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Homebuilder Takes on Three Insurers

DALLAS (CN) - Modular homebuilder Palm Harbor Homes sued three insurers for refusing to defend or indemnify it in lawsuits from 15 unhappy homeowners in Nevada.

The Dallas-based company sued Chartis Claims, American International Group, and American Home Assurance Co., in Dallas County Court.

Palm Harbor claims AIG issued a commercial general liability insurance policy for another Palm Harbor Homes entity incorporated in Florida, for Aug. 1, 2004 to Aug. 1, 2005.

That entity filed for Chapter 11 bankruptcy protection in 2010 and the plaintiff purchased its assets in 2011.

Palm Harbor says the homeowners bought their homes from the Florida entity and filed three lawsuits against it, in 2005 and 2006.

Palm Harbor notified AIG that eight of the plaintiffs had bought their homes during the term of the policy.

But Palm Harbor says it had to defend itself and pay its own defense costs for almost 5 years before the suits were settled in 2010.

"Palm Harbor demanded that defendants immediately assume payment of ongoing defense costs and reimburse Palm Harbor for the amounts Palm Harbor had already paid over and above the self-insured retention amount," the complaint states. "Defendants never denied coverage of the plaintiffs' claims in the underlying lawsuit under the policy, however, defendants never assumed payment of Palm Harbor's defense costs."

Palm Harbor claims the defendants refused to pay after a March 2010 demand and again after a demand in August this year.

Palm Harbor is one of the nation's largest marketers of factory-built homes, including those for workforce housing, hospitality, medical, retail, office and dormitories, according to its website.

It seeks actual and punitive damages for bad faith, breach of faith and fair dealing, breach of contract and failure to promptly pay claims.

It is represented by Michael Craddock with Craddock Davis of Dallas.


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