Mold Bad Faith Action - and Leigh Blum vs. Chubb Custom Insurance Co

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January 10, 2001

Texas Homeowners Reach $1.5 Million Settlement For Mold-Related Damages

CORPUS CHRISTI, Texas --Texas homeowners reached a $1.5 million settlement

on Dec. 18 with their homeowners insurer in a mold bad faith action.

Subsequently, a Texas jury found on Dec. 20 that no coverage exists under a

windstorm policy for mold damage ( Blum, et al. v. Chubb Custom

Insurance Co., et al., No. 99-3563-E, Texas Dist., Nueces Co.).

(Settlement Agreement, Jury Questions, Plaintiffs' Original Petition, and

Jury Notes. Document #42-010110-009.)

and Leigh Blum sued Chubb Custom Insurance Co., Chubb Group of

Insurance Companies and Texas Windstorm Insurance Association (TWIA) in the

Texas District Court for Nueces County. Blum obtained a homeowners policy

from Chubb and a windstorm policy from TWIA.

During the policy period, the Blums sustained losses in the form of

accidental plumbing leaks and roof damage, which damaged the architectural

finishes of the home. After inspecting the home, the carriers denied,

delayed or failed to pay or properly investigate the covered claims,

according to plaintiffs' petition.

After 2-1/2 weeks of trial, Chubb agreed to settle with the Blums for $1.5

million. Subsequently, District Judge Rose Vela noted in the charge of the

court that after settling with the Blums, the claims against Chub and TWIA

were dismissed. Chubb then assumed the role of the plaintiff, continuing to

prosecute claims it believed it had against TWIA as a result of its

settlement payment.

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