Gray•Duffy Obtains Withdrawal of $535,000 Claim Against Insurance Broker Client

May 2012

Overview

Ronald Mandel of Gray•Duffy’s Encino office maintained a no liability position for an insurance broker client in an insurance coverage claim.

Discussion

Tri-Gents Investments, Inc. v. Brown & Riding Insurance Services, Inc. The claim arises out of litigation that was settled in Federal Court in October 2010  between Tri-Gents Investments, Inc. (“Tri-Gents”) and Lexington Insurance Company.  In connection with the underlying federal court litigation, Ronald Mandel of Gray•Duffy successfully maintained the non-litigant status for Brown & Riding Insurance Services, Inc. (“Brown & Riding”), a wholesale and surplus lines broker. Brown & Riding was involved in the procurement of insurance for Tri-Gents during a policy period that immediately preceded the time frame when the initial claim occurred.  During the course of the underlying federal court litigation, the plaintiff’s attorney espoused certain theories in attempting to connect Brown & Riding’s activities for a prior policy period to his claims of improper insurance during the subsequent policy period in which Brown & Riding was not involved.  Mr. Mandel defended Brown & Riding Broker, Ryan Hamm, at deposition in the underlying action. After the federal court action was resolved, Tri-Gents made a subsequent claim for amounts Brown & Riding allegedly did not recover in settlement with Lexington Insurance Company.  Those costs were in excess of $535,000 and included attorney’s fees and costs.  Counsel for Tri-Gents again espoused certain theories attempting to connect acts and activities of Ryan Hamm as broker for Tri-Gents in a prior policy period involving Lexington Insurance Company for coverage that was provided by a different wholesale broker through Lexington Insurance Company for the policy in which the claim occurred. Mr. Mandel maintained the position of no liability, no basis of liability and no legal theories that the plaintiff could have set forth to provide a nexus to argue a theory of liability as set forth by the plaintiff.  A denial letter detailing the position of Brown & Riding for no liability was sent to the plaintiff’s attorney. There has been no further activity in the past year or indication that this claim will be pursued.

Please Note: This article is necessarily general in nature and is not a substitute for legal advice with respect to any particular case. Readers should consult with an attorney before taking any action affecting their interests.