Montgomery, ALCustomers of home warranty companies, such as American Home Shield can take heart that some previous home warranty lawsuits have resulted in settlements. One American Home Shield lawsuit resulted in a settlement, although the company did not admit any wrongdoing or liability in the settlement.
The settlement was the result of a class-action lawsuit filed by Laura and Steven Faught against American Home Shield on behalf of people in the US who purchased or were issued a home service contract from American Home Shield from July 24, 2001 through October 19, 2009. As part of the settlement, American Home Shield agreed to establish a review desk to consider claims from settlement class members whose claims were denied during the class period.
The Faught lawsuit alleged that American Home Shield "engaged in a pattern and practice of failing to fulfill its contractual obligations to its customers, including by declining generally to provide repair and replacement service to which its customers were entitled, and by improperly denying claims in the first year of customers' home service contracts for lack of maintenance" (from the Notice of Class Action and Settlement; www.faughtclassaction.com).
Despite entering into a settlement, American Home Shield denied any wrongdoing or any liability.
That denial of wrongdoing has not prevented a different lawsuit, also alleging American Home Shield failed to pay its customers' claims, from being filed. The lawsuit, filed by Bridgette and William Guadet, was filed on June 23, 2011, according to The Louisiana Record (06/30/11), and alleges American Home Shield denied claims made by class members under grounds of "'lack of maintenance,' 'pre-existing condition,' or 'failure to clean,' despite not inspecting the appliances when policies are issued."
Furthermore, the lawsuit alleges, American Home Shield denies claims because of minimal uncleanness, even if outside factors were the cause of the appliance's breakdown. Plaintiffs allege contractors were given a bonus for denying legitimate claims. The lawsuit claims breach of contract and fraudulent misrepresentation. Plaintiffs seek damages in excess of $75,000.
Meanwhile, customers of other home warranty companies have filed lawsuits of their own or may be investigating possible lawsuits, alleging their claims were improperly denied.
If you or a loved one have suffered losses in this case, please click the link below and your complaint will be sent to an insurance lawyer who may evaluate your bad faith insurance claim at no cost or obligation.