Fidelity removes BISD’s stolen money suit to federal court

Originally published by David Yates.

The Beaumont Independent School District had a suit alleging its insurance company refused to reimburse the district for losses allegedly sustained from an employee theft transferred to federal court.

Last year, BISD filed a breach of contract suit against Fidelity and Deposit Company of Maryland in Jefferson County District Court.

Court records show that on Nov. 14 F&D filed a notice of removal in the case, stating the matter had been transferred to the U.S. District Court for Eastern Texas.

According to the complaint, on March 17, 2010, defendant Fidelity and Deposit, through its local recording agent Talon Insurance Agency, issued a government crime policy to the plaintiff, insuring BISD against employee theft, among other things, up to $500,000, through March 1, 2013. BISD says that on May 25, 2012, it was discovered that the district had sustained a loss of $282,346 in theft by an employee between July 10, 2009, and May 13, 2012.

BISD asserts it is entitled to recover the loss minus the $5,000 deductible from the defendant, or $277,346, but the defendant denied liability in August.

The defendant is accused of breach of insurance contract, violating the prompt payment requirements of the Texas Insurance Code, unfair settlement practices, breach of duty of good faith and fair dealing and gross negligence.

BISD seeks more than $1 million in damages, including the more than $270,000 owed and exemplary damages, plus interest, costs of suit and attorney fees.

Attorneys Boyd Wells and Bruce M. Partain of Wells, Peyton, Greenberg and Hunt in Beaumont represent it.

Case No. E196-247

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