New trial possible in 1998 insurance dispute

AP News
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Posted: Dec 08, 2009 3:54 PM

After more than a decade and four Nebraska Supreme Court rulings, a new trial may soon be scheduled in a multimillion-dollar insurance dispute between Florida and Countrywide Insurance Agency.

Florida is still trying to collect $4.7 million in premiums and interest the state says Omaha-based Countrywide Insurance Agency owed to a failed company Florida had taken over. Countrywide and its now-deceased owner, David Fulkerson, have fought the collection effort since the lawsuit was first filed in 1998.

Earlier this fall, the Nebraska Supreme Court issued its fourth ruling on the case and cleared the way for a new trial. Attorneys for Fulkerson's estate and Florida plan to meet with Douglas County District Judge Peter Bataillon on Monday to set the case's schedule.

Florida became involved in this dispute in 1997 because its Department of Insurance took over an insolvent Florida insurance company, United Southern Assurance, that had been doing business with Countrywide Truck Insurance. The lawsuit was filed in 1998.

Countrywide Truck Insurance and United Southern were both owned by the same parent company, Concord General Corp. Fulkerson managed Countrywide Truck before the company's assets were transferred to his new company, Countrywide Insurance.

Florida maintains that Countrywide Insurance kept millions that was owed to United Southern, but Countrywide and Fulkerson deny taking any money fraudulently.

Most of the money involved in the dispute came from premiums Countrywide Truck collected and was supposed to send to United Southern. But when Florida officials ordered United Southern to stop writing insurance policies in 1997, Countrywide Truck did not hand over four months of premiums.

Fulkerson's attorney, William Gast, said the latest Supreme Court ruling was "hugely disappointing" because he had hoped the high court would order an end to the case. Gast said Fulkerson died this fall.

Gast had argued on Countrywide's and Fulkerson's behalf that the three previous Supreme Court rulings in this case eliminated most of the issues Florida raised in the lawsuit.

But the Supreme Court said this fall that its previous three rulings didn't settle the key questions in the case because it is a jury's job to determine whether a fraudulent transfer occurred. The court filed its latest ruling in the case with little fanfare and didn't publish it publicly.

Florida's attorney, Robert Craig, said the state remains committed to collecting the money it believes Fulkerson and Countrywide owed.

Bataillon dismissed a jury in 2006 after the first trial, and ordered Countrywide to repay $2.23 million in premiums owed to United Southern Assurance Co., and pay $2.44 million in interest. The Supreme Court later ruled a jury, not Bataillon, should have decided the case.

The high court ruled in 1999 that the trial judge was wrong to issue a default judgment against Fulkerson and Countrywide. Then in 2005, the court ruled it didn't have jurisdiction to evaluate whether Bataillon should have recused himself from the case.

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On the Net:

Nebraska Judicial Branch: http://www.supremecourt.ne.gov