Insurance Fraud NEWS
Suit: Developer inflated value of Missouri building that burned
October 10, 2017, Kansas City, MO
The Philadelphia Indemnity Insurance Co. filed a lawsuit accusing Foutch Brothers LLC and several other companies of a $13 million insurance fraud related to a building that burned in St. Joseph.
Foutch Brothers is the developer on a $39 million project to convert Kemper Arena into a recreational sports complex. The firm is being sued along with KCI Real Estate Partners LLC, Seren Properties Inc. and FBPM LLC.
Philadelphia Indemnity accuses Foutch Brothers and the other companies of misrepresenting aspects of the building as they sought insurance protection. Philadelphia Indemnity said it was told the building at 310 S. Third St. in St. Joseph was worth $150,000 and was 80,000 square feet in size. However, after the fire, the defendants said the building was worth $12.95 million, causing Philadelphia Indemnity to issue payments of $564,205 for the claim before learning about the alleged fraudulent misrepresentation of the building’s value and size, which was actually 98,719 square feet.
Philadelphia Indemnity voided the policy and seeks $298,406, which is the difference between the claim payment made under allegedly false pretenses and the premium payments that Philadelphia Indemnity is obligated to return after voiding the policy. Philadelphia Indemnity also seeks repayment for its costs and attorney fees, and any other relief the court deems proper.
Foutch Brothers and the other defendants haven’t replied to the lawsuit, which was filed Monday in federal court in Kansas City.
Source: Kansas City Business Journal