River West files $58 million suit against insurance company

River West Medical Center in Plaquemine filed a $58 million lawsuit in federal district court this morning against its insurance company, American Guarantee & Liability Insurance Co., for failing to pay claims after Hurricane Gustav last year. In the lawsuit, the hospital alleges it was forced to file for bankruptcy earlier this year because American Guarantee failed to cover, in a timely manner, more than $3.3 million worth of damage to the hospital caused by a tornado, as well as more than $5 million in lost business income. The bankruptcy filing led a judge to shut River West down in May, putting 90 people out of work. Though the insurance company ultimately paid $2.7 million to the hospital, the lawsuit argues that the payment fell fall short of the $8.3 million that was owed. As a result, the hospital is now seeking $20 million in damages and another $38 million in penalties. “River West did what it was supposed to do and immediately notified American Guarantee of the damage and gave American Guarantee everything they needed to pay their claim,” says Patrick Broyles, whose firm Moore Thompson Lee and Broyles represents the hospital. “Unfortunately, American Guarantee refused to pay what it owed under the policy, ultimately driving River West out of business.” A spokesman for Zurich Holding Co., American Guarantee’s parent company, says he could not comment on pending litigation.—Stephanie Riegel