Residential Developer Sues Its Insurer

DALLAS (CN) - A residential real estate developer wants a Texas state court to force an insurer to defend and indemnify it in a housing discrimination lawsuit brought by the New York attorney general.

The dispute stems from an April 2010 federal complaint New York Attorney General Andrew Cuomo filed against Trammel Crow Residential, TCR Northeast Properties and Yaphank Apartments.

Cuomo alleged violations of the Fair Housing Act and Americans with Disabilities Act at Atlantic Point Apartments development in Bellport, N.Y. The state said the companies designed, built and managed the 795-unit apartment complex in a manner that denied access to the disabled.

An April 2011 settlement and consent decree in the case required one or more of the companies to pay personal injury damages.

After Virginia Surety denied any indemnification duty in September 2011, through its administrator Resolute Manageent Inc., Trammel Crow Residential, TCR Northeast and Yaphank Apartments filed suit.

The companies say they were insured under a personal and advertising injury policy in place from 2002 to 2003.

"The policy requires Virginia Surety to defend any suit seeking, among other things, damages because of 'personal injury,' which is defined to include discrimination because of physical disability," according To the complaint in Dallas County Court.

"Defense costs do not erode the policy's $250,000 limit."

Trammell Crow Residential claims the conduct took place during the period of Virginia Surety's policy and that it was timely provided notice of the suit. It claims no exclusions exist that prevent the insurer from providing defense or indemnification.

"Despite acknowledging a duty to defend the TCR parties, Virginia Surety and Resolute Management have knowingly delayed and/or failed to pay the TCR parties' defense costs in connection" with the lawsuit, the complaint states.

"One or more of the TCR parties have sustained substantial damages and attorneys' fees incurred in pursuit of its claims under the policy."

Trammell Crow Residential, a Delaware company that operates principally out of Texas, describes itself as a multifamily rental and condominium developer. It is not affiliated with CBRE Group subsidiary Trammell Crow Co., a multibillion-dollar Dallas-based developor.

Trammell Crow Residential seek actual and punitive damages for breach of contract and violations of the Texas Insurance Code. It is represented by Ernest Martin with Haynes Boone of Dallas.

Editor's Note: This article has been edited to correct the reference to plaintiff Trammell Crow Residential. An earlier version of the article incorrectly identified the party as CBRE subsidiary Trammell Crow Co. New York Attorney General Cuomo did not sue Trammell Crow Co. Courthouse News regrets the error.

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