HOSPITALITY ENTERPRISES, INC. Et Al v. WESTCHESTER SURPLUS LINES INSURANCE COMPANY Et Al Complaint

Case 2:11-cv-00234-EEF-DEK Document 1-1 Filed 02/03/11 Page 1 of 23
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HOSPITALITY ENTERPRISES, INC. AND
GARDEN DISTRICT HOTEL ON ST. CHARLES AVENUE, LLC
_rL_.~i
VERSUS
WESTCHESTER SURPLUS LINES INSURANCE COMPANY, D E INVESTMENTS,

INC. d/b/ a SERVPRO OF NORTH KENNER, HARAHAN AND LAKEVIEW, and
SEWAGE AND WATER BOARD OF NEW ORLEANS
FILED: _ _ _ _ _ _ _ __
DEPUTY CLERK
PETITION FOR DAMAGES
NOW INTO COURT, through undersigned counsel, come Plaintiffs, GARDEN
DISTRICT HOTEL ON ST, CHARLES AVENUE, LLC, a domestic limited liability
company capable of suing and being sued and HOSPITATILITY ENTERPRISES, INC., a
domestic corporation, capable of suing and being sued, both entities domiciled in the
Parish of Orleans State of Louisiana who aver as follows'

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D~LE
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1. HEll ·]RLE~N.sf LA '(1112
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Made Defendants, jointly and in solido, are:

DATE: 1211312010 at 15H2
(a) WESTCHESTER SURPLUS LINES INSURAN@E'COMPPrNY ; ~hl!reinafter
REC£IPW 2572~8
PRICE PAID eAl
referred to at times as "WESTCHESTER") is now, and at all times relevant to this action
was, a foreign insurer, authorized to do and doing businesffIN~;~A8'iiLouis.~~a;., 0.00

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(b) D E INVESTMENTS, INC. d/b/a SERVPRo,~9tIi ~~~tH K1B~R, 0.00
1)).!)0 $ 10.00 $ 0.01)
HARAHAN AND LAKEVIEW (hereinafter referred tqqT~! f~E i¥l21)i'9..~prot~}~~~
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domestic corporation, organized under the laws of the Sta~l9.~ ~Hi~I).w,hich lists its
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principal place of business with the Louisiana SecretarY:=~t~~~=:!~=,fu,~J;'Mi~h=9f

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n)
Ouachita, State of Louisiana but with its principal place of business in fact located in the
Parish 9f Jefferson, State of Louisiana; and
(c) SEWAGE AND WATER BOARD OF NEW ORLEANS, (hereinafter
EXHIBIT
I A Psrry ,A. Barb~rin . Sr

