National Indemnity fights $11.8M jury verdict involving multiple clients
The insurer tendered $1M to the defendants to resolve all claims multiple times with the stipulation to release their clients, but the offers were rejected.
Disputes between insurers and claimants aren’t unusual; however, a Nebraska-based insurance company has thrown its hands up after claiming it did all it could to resolve the differences in a claim involving multiple parties.
The insurer pointed to its numerous attempts to settle at its tendered policy limits with opposing counsel in a lawsuit filed in Key West federal court. It is seeking to limit the insured’s recovery for bad faith and for failing to adequately pay the insured parties in a 2018 auto crash with multiple deaths.
Louis M. Holzberg, a partner at Holzberg Legal in Miami who is not involved in the case, said the litigation between National Indemnity Co. of the South against multiple entities — including its clients Discount Rock & Sand Inc. and Carlos Manso Blanco; and the estates of nearly half a dozen victims in the collision — is a first-party insurance case in reverse.
“You always imagine the plaintiff as the injured person,” Holzberg said. “The individual who got in a car accident that has injuries and medical bills. This is the opposite. The insurance company is alleging, ‘We did everything right. There is nothing more that we can do. But we need the court to come in and say our obligation has ended.’”
Jesse D. Drawas, a partner at Kaufman Dolowich & Voluck in Fort Lauderdale, Fla., representing National Indemnity, declined to comment.
The dispute, in this case, stemmed from a business auto policy that National Indemnity issued to Discount Rock and, by extension, to the driver, Carlos Blanco. And National Indemnity stated in the complaint that regardless of the number of claims made or vehicles involved in an accident, it limits its liability for insurance coverage to $1 million.
Blanco caused a crash in which several defendants were either killed or suffered injuries, and most endured property damage. According to the complaint, National Indemnity tendered $1 million to the defendants to resolve all claims on multiple occasions with the stipulation to release Discount Rock and Blanco, but their offers were rejected.
Among the reasons cited for the rejection was the plaintiff probate estates’ demand for a financial affidavit from both Discount Rock and Blanco, which only the latter eventually released. National Indemnity then tried a new strategy in which it offered to tender $1 million to the probate estates to release Blanco.
While Blanco was ultimately released, the plaintiffs did not reach an agreement with Discount Rock. A subsequent trial resulted in a jury verdict in favor of the plaintiffs in the total amount of $11.8 million.
Now, National Indemnity’s counsel, Drawas, filed the lawsuit that will go before Senior U.S. District Judge Donald L. Graham, who sits in the Southern District of Florida.
Drawas cited two counts in the 21-page complaint, which are declaratory relief as both good faith claim handling, and as to the duty to defend and indemnify.
And for Discount Rock, the lawsuit is bad news because Holzberg said National Indemnity appeared to leave it responsible for the over $10 million difference between the tendered limit and the jury verdict.
“But how does any small company come up with $10 million in cash?” Holzberg said. “The insurance company is saying, ‘That is for you to figure out.’”
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