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Bellingham business sued for fraud by new owners, seeks dismissal of case

BELLINGHAM, Wash. — PCF Insurance Services of the West, LLC, of Utah, acquired Rice Insurance Agency of Bellingham in July of 2021. On September 20th, PCF filed a complaint in Western Washington District Court against a former controlling member and principal officer of Rice claiming he “engaged in a covert scheme to defraud PCF of millions of dollars.”

In the complaint, PCF claimed the defendant “had been manipulating the financial records of Rice to deliberately inflate his earn-out payments from the sale.” PCF estimated that it has suffered tens of millions of dollars in damages.

In their answer to the complaint, defense lawyers note that since the acquisition, leadership behind the deal had left PCF and “new executive management who loathe the terms of the Purchase Agreement they inherited” are in place. They claim this new leadership is attempting to “undo the original transaction to purchase Rice” and is using the court case “in a heavy-handed effort to gain commercial leverage.”

Defense attorneys point to a purchase agreement provision which reportedly details an out-of-court process in the event of such disputes and that both parties are obligated follow. PCF is said to have not followed this provision when they filed the complaint with the court.

The defense has filed a motion to have the suit dismissed based in part due to the claimed violation of the agreement provision.

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