D~Pli~V e!erk \~ \ 9~ \ )0 l
sometimes referred to' as "SWB"), a domestic body corporate created by statute, la. RS.
§ 33:4071 et seq., with the attributes of a corporation and capable of suing and being
sued, with its principal place of business in Orleans Parish, Louisiana.
2.
At all times pertinent hereto, Westchester held out a Commercial Property Policy
(policy number 036082653 003) with additional coverages, including but not limited to
water damages, sprinkler .leakage, building damages, business personal property and
other losses listed in the policy, in favor of Plaintiffs, Garden District Hotel on St.
Charles Avenue, LLC and Hospitality Enterprises, Inc., in full force and effect,
providing coverage to Plaintiffs, under the terms and conditions of which it
contractually agreed to indemnify Plaintiffs for the losses and damages asserted herein.
Plaintiffs allege all coverages listed in the policy identified herein as if copied in extenso.
3.
On or about January 7, 2010, the sprinkler system at the Garden District Hotel
located at 2203 st. Charles Avenue, New Orleans, Louisiana (hereinafter referred to as
the "Hotel"), malfunctioned, causing sprinkler leakage and water damages to the
building, ceilings walls, floors, contents, equipment, supplies, materials, and other items
of the Hotel.
4.
Plaintiffs sustained extensive damages to the Hotel and are entitled to additional
sums for loss of use and other reimbursable damages at the insured premises. Although
Westchester inspected the property and eventually made payment for Plaintiffs' losses,
Plaintiffs have received inadequate compensation from Westchester, their insurer.
5.
Plaintiffs provided timely notice of the loss. On or about January 7, 2010,
Plaintiffs contacted their agent Eustis to report the subject incident. Upon information
and belief, Eustis reported the incident to Westchester that evening. On January 8, 2010,
a formal claim was initiated under the subject policy.
2
6.
On January 11, 2010, Westchester informed Plaintiffs that it had retained Engle
Martin to adjust the claim.
7.
On January 14, 2010, Engle Martin's adjuster inspected the premises and
determined that there were extensive damages caused by sprinkler leakage.
8.
On January 19, 2010, Westchester caused another adjuster to inspect the Hotel for
the purported purpose of doing a formal appraisal of damages. This adjuster
completed his work the same day and said he would report his findings to Westchester
the following week.
9.
Upon information and belief, Westchester's second representative did not
complete his work in a timely fashion, and Westchester delayed completion of the
adjusting process and failed to make any payment on Plaintiffs' insured loss for many
months.
10.
During the inspections, both claims representatives questioned Plaintiffs'
representatives about issues that falsely implied coverage issues where none existed.
11.
On February 11, 2010 a representative of Westchester telephoned Plaintiffs'
representative and informed her that a letter would be sent, stating that Westchester
was reserving its rights to contest coverage and claiming that coverage was not
established for Plaintiffs' claim.
12.
No reservation of rights letter was ever sent, and Plaintiffs never received any
communication from Westchester indicating that coverage was disputed.
3
13.
For the sole purpose of avoiding and delaying payment and other unfair
settlement advantages, from February 11, 2010 until September 2010, Westchester
continued to claim that it needed further documentation of central station water flow
alarm monitoring before it could make any payment on Plaintiffs' claim.
14.
Plaintiffs' policy provides for a CENTRAL STATION WATER FLOW ALARM.
However, exclusions related to the alarm apply solely to fire losses and not to the
damages sustained by Plaintiffs.
15.
Plaintiffs' policy contained a Vacancy Permit for which Plaintiff paid an
additional premium.
16.
By virtue of the Vacancy Permit, no exclusions claimed by Westchester applied
to Plaintiffs' claims for water damages from sprinkler leakage.
17.
At all pertinent times between February 11, 2010 and September 29, 2010,
Westchester and its representatives misrepresented policy provisions and the scope of
insurance coverage for the sole purpose of avoiding and/ or delaying rightful payment
of Plaintiffs' claims.
18.
Defendant Westchester had Notice and Proof of Loss of Plaintiffs' claims at least
by January 19, 2010 and despite repeated demand for payment, unjustifiably refused to
make any payment to Plaintiffs until September 29, 2010, when it tendered the sum of
$108,339.70.
19.
The sum paid by Westchester was grossly inadequate to compensate Plaintiffs
for losses sustained at the hotel.
4
20.
Plaintiffs have sustained consequential damages as a result of Westchester's
misconduct. Further, due to Westchester's failure to fulfill its contractual obligations,
Plaintiffs were forced to incur the expense of retaining an attorney and experts, as well
as court costs to obtain fair compensation under the policy.
COUNT I. BREACH OF CONTRACT AGAINST WESTCHESTER
21.
Plaintiffs adopt and incorporate by reference all of the allegations in the foregoing
paragraphs as if fully set forth herein.
22.
Westchester has failed and refused to provide Plaintiffs with the recovery to
which Plaintiffs are entitled for insured losses resulting from a covered cause of loss.
Westchester has breached the express terms and conditions of the Commercial Property
Policies and has otherwise denied Plaintiffs the insurance coverage provided by the
Commercial Property Policy.
23.
Westchester has been arbitrary, capricious, and without probable cause, in
delaying payment, failing to complete the inspection and adjustment process timely,
raising false issues regarding coverage and failing to make a reasonable offer to satisfy
the claim.
24.
La.R.S. 22:1892 provides that "except in the case of catastrophic loss, the insurer
shall initiate loss adjustment of a property damage claim within fourteen days after
notification of loss by the claimant. Failure to comply with the provisions of this
Paragraph shall subject the insurer to the penalties provided in RS. 22:1973."
25.
Westchester failed to take substantial and affirmative steps to initiate the loss
adjustment process of the Commercial Property Insurance Policy claim within the legal
5
delays allowed of notification of the loss.
26.
La. RS. 22:1973, (fonnerly RS. 22:1220) provides that an insurer "owes to his
insured a duty of good faith and fair dealing," and provides that the insurer "has an
affinnative duty to adjust claims fairly and promptly, and to make a reasonable offer to
settle claims with the insured." The statute further provides that "any insurer who
breaches these duties shall be liable for any damages sustained as a result of the
breach."
27.
La. RS. 22:1973 further provides that an insurer who breaches their duties is liable
for, in addition to any general or special damages, a penalty equal to the greater of two
times the damages sustained or $5,000.00.
28.
Pursuant to La. RS. 22:1892 & 1973, Westchester is obligated to pay Plaintiffs the
amount of actual damages sustained, plus a penalty of two times the actual damages
sustained by Plaintiff.
29.
Westchester has wrongfully failed to pay all sums due on the claims submitted by
Plaintiffs, or, alternatively, wrongfully constructively denied the claim within the time
provisions established by La. RS. 22:1892 and La. RS. 22:1973. In so doing, Westchester
has breached the express terms and conditions of the Commercial Property Policy and
has otherwise denied Plaintiffs the insurance coverage promised by Westchester in a
manner that has been arbitrary, capricious and without probable cause.
30.
Further, Westchester has acted without reasonable basis or justification and in
contravention of their duty of good faith and fair dealing in handling Plaintiffs' claims,
namely:
a. It has unreasonably and intentionally refused to pay benefits to which
6
Plaintiffs are entitled under the terms of the Commercial Property Insurance
Policy;
b. It has unreasonably and intentionally delayed payments to which Plaintiffs
are entitled under the terms of the Commercial Property Insurance Policy;
c. It has intentionally failed to conduct a reasonable investigation into the claim
reasonably based on all available information, to reasonably evaluate and
review the information, and to make reasonable and timely efforts to settle
the claims;
d. It has no reliable knowledge or information upon which to substantiate a
constructive denial of Plaintiffs' claims;
e. The methodology used by Westchester to determine plaintiffs' losses is
contrary and offensive to "public policy" in Louisiana; and
f. It has not accounted for the increased costs of labor, services, raw materials,
and other construction necessities due to economic conditions in the
geographic location of the Gulf Coast Region following recent catastrophic
events in their property loss calculations, despite coverage provided in the
Commercial Property Policy for "replacement costs."
31.
Westchester acted with actual knowledge or with reckless disregard of the lack
of a reasonable basis in denying the claims, delaying full payment of all portions of the
claim, failing to make reasonable attempts to settle all portions of the claim, and/ or
failing to conduct a reasonable investigation into all portions of the claim and failing to
reasonably evaluate the available information.
32.
Westchester, through its agents, contractors and others for which it is responsible
committed the following non-exclusive unfair settlement practices enumerated in LRS
22:1214, all of which give rise to liability under LRS 22:1892 and 22:1973, to wit:
(a) Misrepresented pertinent facts or insurance policy provisions relating to
7
coverages at issue;
(b) Failed to acknowledge and act reasonably promptly upon communications
with respect to claims arising under insurance policies;
(c) Failed to pay claims without conducting a reasonable investigation based
upon all available information;
(d) Failed to affirm or deny coverage of claims within a reasonable time after
proof of loss statements have been completed;
(e) Not attempting in good faith to effectuate prompt, fair, and equitable
settlements of Plaintiffs' claim after liability became reasonably clear;
(f) Compelling Plaintiffs to institute litigation to recover amounts due under
their insurance policy by ignoring obvious damages and tendering an
unreasonable sum as "full payment";
(g) Failed to promptly provide a reasonable explanation of the basis in the
insurance policy in relation to the facts or applicable law for denial of a claim
or for the offer of a compromise settlement;
(h) Other unfair settlement practices enumerated within 22:1214 learned in
Discovery.
33.
As a direct result of Westchester's bad- faith conduct and unfair settlement
practices, Plaintiffs have suffered compensatory damages in an amount not yet
ascertained, and will continue to suffer damages, including, but not limited to, lost
business opportunities and income, other business losses associated with unfair
payment and delay in payment, consequential damages and any costs and attorneys'
fees that may be incurred in maintaining this action.
34.
Plaintiff is entitled to recover from Westchester all losses, including costs and
attorney's fees, caused by Westchester's breach of contract and state law.
8
35.
Westchester intentionally breached its duty of good faith owed to Plaintiffs
under La. RS. § 22:1973.
36.
Pursuant to La. RS. 22:1892, Westchester is obligated to pay Plaintiff proper
coverage under the Commercial Property Policy, plus a penalty of 50% of the amount
due, as well as reasonable attorneys' fees and costs.
37.
La.RS. 22:1973 provides that an insurer "owes to his insured a duty of good faith
and fair dealing" and provides that he insurer "has an affirmative duty to adjust claims
fairly and promptly, and to make a reasonable offer to settle claims with the insured."
The statute further provides that "any insurer who breaches these duties shall be liable
for any damages sustained as a result of the breach."
38.
La. RS. 22:1973 specifically provides among the actions breaching the insurer's
duties set forth above are:
a. "Misrepresenting pertinent facts or insurance policy provisions relating to
any coverages at issue," or
b. "Failing to pay the amount of any claim due any person insured by the
contract within sixty days after receipt of satisfactory proof of loss from
the claimant when such failure is arbitrary, capricious, or without
probable cause." La. RS.22:1973.
39.
The statute further provides that an insurer who breaches this duty is liable for,
in addition to any general or special damages, a penalty equal to the greater of two
times the damages sustained or $5,000.00.
40.
Pursuant to La. RS. 22:1973, Westchester is obligated to pay Plaintiffs the
9
amount of actual damages sustained, plus a penalty of two times the actual damages
sustained by Plaintiffs.
COUNT II. CLAIMS FOR BREACH OF CONTRACT AND NEGLIGENCE

