Lafayette insurance scandal leads to new lawsuit

By Patsy R. Brumfield/NEMS Daily Journal

OXFORD – Total Plan Services Inc. of Texas has sued Trustmark Life Insurance Co. of Illinois, which TPS claims intentionally failed to protect it against claims by Lafayette County.
Last week, Chief U.S. District Judge Michael P. Mills ruled in TPS’ favor in a 2007 lawsuit by Lafayette County, which sought to get back allegedly illegal profits made during a health insurance scandal. Just days before, the county settled with Trustmark.
Mills will preside over the new lawsuit.
Even though settlement details were not disclosed, TPS says in its new complaint that Lafayette County offered to settle with TPS for $62,000 or less than one-third Trustmark’s settlement amount.
TPS was the third-party administrator of Lafayette County’s health insurance through Trustmark.
In its new action, TPS said Trustmark denied TPS was protected against lawsuits despite a contract provision for certain acts it carried out at Trustmark’s direction.
Chiefly, TPS alleges that Trustmark’s decision forced it to hire its own legal counsel and rack up sizable attorneys’ fees.
TPS accuses Trustmark of breach of contract, in which Trustmark agreed to hold TPS harmless for anything that wasn’t TPS’sfault, for tortious breach of contract, saying Trustmark intended to deny TPS’ request for defense and protection, and for bad faith denial of indemnification.
Total Plan asks for punitive damages, as well as attorneys fees.
A legal complaint is just one side of an argument. Trustmark has not answered the allegations.