Danny and Tammy Cox vs. Automobile Insurance Company

It’s been more than a year now that Danny and Tammy Cox have sat at their table, watered the flowers in the yard or simply chilled out in their favorite sitting spot.

It’s been more than a year that their home caught fire and burned, leaving a blackened, charred shell.

Now, the Coxes are suing their insurance company, who says the home wasn’t totally destroyed and could be remodeled.

Danny and Tammy Cox disagree.

Their attorney, Scott Davidson of Davidson Law Firm of Batesville, filed a “bad faith” and breach of insurance contract lawsuit against the Automobile Insurance Company of Hartford, Conn., saying it “has broken its promise” to them. Their mortgage holder, Citibank, required the owners to carry and pay for homeowners insurance on their home, and the Coxes ended up paying “thousands of dollars in insurance premiums” to the insurance company, referred to as “Hartford” in the lawsuit.

The Coxes’ home at 990 College St. caught fire on Nov. 11, 2011 from flammable solvents that “were being used by workers who were doing a construction project on a part of the house,” the lawsuit states, going on to add that the house was gutted and was a total loss.

The Coxes are also being represented by Sach Oliver, trial lawyer with Oliver Law Firm in Rogers.

The Coxes bought the College Street home in 1998. Since the fire, they have been living in their cabin located outside of Cushman.

Though the cabin is smaller than what they are used to, they do feel blessed they’d built it. “If they didn’t have that, they would be in a real bind,” Oliver said.

The couple are empty nesters and had discussed selling the College Street house and downsizing.

“They hadn’t gotten to that point yet but that was their long-term goal,” Oliver continued.

But even more than being out of their home for a year and a half now, Oliver said, “The worst part is going through this process, paying premiums for years … and now the insurance company doesn’t want to pay.

“They are having to deal with this by no fault of their own. … They feel awful about that eyesore — they are doing everything they can to get this moved.”

The insurance company — which lists assets on its website in the billions of dollars — is “dragging out, I call it doomsday, where they have to pay.”

Meanwhile, the Coxes have worked with the city to put safety measures, Oliver said, adding, “They don’t want any children to get hurt. … That thing looks like it could collapse at any time, it’s unsafe and it’s an eyesore.”

The lawsuit states that at the time of the loss, Arkansas homeowners, including the Coxes, were protected by a “‘Valued Policy Law,’ which provided that when a house is a total loss, an insurance company is required to pay the full amount stated in the policy or the full amount upon which the company charges, collects, or receives a premium.” Hartford refused.

The Coxes are seeking judgement for the loss, valued at $318,903, as well as attorney’s fees.

Furthermore, at the time of the fire the Coxes were renting a portion of their house to Brad and Paige Barham for $500 a month. “Following the fire the portion of the house that was being rented was not fit to live in,” the suit states, so the Coxes feel they are entitled to the loss of the use and fair rental damages under the policy amount of $500 a month since the date of the fire, up to the policy limit of $31,900.

Under Arkansas law, the suit states, the Coxes are entitled to recover an additional 12 percent upon the amount of loss.

The lawsuit also states that Hartford:

• violated the law by attempting to invoke language that had been deleted from the Coxes’ original policy.
• tried to collect premiums on property destroyed by fire and turned the Coxes over to collections when they refused to pay.
• ignored proof that the house was a total loss and refused to consider whether it would be more cost-effective to tear down and rebuild the house rather than attempt repairs.
• misrepresented facts of insurance policy revisions relating to coverage in violation of the law.
• engaged in unfair claims practices by refusing to pay claims without conducting a reasonable investigation based upon all available information.
• did not attempt in good faith to settle claims “in which liability has become reasonably clear” in a prompt, fair and equitable manner.
• dealt dishonestly with the Coxes in the valuation of loss.
• failed to provide requested documents necessary to make bad claims.
• failed to hire competent employees, agents, adjusters and/or staff, and failed to properly train and supervise them.
• put in place personnel policies and procedures, compensation programs and bonus incentive programs for its claims employees based on improper goals.
• failed to keep its policies and procedures up to industry standards. “Instead, for the purposes of increasing profits, Defendant Hartford and its parent companies put in place claims manuals, systems operating manuals, agents’ manuals, and training manuals and materials designed to oppress and teach unfair claims practices in order to increase profits,” the suit states.

Because Hartford “intentionally and maliciously pursued a course of conduct in bad faith for the purpose of avoiding liability for a claim properly owed the plaintiffs,” the Coxes are seeking punitive damages as well.

Hartford denies the allegations.

A jury trial is sought and is tentatively scheduled for federal court in Batesville, beginning Nov. 4.

“I think they’re very frustrated. They feel cheated — it’s not just a house they lost but a home of memories, where their children played on Christmas morning, photographs on the wall, where they had some of their favorite memories, taken from them. Then to have this fight, it’s made it a very frustrating, unfair situation,” Oliver said.

“It’s one of the reasons why the Coxes feel it is necessary to move forward with litigation. They feel if big insurance can do it to them, they can do it to anyone and they don’t want that to happen.”