Brokerage Wins $3.8 Million Verdict
A Los Angeles County Superior Court jury awarded $3.8 million to an insurance brokerage that filed suit seeking compensation for lost profits and a damaged reputation.
In the February 2012 lawsuit, HCF Insurance Agency in Woodland Hills, Calif., accused Pasadena Healthcare Management Inc. of Cerritos, Calif., of failing to pay insurance policy premiums, broker commissions and fees, and repayment of a loan from the brokerage agency. It accused the company of breach of contract and fraud.
The $3.8 million verdict on June 3 included about $1.5 million in lost profits and business reputation damages and $2 million in punitive damages.
Pasadena Healthcare Management operates convalescent and skilled nursing homes in Southern California. The company could not be reached for comment on the litigation.
It appointed HCF as its exclusive broker of record on Nov. 2, 2011, requesting quotes for workers’ compensation, general and professional liability, and property insurance.
In addition to failing to pay premiums on the insurance policies, Pasadena Healthcare failed to repay $75,000, which HCF advanced to it for a down payment on the workers’ compensation policy.
“When Pasadena Healthcare breached the insurance contracts, HCF’s reputation with insurance carriers, underwriters and a financing company was substantially harmed,” said Brandon S. Reif, lead trial counsel and managing partner of Winget Spadafora & Schwartzberg, in a statement.
“How do you put a value on a business like this?” he argued. “You can’t get these relationships back after they’re destroyed.”