AGAINST D E INVESTMENTS, INC. (SERVPRO)
41.
Plaintiffs adopt and incorporate by reference all of the allegations in the
foregoing paragraphs as if fully set forth herein.
42.
On January 8, 2010, less than 24 hours after the subject incident, Plaintiffs'
representatives contracted with Servpro to remediate all water damages caused by the
January 7, 2010 sprinkler leakage. Servpro, through its agents, employees and others
for whom it is responsible, commenced work that date and worked through about noon
on January 9, 2010.
43.
Despite undertaking the obligation to properly remediate the damages, Servpro
committed the following acts and/ or omissions of negligence, including, to wit:
(a) Failed to properly investigate the damages;
(b) Failed to adequately dry all areas of damage;
(c) Failed to remove wet carpet and drywall;
(d) Failed to use proper moisture detection methods;
(e) Failed to use proper equipment to dry the damages;
(f) Made unsuitable recommendations to Plaintiff concerning the scope of work
required; and
(g) Other acts and omissions of negligence to be adduced at trial.
All negligent acts and/ or negligent omissions enumerated above occurred in the
Parish of Orleans, State of Louisiana and constitute actionable breaches of the contract
with Plaintiffs and Servpro's obligations of due care.
10
44.
The negligence of Servpro, its agents, employees and others for whom it is
responsible under respondeat superior and master/servant liability, proximately
caused and exacerbated damages to the building caused by the January 7, 2010 incident.
45.
Plaintiffs paid Servpro to make suitable recommendations and to properly
remediate all water damages at the premises of the Hotel in a commercially acceptable
manner, a task which said defendant agreed to undertake and in bad-faith failed to
perform under the contract thereby breaching the contract and casting Servpro liable
unto Plaintiffs for all compensatory and consequential damages.
46.
The allegations made against Servpro arise out of the January 7, 2010 incident,
and the facts, damages, witnesses and evidence inextricably overlap with Plaintiffs'
claims against Westchester such that said claims involve a community of interests
which, for purposes of judicial consistency and economy, should be tried in the same
proceeding.
47.
Westchester has made partial payment to Plaintiffs and upon belief and
information may be legally and contractually subrogated to Plaintiffs' rights against D E
Investments, Inc. for the sum of Westchester's partial payment.
COUNT III. CLAIMS FOR NEGLIGENCE AGAINST SEWAGE AND

