Class action filed over credit-disability insurance

CHARLESTON - Two policyholders have filed a class action lawsuit against their insurer, alleging they are owed payments under their policy.

Denzil and Cathy Shaw filed a lawsuit Sept. 13 in the Circuit Court of Kanawha County against Beneficial West Virginia Inc. and Household Insurance Co., citing breach of contract, consumer credit and protection act, unfair claims settlement practices act, failure to disclose and first-party insurance bad faith. The case has since been removed to federal court.

The plaintiffs state Beneficial West Virginia sold them a credit-disability insurance policy issued by Household Insurance Co. According to the complaint, the policy states that if either of the plaintiffs become disabled during the mortgage term, their mortgage would be paid for a period up to 180 months.

The plaintiffs state that in October 2009 when Denzil Shaw became permanently disabled, they submitted a claim for benefits and their claim was approved. The Shaws state their mortgage payments were paid through the policy until they received a letter stating the payments would stop in December 2012.

The termination violated the policy, which provided 180 months of payment, according to the complaint.

The plaintiffs are seeking an injunction, statutory penalties, actual and compensatory damages, punitive damages, attorney fees and costs and pre and post judgment interest. The plaintiffs are being represented in the case by attorneys John W. Barrett, Jonathan R. Marshall and Maryl C. Sattler of Bailey & Glasser LLP.

The case was removed to U.S. District Court for the Southern District of West Virginia on Nov. 8.

The removal notice says the complaint seeks more than $20 million in damages, and that the federal court has jurisdiction over the case pursuant to the Class Action Fairness Act.

Circuit Court of Kanawha County Case No. 13-C-1748
U.S. District Court for the Southern District of West Virginia Case No. 2:13-cv-28470