie Magnon, Sr. and Houston Casualty Company in the 24th Judicial District Court on Aug. 3.

Dale's Towing claims it is a moderate sized tow truck operation and own 13 tow trucks and employed 10 workers and as such belonged to Towing & Recovery Professional of Louisiana that provides professional coverage for liability claims and judgments that may arise when accidents involving work towing vehicles. The plaintiff alleges that Fred Burkett was engaged by the trust at a cost of two percent of annual premiums to provide assistance in day to day operations and that his brother Charles Burkett as proprietor of Performance, a contractor with the trust who works on commissions, received 10 percent of premiums, which was later increased to 11 percent with an alleged "kick-back" to Fred Burkett.

Dale's asserts it understood under the agreement with the defendants that it was insured up to $1 million per incident.

From 2003 through 2007 the company paid $1,783 in fees and $291,999 in coverage charges to the Trust, but it was never notified that the trust could at any time, in contrast to other insurance plans, re-assess premiums up to the amount of the initial charges to cover policy deficits years after the expiration on the policy.

The plaintiff claims it dropped out of the trust in 2007 because it found a traditional insurer that provided better rates. Dale's claims that the Burketts failed to disclose information about the revenues and assets of the trust showing that they were insufficient to meet the demands of defense. In 2010 the trust underwent Chapter 11 bankruptcy and was unable to cover indemnity claims.

A report released by the Louisiana Department of Insurance allegedly found gross financial mismanagement of behalf of the Burketts and violations of state law.

The trustee was appointed due to the liquidation of the trust due to bankruptcy alleged reserves the right to reassess the entirety of past payments made by Dale's in the amount of $291,999 in order to liquidate deficiencies.

The defendants are accused of breaching a standard of reasonable care, constructive or actual fraud, gross negligence, willful misconduct, intentional misrepresentation and breach of fiduciary duty.

The plaintiff is seeking declaratory relief by being removed from any liability to the trust's debts, indemnification from third party claims.

Dale's Towing is represented by Leo D. Congeni of the New Orleans-based Law Office of Emile L. Turner, LLC.

The case has been assigned to Division A Judge Raymond S. Steib.

Case no. 717-817.

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