WATER BOARD OF NEW ORLEANS
48.
Plaintiffs adopt and incorporate by reference all allegations and facts contained
in the preceding paragraphs as if set forth fully herein.
49.
Defendant Sewage and Water Board of New Orleans ("SWB") is a statutorily
created body corporate charged with constructing, controlling, maintaining, and
11
operating the public water and drainage system of the city of New Orleans under La.
R.S. § 33:4071.
50.
At all pertinent times, SWB controlled, maintained and operated the water and
drainage system supplying water to the insured premises and owed a duty to Plaintiffs
to provide water and drainage services to the insured premises at a reasonable pressure
to avoid causing damage to the insured premises.
51.
Based on information and belief, defendant SWB through its agents, employees,
representatives, and/ or designees negligently failed to monitor and control the water
pressure to the insured premises, causing the sprinkler system to fail resulting in
significant damages to the Hotel.
WHEREFORE, Plaintiffs, Hospitality Enterprises, Inc. and Garden District Hotel
on st. Charles Avenue, LLC, demand judgment against Defendants, WESTCHESTER
SURPLUS LINES INSURANCE COMPANY, D E INVESTMENTS, INC., and SEWAGE
AND WATER BOARD OF NEW ORLEANS, jointly and in solido, for such damages as
are reasonable and/or proven at trial, including payment for compensatory damages,
consequential damages, statutory penalties, costs, and attorneys' fees, legal interest
from date of judicial demand and for such further relief as the Court deems just and
proper.
Respectfully submitted,
61)
Kir ea nover (Bar No.2 39)
Wesley . Barr (Bar No. 32332)
400 Poydras Street, Suite 1980
New Orleans, LA 70130
Telephone: (504) 587-1440
Facsimile: (504) 587-1577
Counsel for Plaintiffs. Hospitalittj Enterprises, Inc.
and Garden District Hotel on St. Otarles Avenue
12
PLEASE SERVE:
(1) WFSTCHFSTERSURPLUS LINES INSURANCE COMPANY,

THROUGH ITS DESIGNATED AGENT FOR SERVICE OF PROCESS:
Louisiana Secretary of State
(2) D E INVESTMENTS, INC.,

THROUGH EITHER OF ITS DESIGNATED AGENTS FOR SERVICE OF
PROCESS:
H.E. AYDLETT, JR.

1917 OLIVE ST.
MONROE, LA 71201
OR
DONALDE. LEGG
1917 OLIVE ST.
MONROE, LA 71201
(3) SEWAGE AND WATER BOARD OF NEW ORLEANS

THROUGH ITS LEGAL DEPARTMENT:
625 st. Joseph Street

New Orleans, LA 70165
13
TO: COMMISSIONER'INSURANCE
P.O. BOX 94214
BATON ROUGE, LA 70804
FROM: CLERK OF COURT, PARISH OF ORLEANS
RE: R.S. 9.2800.7 REPORTING FORM - PERSONAL INJURY
Section A shaft be obtained by the Clerk of Court at the time suit is filed and submitted
to the Commissioner of Insurance within 30 days of filing.
Section A shaN be completed at the time Judgment becomes definitive.
A. INITIAL INFORMATION
1. Caption of Suit: HOSPITALITYENTERPRISES,INC. ET AL
vs ,
WESTCHESTER SURPLUS LINES INSURANCE COMPANY
ETAL
a) Parish: ORLEANS b) Docket No,: 2010-12413
c) Judicial District CDC d) Fifing Date: 1211312010
e) Type Suit
11 Auto - Bodily Injury 7. Professional Uabitity
2. -Uninsured Motorist - a . Medical
3. -Govemment Uability - b . Legal
4. X General Uabllity c. Architectural
5. -Products Uability - d . Accounting
6. Redhibition e. Engineering
8. -Other
2. Nature of Injuries (If Ascertainable from Petition):
Section B shan be obtained by the Clerk of Court and subrriltted to the CommisSIoner of
Insurance within 30 days of deffnitlve judgment (Section A (1)a - c must also be completed
In order to accurately report.)
B. JUDGMENT INFORMATION
1. Judgment by Merit Tna!:
a) Judge Jury
b) For the Plaintiff For the Oefendant
c)
-
Judgment awarded, ellClusive of interest and costs:
1. - 0-
2. - 0·- but less than $10,000
3. $10;000 but less than 525,000
4. $25,000 but less than $50,000
5. - - ,$50,000 but'less than~100,OOO
6. $100,000 but less than $250,000
7. $250,000 but less than $500,000
8. $500,000 but less than $750,000
9. $750,000 but less than $1,000,000
10. $1,000,000 but less than $2,000,000
11. $2,000,000 or more
2. Appeal Status
'a) Appeal Entered b) No Appeal Entered
section C shan be completed by the Clerk of Court and submitted to the Commissioner of
Insurance within 30 days Of dismISSal.
C. DISMISSAL INFORMATION
1. Date of DismisSal:
2. WIth Prejudice WIthOut Prejudice
D. A processing fee 01$10.00 shall be taxed as costs of court In each suit onwhlehthe
Information required by this section is submllted by the Clerk of Court. Upon rendering of
judgment under Section B of this form or dismisSal under Section C ofthls form, $5.00 shan be
paid to the Commissioner of Insurance by the Clerk of Court and $5.00 shall be retained by the
Cletk from the court costs paid in SectiorfD.
CLERK OR DEPUTY CLERK
CommiSSioner's Copy
ATTORNEY'S NAME: Olinde Jr, A8 20061
Case 2:11-cv-00234-EEF-DEK
AND ADDRESS: Document 1-1
400 POYDRJII!II§TREET,
NEW ORLEANS
SUITEFiled
"960 02/03/11 Page 15 of 23
LA 70130
II
CIVIL DISTRICT COURT FOR THE PARISH OF ORLEANS
STATE OF LOUISIANA ~ ,~
NO: 2010 - 12413 3 SECTION: .-\,

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HOSPITALITY ENTERPRISES, INC. ET AL VERSUS WESTCHESTER SURPLUS LINES INSURANCE Cb~ANY

