Lancer Insurance Co. v. Anchor General
Published: Dec. 23, 2000 | Result Date: Aug. 1, 2000 | Filing Date: Jan. 1, 1900 |Case number: 730142 Verdict – $607,411
Judge
Court
San Diego Superior
Attorneys
Plaintiff
R. Gaylord Smith
(Lewis, Brisbois, Bisgaard & Smith LLP)
Martin J. Mullen
(Rowe Mullen LLP)
Defendant
Facts
According to the defendant: The plaintiff brought suit for breach of contract, inducement to breach, interference
and conspiracy claiming that the defendant agencies breached an exclusivity paragraph by writing insurance
through another company. The plaintiff was Lancer Insurance Company, an insurance corporation in the
business of non-standard auto coverage.
In 1996, the plaintiff began negotiations with defendants Anchor General Agency (as MGA), Anchor Claims
and Abe Badani for a non-standard auto program in California. Badani was the owner of both Anchor General
and Anchor Claims. The agreements were sign in 1997. The reinsurance was provided by defendant NAC and
the deal was brokered by AON. The plaintiff claimed that it made $2.3 million in the next 14 months from the
program. Problems developed between the plaintiff and ACS regarding claims handling and threats by the
plaintiff to exercise the six-month cancellation clause.
Defendant Badani contacted AON to set up a parallel program through defendant Greenwich, NACÆs wholly
owned subsidiary, thereby breaching the agreement which had an exclusivity paragraph.
The plaintiff alleged all defendants conspired together to have AGC breach the contracted by writing business
through Greenwich/NAC within the six-month runoff period and provided a facility for AGC to develop an
improper "companion" program. AON was the plaintiffÆs agent and the rest of the defendants interfered with
the plaintiffÆs relationship with AON and NAC.
The defendants contended that there was no conspiracy; that AGC/Bandini were entitled to terminate the
contract. The defendants further contended that they had to write insurance within the six-month runoff period
or go out of business and they could have obtained a facility from others. NAC was privileged to compete with
the plaintiff through Greenwich and Badani was privileged as he had the interest of his company in mind.
Also, AON was BadaniÆs agent before it was the plaintiffs.
Settlement Discussions
According to the defedant: The plaintiff made a settlement demand for $1.2 million from all defendant except for AON; $2 million from defendant AON. The defendant offered a C.C.P. 998 settlement demand for $300,000.
Damages
According to the defendant: The plaintiff alleged that the program would have gone on for three to five years, netting up to $4.2 million (now lost profits) and punitive damages for a total of $33,000 to $150,000. The plaintiff alleged a $381,000 loss in the six-month runoff period. Attorney fees of $800,000 by the plaintiffÆs present attorneys in this case were claimed under the contract and "tort of another."
Other Information
According to the defendant: On the first day of trial, AON "Mary Carter-ed" the remaining defendant by guaranteeing a $2 million recovery with a 50 percent credit to $2 million and a 100 percent credit thereafter. The judge granted a post-verdict 33 percent credit totaling $303,200 credit, leaving $1.7 million to AON. AON filed a writ regarding the offset credit for "Mary Carter."
Deliberation
2.5 days
Length
five weeks
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