A lawsuit filed Monday in Georgia state court accuses Argo Group of first undermining and then competing with its former construction program manager, leaving it “dead in the water.”
In 2016, Alpharetta Underwriters LLC, which specializes in providing complex coverage for the construction industry, entered into a program administrator agreement with an Argo Group US Inc. subsidiary that included a mutually exclusive exclusivity clause that could be terminated or substantially amended only for certain reasons and with 180 days notice. according to the lawsuit in Atlanta. The case is Alpharetta Underwriters LLC and Venbrook Group LLC v. Argonaut Management Services Inc. et. al.
In 201
2, Alpharetta began exploring the possibility of selling itself. After Argo chose not to place a bid for Alpharetta, Venbrook Group LLC said in November 2021 that they had bought the business for an undisclosed amount.Before Venbrook bought Alpharetta, Venbrook Argos was assured that they did not anticipate any changes that would significantly affect Alpharetta’s issue results, the lawsuit said.
But in early 2022, Argo “implemented a series of measures that destroyed Alpharetta’s operations” as it sought to “unilaterally introduce commercially unreasonable changes to Alpharetta’s emission guarantee guidelines.”
These included going from having no restriction on writing coverage for neighborhood homes to limiting the total number to 25, when Argo knew that most, if not all, new housing projects have more than 25 units, the lawsuit said.
When Alpharetta protested the changes, saying they were likely to ruin its operations, “Argo retaliated by sending a letter claiming termination” of the program administrator agreement.
“Argo’s illegal and inappropriate actions have left Alpharetta dead in the water, suddenly cut off from its customers because Argo refuses to allow Alpharetta to guarantee the profitable business they have been producing for several years,” the lawsuit states.
Then in mid-June, Alpharetta found out that Argo was marketing construction companies in the middle market “on its own, under the guise of” ‘Argo Construction “, it was stated in the lawsuit.
“Argo terminated misleading Alpharetta to take over the construction guarantee business itself, despite Alpharetta’s exclusive rights, a fact that was never revealed but instead hidden by Argo from Alpharetta and Venbrook,” the lawsuit states.
It accuses the Argo entities of breach of contract, indemnity, injunction, unfair competition and unfair or misleading acts or practices and negligent misrepresentation.
An Alpharetta lawyer had no comment, and Argo did not respond to a request for comment.
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