~~ , ~
CITATION - -I
l
TO: SEWERAGE AND WATER BOARD OF NEW ORLEANS )
THROUGH: Irs LEGAL DEPARTMENT:
625 ST. JOSEPH STREET "
NEW ORLEANS LA 70165
YOU HAVE BEEN SUED:
You must either comply with the demand contained in the petition
FOR DAMAGES W/DISCOVERY ATTACHED.
a CE!rtified copy of which accompanies this citation, or file an answer or other legal pleading in the office of the Clerk of
this Court, Room 402, Civil Courts Building, 421 Loyola Avenue, New Orleans, LA, within fifteen (15) days after the
service hereof under penalty of default
... .............................•......•..•................................... --.
ADDITIONAL INFORMATION
Legal assistance is advisable. If you want a lawyer and can't find one, you may call the New Orleans Lawyer
Referral Service at 561- 8828. This Referral Service operates in conjunction with the New Orleans Bar Association. •
If you qualify, you may be entitled to free legal assistance through the New Orleans Legal Assistance Corp.; you
may call 529 - 1000 for more information.
• COURT PERSONNEL ARE NOT PERMITTED TO GIVE LEGAL ADVICE
•••• * ••• * ••• ****.***.** •• *~.*.*.** •••••• • *.*.* •••• *.*.-_ ......... -.. -.-_._-----.-
IN WITNESS HEREOF, I have hereunto set my hand and affix the seal of the Civil District Court for
the Parish of Orleans. State of LA .December 22, 2010
Clerk's Office, Room 402. Civil Courts Building.

421 Loyola Avenue
New Orleans, LA
SHERIFF'S RETURN
(for use of prJcess servers only)
PERSONAL SERVICE DOMICILIARY SERVICE
On this. l.{ day of_--=J""Il-:...:...;..Jtl.....:....._ _ _ __ • On this _ _ _ day of _ _ _ _ _ _ _ _ _ __
1.t2/l served a copy of the wfl petition _ _ _ _ _ served a copy of the wfl petition
FOR DAMAGES WIOISCOVERY ATTACHED. • FOR DAMAGES WIOISCOVERY ATTACHED.
On • On
SEWERAGE AND WATER BOARD OF NEW ORLEANS SEWERAGE AND WATER BOARD OF NEW ORLEANS
THROUGH: Irs LEGAL OEPARTMENT: THROIIGH: Irs I FoGAL DEPA.qTMENT:
• by leaving same at the dwelling house. or usual place of

• abode. in the hands of _ _ _ _ _ _ _ _ _ _ __
a person of suitable age and discretion residing therein as
same day a member of the domiciliary establishment, whose name
y?9J . No.
and other facts connected with this service Ileamed by
interrogating HIM I HER the said _ _ _ _ _ __
--------t-""l(""-- • SEWERAGE AND WATER BOARD OF NEW ORLEANS
Mileage: $_ _ _ _ _ _ _ _ _ __
-~J<qI.=l/lf.AkJ.e!E'-R------'1 ENTERED I.----~t__ being absent from the domicile at time of said service.
Retumed same day
J ~ (OS' No.
Dep~ySheriffof _ _ _ _ _ _ _ _ _ __
SERIAL NO . DEPUTY
f "' _ 4
ATTORNEY'S NAME: Olinde J r t l d 20061
AND ADDRESS:
Document
400 POY 1-1 Filed 02/03/11 Page 16 of 23
STREET, SUITE 1980
NEW ORL S LA 70130 '
CIVIL DISTRICT COURT FOR THE PARISH OF ORLEANS

STATE OF LOUISIANA
NO: 2010 - 12413 SECTION: 7 -- E
HOSPITALITY ENTERPRISES, INC. ET AL VERSUS WESTCHESTER SURPLUS LINES INSURANCE COMPANY

8~ ~
'.
CITATION
TO: WESTCHESTER SURPLUS LINES INSURANCE COMPANY ...
THROUGH: ITS DESIGNATED AGENT FOR SERVICE OF PROCESS: THE LOUISIANA
SECRETARY OF STATE; FOR THE STATE OF LOUISIANA
BATON ROUGE LA 70809
YOU HAVE BEEN SUED:
FOR DAMAGES W/DISCOVERY ATTACHED.
a certified copy of which accompanies this citation, or file an answer or other legal pleading in the office of the Clerk of
••••••• * •• * •• * •• * ••••• ** ••••••••••••• **** •• **** •• ****.******.******.*****.**.* •• *
Legal ~ssistance is advisable. If you want a lawyer and can't find one, you may can the New Orleans Lawyer
Referral Service at 561- 8828. This Referral Service operates in conjunction with the New Orleans Bar Association. •
may call 529 - 1000 for more Information.
• COURT PERSONNEL ARE NOT PERMITTED TO GIVE LEGAL ADVICE
**** •• **** •• *********** •• * ••• * •••••••••••••••• ** ••••••••••• *** ••••••••• ** ••••••••
IN WITNESS HEREOF, I have hereunto set my hand and affix the seal of the Clv" District Court for
the Parish of Orleans, State of LA December 22,2010
Clerk's Office, Room 402, Civil Courts Building, DALE N. ATKINS, Clerk of
421 Loyola Avenue
New Orleans, LA
SHERIFF'S RETURN
(for use of pr~ss servers only)
PERSONAL SERVICE ('. ~ 1..~'I\ ~~ DOMICILIARY SERVICE
~ v • ~~
On this _ _ _ day of ~~ '" \~W;iS _ _ _ day of _ _ _ _ _ _ _ _ __
served a copy of the wii petition ",,,II ,,"" • served a copy of the w/i petition
F-O-R-D-AM-A-G-E-S-WIOISCOVERY ATIACHED. Il,e ,," • C,\~" FOR DAMAGES WIOISCOVERYATIACHED.
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WESTCHESTER SURPLUS LINES INSU . NcffegMPAN,(,~\t-i c;\:

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WEST
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. LINES INSURANCE COMPANY
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THROUGH: IT'S DESIGNATED AGENT FOR S
PROCESS: THE LOUISIANA SECRET
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S1X ' ; FOR

