Beach Resort Settles for Millions After Accident, But Can't Pay Due to Defunct Insurance

Beach Resort Settles for Millions After Accident, But Can't Pay Due to Defunct Insurance

Posted By Maher Law Firm || 17-Feb-2017

After a Shephard’s Beach Resort employee struck and killed two bicyclists while driving intoxicated, Shephard’s eventually agreed to enter a consent judgment to pay each decedent’s estate $3.5 million for a total of $7 million. However, years after the deaths, that settlement amount has still not been indemnified by the insurance company that Shepard’s broker, Wells Fargo Insurance Services USA Inc., placed the resort with because the insurance company was insolvent at the time the insurance policy was obtained.

Shephard’s has recently filed a Complaint with the assistance of Dan Cotter & George Johnson of The Maher Law Firm in Orlando. The lawsuit targets both Wells Fargo and its employee, Tom Stewart, who together managed and brokered the resort’s primary and excess insurance policies. The claim states the resort paid thousands of dollars in premiums for insurance coverage that Wells Fargo knew, or should have known, was insolvent at the time it was placed. Shephard’s claims Wells Fargo and Stewart influenced the resort to swap out its insurance policies to go with another insurance company, Indemnity Insurance Corp., because of higher commissions that would be paid to Wells Fargo by Indemnity. Not long after the claim was filed by Shephard’s for the employee-pedestrian accident, Shephard’s was notified that Indemnity was insolvent.

The lawsuit brought by Shephard’s Beach Resort cites:

  • Negligence
  • Breach of contract
  • Negligent misrepresentation, and
  • Breach of fiduciary duty.

Shephard’s has been unable to pay the settlement because of the lack of insurance coverage. This has clearly caused unsatisfied harm and loss to the Estates of the two decedents, who have pressed to collect the agreed upon compensation. Shephard’s also had to pay additional legal expenses to defend itself from further penalty. Shephard’s has now assigned any proceeds it collects from Wells Fargo and Stewart to be used to pay off the settlements to the decedents’ estates.

Potentially Defunct Insurance Coverage from the Start

Shephard’s Beach Resort believes Indemnity, brokered through Wells Fargo and Stewart, should have never been offered as an insurance provider in the first place. The lawsuit cites red flags that illustrated that Indemnity was not financially viable, such as the suspicious background of its founder and records that revealed inappropriate practices in its operation. Shephard’s claims Indemnity was insolvent before its primary and express policies were ever transferred to Indemnity by Wells Fargo. If true, it could show that Wells Fargo and Stewart should not have ever brokered this insurance firm and acted negligently with the resort’s insurance contracts.

Why Small Businesses Need Trial Lawyers

The Shephard’s case serves as a clear reminder that businesses of all sizes, and particularly small businesses, need the help of trial lawyers from time to time. Wells Fargo and Stewart have refused to provide indemnification to Shephard’s, despite the fact that they are responsible for Shepard’s being placed with an insolvent carrier. Wells Fargo and Stewart also refused to attend any mediations between Shephard’s and the Estates of the decedents. Small businesses need insurance they can count on; and they need trial lawyers to zealously protect their interests when the brokers who sell them such policies knowingly place them with questionable coverage just because it may bring them greater profits.

With The Maher Law Firm stepping in to sort out this insurance battle for our clients, we hope to bring about a fair resolution to this case. We will continue to update this story on our legal blog as developments occur. Be sure to check in regularly to stay up-to-speed.

Do you need the assistance of The Maher Law Firm and our Orlando injury attorneys? Contact us or call 855.338.0720 to set up a consultation to discuss the details of your case.

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