Rehkemper and Sons sues over denied work comp case

By Kelly Holleran | Sep 3, 2009

A company says its insurance provider refuses to pay an employee for his work-related injury and has denied the company's request to defend it against the employee's workers' compensation claim.

Rehkemper and Sons filed a lawsuit Aug. 28 in St. Clair County Circuit Court against Indiana Lumbermens Mutual Insurance Company.

On Aug. 8, 2005, a Rehkemper employee, Michael Gray, was injured in a work-related accident, according to the complaint.

At the time of Gray's accident, Rehkemper claims it had an insurance policy that provides for $500,000 in coverage for bodily injury per accident. In addition, the policy creates a right of Rehkemper to secure Indiana Lumbermens to defend Rehkemper against claims covered by the policy.

After his accident, Gray filed a claim with Illinois workers' compensation, alleging injuries to his neck, back and arms, the suit states.

Gray's claim is currently pending before the Illinois Workers' Compensation Commission, the complaint says.

Meanwhile, Rehkemper claims it investigated Gray's claim to determine whether it would surmount to the $500,000 aggregate deductible covered in its insurance policy with Indiana Lumbermens.

On July 2, Rehkemper tendered the defense of Michael Gray's claim to Indiana Lumbermens under its policy, according to the complaint.

On Aug. 21, Indiana Lumbermens sent Rehkemper a letter indicating it was denying coverage of Michael Gray's claim, the suit states.

Despite alleged promises made under the insurance policy, Indiana Lumbermens also refuses to defend and indemnify Rehkemper in Michael Gray's claim, the complaint says.

"Defendant benefitted from any delay by the fact that plaintiff independently hired competent defense counsel at its own expense, protecting defendant's interests and sparing defendant litigation costs to date," the suit states.

In the two-count suit, Rehkemper is asking the court to find Indiana Lumbermens in breach of insurance policy and to require Indiana Lumbermens to defend and indemnify Rehkemper from workers' compensation claims made by Michael Gray. It is also seeking attorney's fees, the maximum penalty allowed under Illinois law and other relief the court deems just.

Lawrence L. Pratt and Reno R. Cova III of Evans and Dixon in St. Louis will be representing it.

St. Clair County Circuit Court case number: 09-L-457.

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