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THROUGH: IT'S DESIGNATED AGENT FOR SERVICE OF

PROCESS: THE LOUISIANA SECRETARY OF STATE; FOR
THE STATE OF LOUISIANA oc9\) , * THE STATE OF LOUISIANA
* by leaving same at the dwelling house, or usual place of
* abode, in the hands of _ _ _ _ _ _ _ _ _ _ __
____--::-:-_--:--__--:-__~----* a person of suitable age and discretion residing therein as
Returned same day a member of the domiciliary establishment, whose name
No. and other facts connected with this service I leamed by
Interrogating HIM 1 HER the said _ _ _ _ _ __
Deputy Sheriff of _ _ _ _ _ _ _ _ _ _ _ * WESTCHESTER SURPLUS LINES INSURANCE COMPANY
Mileage: $._ _ _ _ _ _ _ _ _ __
__~~..,I::.~-,' ENTERED ' _ _ _ _ _ _ _ _ being absent from the domicile at time of said service.
REWB N : 0 Retumed same day
--------'
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~
a"e Deputy Sheriffof _ _ _ _=
No.
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ATTORNEY'S NAME: Olinde Jr,
AND ADDRESS:
Document 20061 A_
1-1 Filed 02/03/11 Page 17 of 23
400 POYDRf'JWrREE'~-SUITE 1980
\.
NEW ORLEANS LA 70130 / \
;;.
f. I CIVIL DISTRICT COURT FOR THE PARISH OF ORLEANS . , ~ ..- '. "
I0 I~ 'f 13 STATE OF LOUISIANA

( ""I
'-'~
2010 -- 12413 2 SECTION:
"" 7 -_~
, . I) I,
HOSPITALITY ENTERPRISES, INC, ET AL VERSUS WESTCHESTER SURPLUS LINES INSURANCE COMPANY."
~~ . ~
CITATION
TO: D E INVESTMENTS, INC.
THROUGH: Irs DESIGNATED AGENT FOR SERVICE OF PROCESS: H.E. AYDLETT,
JR. OR DONALD E. LEGG
1917 OLIVE STREET
MONROE LA 71201
YOU HAVE BEEN SUED:
FOR DAMAGES WIDISCOVERY ATTACHED.
a certified copy of which accompanies this citation, or file an answer or other legal pleading in the office of the Clerk of
._*_.av._ ... k •••• _a ..• _.. ___ ._. __ ._._. __ ._. __ • ____ .• _. *******~*******************
Legal assistance is advisable. If you want a lawyer and can't find one, you may call the New Orleans Lawyer
Referral Service at 561- 8828. This Referral Service operates in conjunction with the New Orleans Bar Association.
may call 529 - 1000 for more information.
*. __
* COURT PERSONNEL ARE NOT PERMITTED TO GIVE LEGAL ADVICE
a • • _._ • • • • • • _._ • • _._ • • _ • • _._ • • • _ . _ . _ . _ . _ . _ • • • • • • • _*_._._._ .. _... _.... _._ .....
IN WITNESS HEREOF, I have hereunto set my hand and affix the seal of the Civil District Court for
the Parish of Orleans, State of LA December 22,2010
Clerk's Office, Room 402, Civil Courts Building, DALE N. ATKINS, Clerk of
421 Loyola Avenue
New Orieans, LA
SHERIFF'S RETURN
(for use of process servers only)
PERSONAL SERVICE DOMICILIARY SERViCE
On this _ _ _ day of _ _ _ _ _ _ _ _ __ * On this _ _ _ day of _ _ _ _ _ _ _ _ _ __
_ _ _ _ _ served a copy of the wli petition _ _ _ _ _ served a copy of the w/i petition
FOR DAMAGES WIOISCOVERY ATIACHED. * FOR DAMAGES WIOISCOVERY ATIACHED.
On * On
D E INVESTMENTS, INC. D E INVESTMENTS, INC.
THROUGH : Irs DESIGNATED AGENT FO\{ SERVICE OF THROUGH: Ir3 DESIGNATED AGENT FOR SERVICE OF
PROCESS : H.E. AYDLETI, JR. OR DONALD E. LEGG PROCESS: H.E. AYDLETI, JR. OR DONALD E. LEGG
* by leaving same at the dwelling house, or usual place of

* abode, in the hands of _-,-_ _ _ _ _ _ _ _ __
-------::-:--""7"---;--------.* stritabl~'age and discretion residing therein as
Returned same day ,: !.. ;1a person-of
f;:I~mp'er of the domiciliary establishment, whose name
and otHer facts conneCted with this service I learned by
_ _ _ _ _ _ _ _ _ _ _ _ _ _N_o_._ _ _....:'.... * interrogating HIM I HER the said _ _ _ _ _ __
, *
Deputy Sheriff of _ _ _ _ _ _ _ _ _ _'"7' DE INVESTMENTS,INC.
Mileage: $._ _ _ _ _ _ _ _ _ __
* '.
~
/ENTEREDI b'eihg absent from·ttie domicile at time of said service.
P ER ~lURN Refurriei:lsame da'y
, ,_J\..f_--'-___
4}(f'SH DeputyS ~~f

OO~JlQ:l_<tl(LJ".-e~_ __
FOR ____________ ________
NO~I. SE~-_,,-=....:..-~ _
'''j'O/Ct;fP.2,(
.~
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_ _ ,., r.,,1I 1_cI(-{') -
2011 JAN 2' P 3: 112
FILED ON BEHALF OF SEWERAGE AND WATER BOARD OF NEW ORLEANS. 'IL

GOVERNMENT - PAYS NO COURT COSTS - LA. R.S. 13:4 1... L;I V
CIVIL DISTRICT COURT FOR THE PARISH OF ORLEA
STATE OF LOUISIANA
NO. 2010·12413 SECTION 7·E
HOSPITALITY ENTERPRISES, INC. AND GARDEN DISTRICT

