REINSURER WINS $16.5 MILLION VERDICT ON TORTIOUS INTERFERENCE CLAIMS AGAINST AUTO INSURER AND AGENTS
Lincoln General Insurance Company entered into certain quota share reinsurance agreements with U.S. Auto Insurance Services. It brought suit in 2007 for alleged unpaid premium. The parties entered into a settlement agreement, requiring the parties to enter new reinsurance agreements, provide partial security for the risks defendant sought to transfer, fund costs of investigations of underlying claims, and pay $1.5 million to Lincoln General. In 2010, Lincoln General again brought suit, against U.S. Auto and its agents/guarantors, alleging that the defendants breached the settlement agreement. The latter suit alleged, among other things, that the defendants tortiously interfered with, and aided and abetted the breach of, the reinsurance agreements and other related agreements, by submitting fraudulent claims and making misrepresentations. After a four-day bench trial in early January 2013, the Court found for Lincoln, and ordered the defendants, jointly and severally, to pay Lincoln $16.5 million on the tortious interference claim. The Court also found in Lincoln’s favor on the defendants’ counterclaims. Lincoln General Insurance Co. v. U.S. Auto Insurance Services, Inc., No. 3:10-cv-2307 (N.D. Tex. Jan. 25, 2013).
This post written by John Pitblado.
