Hindu temple owner Sanatan Shiv Shakti Mandir of Houston, Inc., took out a $600,000 property damage policy with Sirius International Insurance Corp. When Sirius processed the policy, it listed the incorrect street address for the temple building. The parties were unaware of the mistake.
Some time later, the temple contracted with Paul Truong to perform construction work on the building. About a month after the work began, a storm struck the area and severely damaged the building. The temple incurred property losses and expenses for repairs.
About four and a half months later, the temple made a claim for property damage under the insurance policy. Sirius denied the claim, arguing that the property in question was not covered because it had a different street address from the property listed in the policy. The insurer also argued that the temple failed to provide notice within a reasonable amount of time, as required by the policy, because it filed the claim about 137 days after the loss. Sirius subsequently denied coverage again, citing the notice and street address issues, as well as a 60-day vacancy exclusion in the policy.
The temple sued Sirius, alleging that it had failed to pay the claim and engaged in unfair and deceptive settlement practices, in violation of the Texas Insurance Code. Among other things, the temple argued that Sirius had failed to promptly investigate the claim and discover the mistake in the policy. The temple also offered evidence that the vacancy exclusion did not apply because the building had been used for two celebrations during the 60 days the insurer claimed it was vacant.
The temple additionally sued Truong, alleging that he had incorrectly tarped the roof before the storm, contributing to the damage, but non-suited him just before trial.
The jury found that the parties intended to insure the temple and that the wrong address was a mutual mistake reforming the contract. The jury also found that Sirius had knowingly engaged in unfair and deceptive conduct. The jury awarded about $305,700 in actual damages and $2 million in punitive damages for bad faith and knowing violations of the insurance code. The addition of fees and costs brought the total verdict to about $2.59 million.
Citation: Sanatan Shiv Shakti Mandir of Houston, Inc. v. Truong, No. 2010-12731 (Tex., Harris Co. 80th Jud. Dist. Feb. 1, 2012).
Plaintiff counsel : AAJ members Robert D. Green and Daniel P. Barton, both of Houston.