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Home New Cases City Line Behavioral Healthcare Trustee Sues Great American Insurance Company For Alleged Breach of Contract & Bad Faith Insurance Practices, Seeks $5M as Damages

City Line Behavioral Healthcare Trustee Sues Great American Insurance Company For Alleged Breach of Contract & Bad Faith Insurance Practices, Seeks $5M as Damages

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May 10, 2021, Eastern District of Pennsylvania – Trustee Gary F. Seitz for City Line Behavioral Healthcare, LLC recently brought a complaint against Great American Insurance Company (“GAIC”) seeking a declaratory judgment and damages for breach of contract and bad faith insurance practices.

The case relates to the director’s and officer’s coverage under an insurance policy that GAIC issued to City Line Behavioral Healthcare, LLC, formerly known as Liberation Behavioral Health, LLC. ( the “Company”).

The Trustee alleges that GAIC policy constituted a contract binding both the Company and GAIC and the Company supposedly performed and satisfied all of the terms, conditions, covenants, and obligations imposed on and required of it under the terms of the GAIC policy or by law. Despite that, GAIC allegedly breached its obligations under the GAIC policy by, inter alia, delaying and refusing to provide coverage and pay for covered losses under the GAIC Policy.

Accordingly, the Trustee contends that as a direct and proximate result of GAIC’s breach of contract, the Company has been deprived of the benefit of insurance coverage under the GAIC policy for which the Company paid substantial premiums, and incurred and continues to incur significant damages. Adding further, the Trustee alleges that GAIC failed or refused to discharge its responsibilities and obligations under the GAIC policy and in a manner consistent with the Company’s rights and breached the contract between the parties.

Through its complaint, the Trustee demands judgment in its favor and against GAIC for compensatory damages in an amount to be proven at trial, plus interest and costs, punitive damages, attorneys’ fees, and such other relief as the Court may deem appropriate and proper under the circumstances. The Trustee also seeks declaratory relief and a judicial determination so that the parties may ascertain their rights, duties, and obligations under the insurance policy, in order to terminate the existing controversy among the parties.

The case is In re City Line Behavioural Healthcare, LLC in the United States Bankruptcy Court for Eastern District of Pennsylvania, Case 21-00038-mdc

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