COURT HOLDS THAT UNDERWRITER CONVERTED PREMIUM THAT IT FAILED TO REMIT TO INSURER
Everest Reinsurance Company entered into an agreement with International Aerospace Insurance Services, Inc. (“Inter-Aero”) whereby Inter-Aero would underwrite space and aviation risks, submit premium to Everest, less commission, and, in addition, share in a percentage of Everest’s profit from the business Inter-Aero generated. A dispute arose regarding Inter-Aero’s entitlement to profit sharing. Inter-Aero responded by withholding a substantial purported “profit share payment” from premiums due to Everest. Everest filed an action in federal court claiming conversion and breach of fiduciary duty. The court granted Everest’s motion for summary judgment, holding that Inter-Aero converted the portion of premiums that it withheld and that it must remit them to Everest. It denied Everest’s motion on its breach of fiduciary duty claim as duplicative of the conversion count. Everest Reinsurance Co. v. International Aerospace Insurance Services, Inc., Case No. 3:11-cv-05332 (USDC D.N.J. Aug. 22, 2012).
This post written by Ben Seessel.
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