Secured: $2 Million Jury Verdict After Two-Week Trial

MIAMI, Fla. March 3, 2016 – On February 23, a jury in the United States District Court for the Southern District of Florida awarded a $2 million verdict to Heller Waldman client Guarantee Insurance Company.

In Guarantee Insurance Company vs. Heffernan Insurance Brokers, Inc. and Socius Insurance Services, Inc., Heller Waldman founding partner Glen Waldman, assisted by attorney Michael Sayre, argued that insurance brokers Heffernan Insurance Brokers, Inc., and Socius Insurance Services, Inc., mishandled reporting to Guarantee’s insurance carriers a substantial bad-faith claim brought against Guarantee by a paraplegic injured roofer in 2009.

In a two-and-one-half-week trial, Waldman and Sayre presented evidence to persuade the jury that the brokers had failed to meet the standard of care for a reasonable insurance broker in submitting the bad-faith claim only to the primary insurance carrier, XL Insurance, and not simultaneously notifying the excess insurer, Catlin, as they were required to do. Catlin had underwritten and Guarantee had paid for a policy for excess coverage of $2 million.

Waldman further argued that when the brokers discovered their mistake, they covered up the error for two years and never alerted Guarantee that they had not notified Catlin of the claim. Waldman was able to prove that not only did the brokers cover up their mistake, but they made no effort to reach out to Catlin to try to get the claim covered. Just prior to the settlement of the underlying claim, the brokers finally disclosed the error ——- after Guarantee specifically inquired as to whether Catlin had been notified of the claim. Upon instruction from Guarantee, the brokers submitted the claim to Catlin. Not surprisingly, Catlin denied the claim for late notice. Consequently, when the underlying claim was settled, Guarantee needed to cover the $2 million that Catlin would have otherwise paid after the primary carrier tendered its full $1 million towards the case and settlement.

Subsequent to the filing of this lawsuit, Waldman discovered the cover up during a videotaped deposition of the principal broker (all documents regarding the cover-up were buried on a privilege log, which subsequently Heffernan was forced to turn over). Waldman was able to get the principal broker to admit under oath that he lacked candor with his client. This video was played to the jury and was very persuasive.

The brokers raised several defenses, including: (1) that the underlying claim was settled for too much; and (2) Guarantee would not have been covered by Catlin in any event due to Guarantee’s alleged prior notice of the claim.

After only a little over an hour of deliberation, the jury found the brokers negligent, awarding $2 million to Guarantee Insurance Company. Subsequently the award was reduced to $1 million. The reduction and other issues will be the subject of post-trial motions. Yet, Waldman said the overall outcome was an important win for Heller Waldman’s client.

“We’re very pleased with the outcome of this case,” he said. “It’s important for companies, like people, to own up to their mistakes. Those in charge need to understand that if you don’t take ownership for your actions, take an unreasonable litigation position and compound the problem by trying to cover it up, we are coming for you.”

The case was immediately reported on by Law360, which had been following the case since 2015.
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