Refugio County Commissioners Court

Refugio County Judge Robert Blaschke speaks with a member of the public during a Refugio County commissioners’ meeting in September.

REFUGIO – The Texas Association of Counties is asserting Refugio County’s lawsuit, which states its claim from losses caused by Hurricane Harvey was improperly handled, has no grounds.

Refugio County is suing the Texas Association of Counties for $1 million for failing to properly handle its claim from losses caused by the storm. The association’s risk management pool provides counties with a “stable, sustainable resource of protection against risks and liabilities,” according to its website.

The association filed a response to the lawsuit last week, stating it “generally denies” the county’s allegations and “demands that it proves its allegations by a preponderance of the credible evidence.”

After Harvey hit Aug. 25, 2017, Refugio County contacted the Texas Association of Counties to file a claim on its insurance policy. The association’s response said that Aug. 28, 2017, it agreed to start making payments to the emergency responders in Refugio, and the first advance payment was issued two days later.

However, Refugio County said in the lawsuit, the association “improperly denied and/or underpaid Refugio County’s claim.”

The adjusters assigned to the claim, the lawsuit states, “conducted a substandard investigation and inspection of the properties, prepared reports that failed to include all of the damages that were observed during the inspections and undervalued the damages observed during the inspections.”

Refugio County paid $893,047.36 to the Virtus Group after, like Victoria County, bypassing bidding laws and entering into a contract with the Virtus Group that is almost identical to the contract Victoria signed. The Virtus Group is the out-of-state company at the center of a controversy over whether Victoria County spent Harvey recovery money in taxpayers’ interests.

According to the association’s response, the risk management pool is “not liable to the county for damages or losses resulting from the county’s failure to mitigate or its failure to take all reasonable steps to protect the property from further damage after a loss was sustained.”

To date, the association’s answer said, the pool has paid $3,864,634.45 on behalf of the county.

In its response, the association wrote the county has “not complied with several of the required conditions precedent to any waiver of the pool’s immunity from suit and any right of the county to sue the pool.” The required conditions, it explains, include submitting a timely and contractually compliant sworn proof of loss within 90 days of the alleged Aug. 25, 2017, loss; participating in a one-day pre-suit mediation in Travis County; and filing any suit against the pool in the district court of Travis County.

Because the county did not comply with the conditions, it says, the risk management pool remains “immune” from the county’s claims.

When reached by phone, Refugio County Judge Robert Blaschke said he did not want to comment on the lawsuit or the association’s response. Instead, he referred the Advocate to Arnold & Itkin, the law firm overseeing the county’s case.

Representatives from Arnold & Itkin did not respond to the Advocate’s questions before the publication of this story.

In its response, the association wrote that in the two years since Harvey, the risk management pool had multiple meetings and inspections with Refugio County in efforts to resolve the claims. In the last year, the pool held six on-site meetings with the county, continuing to try to help resolve the matter, it said.

At the meetings, the response said, the county was provided a copy of the claim financials and a status update of pending and required items as part of its duties and responsibilities to the claim. The federal government was also involved in some of those meetings.

Further, the association’s response explains that the risk management pool is a “governmental unit” and not an insurance company, which means it is not governed by the Texas Insurance Code. Moreover, government immunity protects government entities from suits for damages absent legislative content, it said.

When asked for comment, the Texas Association of Counties’ media relations officer said “pending litigation prevents comment.”

A hearing date has not yet been filed.

Morgan Theophil covers local government for the Victoria Advocate. She can be reached at 361-580-6511, mtheophil@vicad.com or on Twitter

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