HOTEL ON ST. CHARLES AVENUE, LLC
VERSUS
WESTCHESTER SURPLUS LINES INSURANCE COMPANY, DE INVESTMENTS,

INC. d/b/a SERVPRO OF NORTH KENNER, HARAHAN AND LAKEVIEW,
AND SEWAGE AND WATER BOARD OF NEW ORLEANS
FILED: _ _ _ _ _ _ _ _ _ _ _ 2011
DEPUTY CLERK
•••••••••••••••••••••••••••••••••••••••••••••••••••••••••••
ANSWER TO PETITION FOR DAMAGES
NOW INTO COURT. through undersigned counsel. comes the Sewerage and
Water Board of New Orleans, defendant herein. and in answer to the Petition for
Damages, avers the following , to-wit:
1.
The allegations contained in Paragraph 1 of the Petition are admitted as to the
status of the Sewerage and Water Board of New Orleans.
2.
The allegations contained in Paragraphs 2 through 48 of the Petition for
Damages. as they apply to the Sewerage and Water Board of New Orleans, are denied
for lack of sufficient information to justify a belief therein.
3.
The allegations contained in Paragraph 49 of the Petition are admitted as to the
status of the Sewerage and Water Board of New Orleans.
4.
The allegations contained in Paragraph 50 of the Petition are denied for lack of
sufficient information to justify a belief therein.
5.
The allegations contained in Paragraph 51 of the Petition are denied.

I '
I
FIRST DEFENSE
The Petition fails to state a cause of action .
SECOND DEFENSE
The cause in fact of the damages complained of was the negligence of
plaintiffs. whose negligence should operate as a complete bar or in diminution of
plaintiffs' recovery.
THIRD DEFENSE
In the alternative, defendant affirmatively avers that the plaintiffs' alleged
damages were caused by persons or parties over whom this defendant exercises no
authority. jurisdiction. control. or supervision of whom it is not legally responsible .
FOURTH DEFENSE
In the further alternative. defendant avers that plaintiffs assumed the risk of their
damages.
FIFTH DEFENSE
The alleged incident was due solely and entirely to the fault and/or negligence
of the plaintiffs. which fault or negligence consists of the following specific acts. each of
which amounted to either negligence or fault which was the proximate cause of the
incident and of all the damages resulting therefrom:
1. Failing to do what was necessary to avoid the alleged incident;
2. Any and all acts of negligence or fault.
SIXTH DEFENSE
In the alternative. and in the event that this Honorable Court should ffnd that
defendant was guilty of any negligence whatsoever. which proximately caused or
contributed to the incident and damages which defendant denies, then defendant
specifically pleads contributory negligence of the plaintiffs. which would mitigate any
recovery by the plaintiffs.
SEVENTH DEFENSE
Defendant herein expressly pleads the affirmative defense that the plaintiffs
have failed to mitigate their damages.

"
EIGHTH DEFENSE
Defendant avers that it is entitled to a credit and/or setoff from any sums paid to
or on behalf of plaintiffs by defendant or by any other insurer, or by any person or entity,
specifically pleading extinguishment of same or all of any obligation which may be
found due plaintiffs to the full extent of any such payments.
NINTH DEFENSE
Defendant affirmatively asserts the statutory cap on general damages provided
by LSA-R.S. 13:5106.
TENTH DEFENSE
Defendant affirmatively pleads the defense of immunity, as provided by
Louisiana law including. but not limited to, sovereign immunity and the immunity
provided by La. R.S. 9:2798.1. La. R.S. 9:2793.1. La. R.S. 9:2795, La. R.S. 9:2800. and La. R.S.
9:2800.17.
ELEVENTH DEFENSE
Defendant affirmatively pleads the defenses and limit on damages provided in
La. R.S. 5106 and the limit on legal interest provided in La. R.S. 13:5112, as if the statutes
had been copied herein in extenso.
TWELFTH DEFENSE
Defendant asserts the defense of immunity as provided by La. R.S. 9:2798.4.
WHEREFORE, defendant herein, Sewerage and Water Board of New Orleans.
prays that the foregoing Answer, with all affirmative defenses, be deemed good and
sufficient, and that after due proceedings are had, there be judgment herein in favor of
the defendant, Sewerage and Water Board of New Orleans, and against the plaintiffs
dismissing the demands asserted in the Petition for Damages with prejudice at their cost
and any and all general and equitable relief.
Respectfully submitted...
-----
~' ~
,/ '1 -- - -
.H'J(RQLD-D:' MARCHAND, DEPUTY SPEciAL COUNSEL (7543)

_SEWERAGE AND WATER BOARD OF NEW ORLEANS
625 ST. JOSEPH STREET, ROOM 201
NEW ORLEANS, LA 70165
504-585-2236
504-585-2426 (FAX)
GERARD M. VICTOR, SPECIAL COUNSEL
CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing pleading has been served upon all
counsel of record in this matter by depositing same in the United States Mail. postage
prepaid and properly addressed to each on the ~ day of -----'=J;;'----'A::.:""=

....:.:::...r-"--i.~-
I
201 1.
/~~-
HAROJD'D. MA~HAND' DEPUTY SPECIAL COUNSEL
SE~RAG!AND WATER BOARD OF NEW ORLEANS
n:\lit\del\hospitolity ent .. inc\ple\ t 10 1200nsweLdoc

