
How to Make an Insurance Company Take Responsibility
Refusing to Fold Under an Insurance Company’s
Aggressive Litigation Tactics Leads to Large Settlement
The Challenge
Helped clients recover the value of their lost property after a neighbor damaged the city’s underground storm water system, flooding the clients’ home, and no responsible parties would take responsibility.
The Solution
We held all parties accountable for their part in negligently damaging the home and brought claims against the insurance company for refusing to pay out the policy without conducting a reasonable investigation.
The Result
Clients received a combined six-figure settlement from all three defendants to compensate for the clients’ loss, to punish the insurance company for its bad behavior, and to send a message that insurance companies must treat all claims fairly and with diligence.
Leanna* owned the home she shared with her husband and mother in North Carolina. Just across the street from Leanna’s home, Madeline lived with her son, Greg, until her death. Though their houses were separated by a residential street, an underground drainage system connected the two properties. Running underneath several homes in the area, including Madeline’s property, the system was originally designed to ensure any extra surface water on Leanna’s property would be properly drained to a culvert on a neighboring street. The drainage system, which is maintained by the City, features two drains on Leanna’s property, a stormwater drain in the backyard and a drain in the basement of her home.
In 2013, a sinkhole developed in front of Madeline’s yard. Madeline and her son hired a contractor to fill the dangerous sinkhole. Under Greg’s supervision, the contractor attempted to plug the hole in with dirt and gravel. Shortly after this attempted fix, the sinkhole developed again. Greg directed his work crews to fill the hole with broken up pieces of the sidewalk that was in front of the property. During this process, the material used to fill the sinkhole clogged the subterranean drain. Because the pipe beneath Madeline’s home was clogged, on December 29, 2013, five and a half feet of water discharged into the basement of Leanna’s home. In this process, the furnace, water heater, and valuable personal property of Leanna’s mother were damaged and destroyed beyond repair. A few months later, on March 7, 2014, another four feet of water backed up into Leanna’s basement further damaging her home. The repeated water damage led to structural and extensive mold damage.

A few weeks after the initial flooding, Leanna filed a timely claim under her homeowner’s insurance policy with Insurance-R-us. Six days after she filed the claim, a claims adjuster came out to her home to assess the damage to her property and investigate its cause. While on the property, the claims adjuster discussed what had happened with Leanna, took some photos of the damage, and quickly assumed the water had entered the basement through the drain on the basement floor. After making this determination, the claims adjuster informed Leanna that her policy would not cover the damage because her policy had an explicit exception for water damage caused by surface water. A few days later, Insurance-R-us sent a formal letter further explaining that the damage to her basement would not be covered. After receiving this notice, Leanna paid for the repairs to her home and replaced as much of the personal property as she could.
Though Insurance-R-us characterized its denial of Leanna’s claim as very straightforward, the language of the policy about what types of water damage would be covered was extremely confusing. The policy distinguished between types of water, events that would create flooding, and types of drainage systems. Some types of water, flooding events, or drainage systems were covered under the policy, while others were not. The policy also had exceptions to the exclusions based on other facts of the event that caused water damage. Feeling as though Insurance-R-us oversimplified the policy and overlooked coverage for her damage, Leanna spent several months working with a lawyer to bring a claim. However, the lawyer failed to move her case forward, and Leanna scrambled to find other representation. Nearing the statute of limitations for her claims, Leanna reached out to the JC White Law Group in a final attempt to bring her case.

The Legal Claims
Moved by Leanna’s story, Jim White filed a complaint on behalf of Leanna and her mother against the City, the late Madeline’s estate, and Greg under negligence theories and asked the court to mandate Insurance-R-us payout Leanna’s homeowners’ policy. At first, the dispute seemed like a straightforward negligence case. However, the JC White Law Group quickly discovered that Insurance-R-us was engaging in unfair settlement practices and later amended the claims to include these allegations. By bringing the negligence, declaratory judgment, and unfair settlement practices claims, the JC White Law Group sought to hold all actors responsible for their contribution to Leanna’s harm and send a message to Insurance-R-us that they are legally required to treat all insurance claims with diligence.
Reaching a Settlement
Insurance-R-us contested the court’s ruling and further drug out the pre-trial process. Despite its best efforts, a trial date was set for April 2019. A few weeks after the trial date was set, Insurance-R-us finally agreed to settle the claim out of court. As soon as it became clear that Leanna and the JC White Law Group were not going away and were not afraid of trial, they quickly offered Leanna a large six-figure settlement.
The Impact
After six long years, Leanna’s claims were finally resolved. Ultimately, she received the value of her lost property in her initial settlement with the City, Madeline’s estate, and Greg. The JC White Law Group purposefully filed claims against all of these actors to ensure they each were responsible for their share of Leanna’s harm. Leanna also received a large settlement to punish Insurance-R-us for its unfair behavior in handling her policy. This sent a message to Insurance-R-us that it must treat all claims fairly, reasonably, and with diligence. Insurance companies are designed to help customers in their time of need. The law will not allow them to purposefully engage in incomplete investigations in order to avoid paying out a policy.
* Names have been changed to protect confidentiality, but the results are real.
Case studies do not represent this law firm’s or our lawyers’ entire records. Each case is unique and factors outside the control of attorneys and clients can produce very different results . This case study is not intended as a guarantee that the same or similar results can be obtained in every matter and you should not assume that a similar result can be obtained for you.
This post was co-written with Mallory Miller, JD.
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