Altoona Housing Authority suing insurance company

HOLLIDAYSBURG – The Altoona Housing Authority is suing a Philadelphia-area insurance company to obtain legal representation for an upcoming civil rights battle in the U.S. District Court in Johnstown.

The authority is being sued by two Altoona families who are contesting the authority’s decision to shut off their rental assistance under the federal Section 8 program. The court battle has been ongoing for the last two years and is expected to be costly, according to the authority’s lawsuit last week in Blair County Court.

The case in question involves a lawsuit brought by the Community Justice Project of Pittsburgh. The families contend their due process rights were violated when the authority attempted to take away their vouchers for rental assistance because they allowed unauthorized people to stay at their homes.

The families said the authority unfairly decided their cases by using facts that were not brought out during hearings of the cases.

In legal papers filed by Hollidaysburg attorney Louis C. Schmitt Jr. on behalf of the authority, it is estimated that the cost of legal fees for the federal court battle will “greatly exceed $50,000.” Schmitt was not available Wednesday to discuss the authority’s legal action.

The authority was expecting to be defended by the Philadelphia Indemnity Insurance Co. of Bala Cynwyd, but the company is rejecting the authority’s request for coverage, contending the authority’s policy does not cover questions involving “professional services” by the staff, according to the lawsuit

The authority said it did not provide any legal, financial advice or other professional services to the families in question. The insurance company is arguing that the question before the federal court has to do with the authority’s administration of the Section 8 program – a professional service – and is excluded from the policy.

The authority claims there has been a breach of contract because of the insurance company’s action.

“[The authority] has been damaged by PIIC’s contractual breach by among other things, being denied benefits of any defense under the PIIC policy,” the authority contends in its lawsuit.

It is asking the court to order the insurance company to provide investigative and costs of defense, other damages allowed and pre- and post-judgment interest as well as court costs.