RLI Insurance seeks reimbursement on claims paid, costs of suit

By Andrea Dearden | Jul 8, 2013

A Peoria insurance company wants to be reimbursed for claims against one of its customers, a recently closed Highland construction company.

RLI Insurance Company filed a lawsuit June 17 in Madison County Circuit Court against Gateway Environmental Service Inc., Dannette S. Sutton, Ronald R. Sutton, Brian T. Wellen and Heidi Jo Wellen.

According to the complaint, RLI Insurance had an Agreement of Indemnity with Gateway and its owners that was executed in March 2010. The agreement allegedly specified that RLI Insurance would not be liable for losses and would be reimbursed by the defendants should they occur.

After issuing and delivering three out-of-state contracts and payment bonds for Gateway, RLI Insurance alleges it received several claims against the bonds from Gateway's subcontractors or suppliers who said they were not paid. Those claims totaled more than $345,000, according to the insurance company.

RLI says it hired attorneys to investigate the claims and made payments of more than $185,000 to the claimants. After receiving contract funds, RLI Insurance claims it still lost more than $91,000. Including the nearly $70,000 it paid for legal services, the company contends expenses totaled nearly $160,000.

RLI Insurance alleges the defendants have yet to reimburse the company, despite being asked to do so. RLI Insurance says Gateway and its owners have breached the Indemnity Agreement and ask to be awarded the almost $160,000 it claims it is owed, plus costs of the lawsuit.

Attorneys Steven H. Elizer and Philip M. Novak of Northbrook represent RLI Insurance.

Madison County Circuit Court Case No. 13-L-1004

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