Guam Surgicenter sues insurer over claims

Guam Surgicenter has filed suit in the Superior Court of Guam against its insurer and the insurer's representatives over their alleged failure to pay claims related to Typhoon Mawar.

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Guam Surgicenter has filed suit in the Superior Court of Guam against its insurer and the insurer's representatives over their alleged failure to pay claims related to Typhoon Mawar. The plaintiffs in the case are Guam Surgicenter LLC; Island Cancer Center, a fictitious name for Guam Surgicenter; and AC Micro Guam LLC. All of them collectively are called Guam Surgicenter in the complaint or, simply, the plaintiffs.

The defendants include DB Insurance Co. Ltd.; Moylan's Insurance Underwriters Inc.



, which the complaint identifies as an authorized agent for DB Insurance; and Equitable Adjusting and Service Company, or EASCO, a member of the Moylan's family of companies, according to its website. According to the complaint, Guam Surgicenter has been purchasing insurance products from DB Insurance through Moylan's since 2001, and, in 2021, purchased a comprehensive insurance policy by extending a current policy via an endorsement, to include tidal wave, flood, highwater and overflow coverage. Guam Surgicenter was looking for a policy that would cover typhoon- and flooding-related losses, and that's what Moylan's represented the DB Insurance policy to be, according to the complaint.

But the complaint alleged that Moylan's misled Guam Surgicenter by withholding information about a limitation on the flood coverage. The policy limited coverage by defining tidal wave, flood, highwater and overflow as "the rising of navigable water," the complaint added. Typhoon Mawar struck Guam in May 2023.

The Category 4 storm uprooted trees, ripped apart traffic lights, tore the roofing from houses and, according to the complaint, caused "great damage" to Guam Surgicenter's premises and property. The complaint stated that the typhoon caused a rise of navigable waters that damaged Guam Surgicenter's property, and that its insurance coverage does not exclude the rise of navigable waters due to a typhoon. "Typhoons occurring in Guam can lift significant amounts of seawater and dump that seawater onto contiguous land.

The rise of these navigable waters, whether pushed onto the shore or released with the rain, was the cause of flooding in and around Guam Surgicenter's premises and property, and resulting damage," the complaint stated. Guam Surgicenter submitted an insurance claim, but in December 2023, EASCO, on behalf of DB Insurance and Moylan's, denied the claim "based on limited interactions and disregarding reports provided by Guam Surgicenter," the complaint stated. Guam Surgicenter notified the defendants in September that it intended to seek damages under Guam's Deceptive Trade Practices Act.

The notice estimated Guam Surgicenter's covered damages, not including interest and attorney's fees, for machinery and equipment, furniture and supplies, leasehold improvements and business interruption. These totaled about $3.2 million.

The complaint raised six causes of action, including negligent misrepresentation, alleging that Moylan's misrepresented the insurance policy to Guam Surgicenter and that DB Insurance is liable for the acts and omissions of its agent. The plaintiffs are seeking compensatory and consequential damages in an amount to be proven at trial, as well as punitive damages for the alleged "tortious bad faith actions" of the defendants. Timeliness of insurance companies As a general matter regarding Mawar-related claims, it appears complaints have been made about the timeliness of insurance payments made on such claims.

The Guam Banking and Insurance Board very briefly discussed that issue during its Aug. 1 meeting, although no specific companies were named or complaint details were provided. "The only other complaints I've received is that, after Mawar, insurance companies are taking their time paying the claims.

So, that's the only other complaint, and I'm not even sure that that was received officially," Banking and Insurance Commissioner Michelle Santos said during the meeting..