A claims management company (CMC) must face its accusers and a New York state court over the handling of a multimillion-dollar mesothelioma verdict claim. The company has been accused of blocking some of the payout on the verdict, which was entered on November 29, 2012, for $7,195,738.57.
According to court documents, in 2013, the plaintiff filed an action under Insurance Law § 3420 to recover trial-judgment damages against more than a dozen insurance companies that allegedly issued policies to predecessors or affiliates of the R&C company’s corporations. In July 2014, the Appellate Division, First Department, affirmed the judgment in the plaintiff’s favor. In 2016, the New York Court of Appeals affirmed the Appellate Division decision.
The plaintiff claims that the insurers have continued to refuse paying any portion of the 2012 judgment, alleging that the CMC “had instructed its clients not to pay the judgment in order to protect” its insurers “from paying out on its own reinsurance policies.” The plaintiff “produced as evidence” letters from the owner of the holding company “to investors discussing the company’s “float” — the money generated by premium payments and held and invested until claims are paid — saying they showed the company had motive to maximize the float time before claims payments.”
The CMC argued that the estate “had failed to show how it benefits from denying the claims and argued the letter is simply an explanation of common insurance industry financial practices that makes no references to the specific claims in dispute.”
A New York state judge disagreed, saying the letters “describe that the nature of the insurance contracts” the company “enforces is such that they will ‘never be subject to immediate or near-term demands for sums that are of significance to [their] cash resources. Further, the plaintiff has presented “sufficient evidence” that the CMC “acted to stall payouts” by its owner, reinsurance company, and subsidiary co., “to survive” the claims of the management company’s motion to dismiss.
Counsel for the estate says she expects the ruling will allow other policyholders to file similar claims against the CMC. “I think the decision poses a real threat to the business model of,” the CMC and the holding company that owns it, she said.
If you have been exposed to asbestos, see your doctor immediately. Although there is no cure for mesothelioma, early diagnosis offers the best treatment options and outcomes.
Archer, Rick. "Claims Handler Must Face Suit Over $7.2M Asbestos Verdict - Law360." Law360. Portfolio Media, Inc., 08 Feb. 2018. Web. 10 Mar. 2018.
"Konstantin v Certain Underwriters at Lloyd's London." Justia Law. Justia, 24 Jan. 2018. Web. 10 Mar. 2018.