HUNTINGTON – An insurance company is suing Hess, Stewart & Campbell, claiming the accounting firm isn’t due the amount it says it is under a policy.
The action involves a dispute as to the extent of any obligation owed by CAMICO Mutual Insurance Company concerning the liability of HSC arising from, related to, or in connection with a criminal scheme perpetrated by an HSC employee for which criminal prosecution is currently pending, according to a complaint filed March 11 in the U.S. District Court for the Southern District of West Virginia.
CAMICO claims HSC was engaged to handle check writing, bookkeeping, accounting and tax related matters and the Jane Doe employee was assigned and directed by HSC to manage those activities for trusts and businesses.
On Oct. 8, HSC was notified by counsel representing the estate of a client that discrepancies in a checking account had been discovered by the decedent’s daughter following her September death, according to the suit.
CAMICO claims HSC began an investigation and determined that Doe had misappropriated assets of the individual and the revocable trust.
By correspondence dated Dec. 11, from counsel for the executrix of the estate of the client and its revocable trust, it is alleged that as part of the criminal scheme, Doe misappropriated funds from the revocable trust, made unauthorized charges to personal credit cards and failed to ensure that tax returns were filed and taxes timely paid, resulting in tax liens, late fees, penalties and interest in excess of $21,435 to the individual and the revocable trust.
CAMICO claims by the same correspondence it is alleged that HSC was paid more than $132,726 since the beginning of 2010, comprising largely of fees attributable to the criminal scheme perpetrated by Doe.
Notice concerning HSC’s potential liability was first reported in October to CAMICO and the insurance company accepted HSC’s notice of potential claim and issued a reservation of rights, according to the suit.
CAMICO claims under its policy with HSC, the limit of liability is only $100,000 for both damages and claim expenses.
The insurance company has advised HSC that it only owes under the policy a single $100,000 sub-limit of liability, which HSC disputes, according to the suit.
CAMICO is seeking for the court to determine and declare the rights and obligations of CAMICO and HSC and to determine and declare that CAMICO owes no defense or indemnity obligation. It is being represented by Susan R. Snowden and Kit Mathers of Martin & Seibert LC.
Earlier this year, Kimberly Dawn Price of Huntington was charged with 953 criminal counts accusing her of embezzling more than $1 million from at least one client's account over a five-year period, according to criminal complaints filed by the West Virginia State Police.
Price, 57, was a staff accountant at Hess, Stewart and Campbell. She was in January on 302 counts of embezzlement, 326 counts of forgery, and 325 counts of uttering at Cabell Count Magistrate Court. She was directly in charge of the account of Elizabeth Caldwell, a Huntington woman who died in the fall of 2015.
U.S. District Court for the Southern District of West Virginia case number: 3:16-cv-02357