DAMAGES AGAINST REINSURANCE AGENT AFFIRMED FOR FAILURE TO ADJUST COMMISSIONS BASED ON “INCURRED” RUN-OFF PAYMENTS
On December 18, 2007, we reported on Gamma Group, Inc. v. Transatlantic Reinsurance Co., in which a reinsurer and its cedent prevailed in a case involving their agent’s failure to deduct run-off payments from its commissions. In that decision, the appellate court reversed a damages award in favor of the reinsurer and cedent because the award was incorrectly based on “reasonable” run-off payments, as opposed to actual “incurred” payments. After the trial court re-determined damages on remand, the agent appealed, arguing that the trial court (1) went “outside the mandate” by considering various types of evidence, including evidence of run-off payments made subsequent to the first trial, (2) improperly considered untimely evidence, and (3) erroneously calculated post-judgment interest from the date of the original judgment in 2005, rather than the date of the second judgment in 2010. The appellate court rejected these arguments, holding that the trial court properly considered all evidence of incurred run-off payments, acted in its discretion in considering untimely (but cumulative) evidence, and appropriately calculated post-judgment interest from the date of the original judgment, which was “still in full force and effect as to liability issues.” Gamma Group, Inc. v. Transatlantic Reinsurance Co., Case No. 05-10-00705 (Tex. Ct. App. March 28, 2012).
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