lOll Jr.tl 2 \ P 3: ll2

FILED ON BEHALF OF SEWERAGE AND WATER BOARD OF NE R~~ANS
GOVERNMENT - PAYS NO COURT COSTS -LA. _,5~ r. J 0
CIVIL DISTRICT COURT FOR THE PARISH OF LEANS
STATE OF LOUISIANA
NO. 2010·12413 SECTION 7·E
HOSPITALITY ENTERPRISES, INC., ET AL
VERSUS
WESTCHESTER SURPLUS LINES INSURANCE COMPANY, ET AL
FILED: _ _ _ _ _ _ _ _ _ _ _ 2011
DEPUTY CLERK
•••• ** •• ** •••••••••••••••••••••••••••••••••••••••••••••••••
REQUEST FOR NOTICE
NOW INTO COURT. through undersigned counsel, comes Sewerage and Water
Board of New Orleans who respectfully makes the following request:
I.
Pursuant to Louisiana Code of Civil Procedure Article 1572, Sewerage and Water
Board of New Orleans requests written notice ten (10) days in advance of the date
fixed for the trial or hearing on any exceptions. motions or rules on the merits of the
above captioned matter.
II.
Pursuant to Louisiana Code of Civil Procedure Articles 1913 and 1914, Sewerage
and Water Board requests immediate notice of all interlocutory and final orders and
judgments on any exceptions, motions, or rules on the merits of the above captioned
matter.
WHEREFORE, the premises considered. Sewerage and Water Board requests to
be fumished with the above captioned information.
Respectfully submitted,
-~)
/~ ~
__~~~_/-L/~~=_~__
' __________________________
- ...HiROLE-D. MARCHAND, DEPUTY SPECIAL COUNSEL (7543)
LseWERAGE AND WATER BOARD OF NEW ORLEANS
625 ST. JOSEPH STREET, ROOM 201
NEW ORLEANS, LA 70165
504·585·2236 504·585·2426·FAX
GERARD M. VICTOR, SPECIAL COUNSEL
CERTIFICATE
I hereby certify that a copy of the foregoing pleading has been served upon all
counsel of record by depositing same in United States Mail, postage prepaid and
properly addressed to each on this ~ day of --':::r;=t:{...:....._"-=k::.>~:...;-;'-I_ 2011.
H~6i_D,D?'AAARCHAND, DEPUTY SPECIAL COUNSEL

SewE'RAGE AND WATER BOARD OF NEW ORLEANS
n:\lil\def\hospifolily en!.. inc\ple\ II012Orequestfornolice.doc

HOSPITALITY ENTERPRISES, INC. Et Al v. WESTCHESTER SURPLUS LINES INSURANCE COMPANY Et Al Complaint

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HOSPITALITY ENTERPRISES, INC. Et Al v. WESTCHESTER SURPLUS LINES INSURANCE COMPANY Et Al Complaint

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Case 2:11-cv-00234-EEF-DEK Document 1-1 Filed 02/03/11 Page 1 of 23

NO. (0 - I d L{\3> DIVISION " ~ "/I ;' \l, •, I

WESTCHESTER SURPLUS LINES INSURANCE COMPANY, D E INVESTMENTS,

PETITION FOR DAMAGES

NOW INTO COURT, through undersigned counsel, come Plaintiffs, GARDEN

DISTRICT HOTEL ON ST, CHARLES AVENUE, LLC, a domestic limited liability

Parish of Orleans State of Louisiana who aver as follows'

Made Defendants, jointly and in solido, are:

was, a foreign insurer, authorized to do and doing businesffIN~;~A8'iiLouis.~~a;., 0.00

principal place of business with the Louisiana SecretarY:=~t~~~=:!~=,fu,~J;'Mi~h=9f

Parish 9f Jefferson, State of Louisiana; and

(c) SEWAGE AND WATER BOARD OF NEW ORLEANS, (hereinafter

I A Psrry ,A. Barb~rin . Sr

sued, with its principal place of business in Orleans Parish, Louisiana.

providing coverage to Plaintiffs, under the terms and conditions of which it

Plaintiffs have received inadequate compensation from Westchester, their insurer.

Plaintiffs provided timely notice of the loss. On or about January 7, 2010,

a formal claim was initiated under the subject policy.

Martin to adjust the claim.

determined that there were extensive damages caused by sprinkler leakage.

the purported purpose of doing a formal appraisal of damages. This adjuster

the following week.

Upon information and belief, Westchester's second representative did not

During the inspections, both claims representatives questioned Plaintiffs'

On February 11, 2010 a representative of Westchester telephoned Plaintiffs'

established for Plaintiffs' claim.

communication from Westchester indicating that coverage was disputed.

alarm monitoring before it could make any payment on Plaintiffs' claim.

Plaintiffs' policy provides for a CENTRAL STATION WATER FLOW ALARM.

damages sustained by Plaintiffs.

Plaintiffs' policy contained a Vacancy Permit for which Plaintiff paid an

By virtue of the Vacancy Permit, no exclusions claimed by Westchester applied

to Plaintiffs' claims for water damages from sprinkler leakage.

The sum paid by Westchester was grossly inadequate to compensate Plaintiffs

for losses sustained at the hotel.

Plaintiffs have sustained consequential damages as a result of Westchester's

misconduct. Further, due to Westchester's failure to fulfill its contractual obligations,

as court costs to obtain fair compensation under the policy.

COUNT I. BREACH OF CONTRACT AGAINST WESTCHESTER

paragraphs as if fully set forth herein.

Commercial Property Policy.

Westchester has been arbitrary, capricious, and without probable cause, in

delays allowed of notification of the loss.

times the damages sustained or $5,000.00.

has otherwise denied Plaintiffs the insurance coverage promised by Westchester in a

Further, Westchester has acted without reasonable basis or justification and in

a. It has unreasonably and intentionally refused to pay benefits to which

b. It has unreasonably and intentionally delayed payments to which Plaintiffs

c. It has intentionally failed to conduct a reasonable investigation into the claim

reasonably based on all available information, to reasonably evaluate and

d. It has no reliable knowledge or information upon which to substantiate a

constructive denial of Plaintiffs' claims;

e. The methodology used by Westchester to determine plaintiffs' losses is

contrary and offensive to "public policy" in Louisiana; and

and other construction necessities due to economic conditions in the

geographic location of the Gulf Coast Region following recent catastrophic

events in their property loss calculations, despite coverage provided in the

Commercial Property Policy for "replacement costs."

reasonably evaluate the available information.

committed the following non-exclusive unfair settlement practices enumerated in LRS

(a) Misrepresented pertinent facts or insurance policy provisions relating to

(b) Failed to acknowledge and act reasonably promptly upon communications

with respect to claims arising under insurance policies;