04/01/14– Miami– Ramon A. Abadin with Sedgwick, and Robert Harris, The Harris Law Firm Group, PA. (J. Albert Diaz)
Case: Instituto Nacional De Seguros v. Hemispheric Reinsurance Group LLC and Howden Insurance Brokers Ltd.
Case no: 10-33653CA04
Description: Breach of contract, breach of fiduciary duty, counterclaim on breach of contract by defendant
Filing date: June 15, 2010
Verdict date: March 17, 2014
Judge: Miami-Dade Circuit Judge Beth Bloom
Plaintiff attorneys: Petier Van Tol, Derek Craig and Nina Tandon, Hogan Lovells, New York
Defense attorneys: For Howden: Ramon Abadin, Sedgwick, Miami and Valerie Shea, Al Warrington and Charles Davant, Sedgwick, Fort Lauderdale. For Hemispheric Reinsurance: Robert Newton Harris of Harris Law Firm Group, Miami.
Verdict amount: Defense verdict
Details: Concerned about damage from an earthquake or tsunami to the country’s power plants, Instituto National de Seguros (INS), a Costa Rican governmental agency, put out a bid for reinsurance. The bid was awarded to Miami-based Hemispheric Reinsurance Group (HRG) for $300 million, with London-based Howden acting as the insurance broker.
INS later took issue with $2 million in commission payments to the two companies and wound up terminating them and hiring another reinsurance broker. INS then sued to recover part of the commissions. Hemispheric countersued, alleging they were still owed a final payment.
After numerous mediations failed, trial on the case began Feb. 18, 2014.
Plaintiff case: Plaintiffs called numerous witnesses, including two experts. The expert witnesses were Andrew Barile, a Savannah, Ga., reinsurance broker, and Paul Braithwaite, a New York City actuarial expert.
Barile testified to what he called the custom and practice in the industry for calculating commissions. Braithwaite estimated damages calculations for what he claimed were overcharged commissions.
INS President Guillermo Constenia testified that the brokers had betrayed the government’s trust. Additionally, four of his staff members from INS, including two executives, testified that INS did have a contract with Hemispheric that stipulated commission amounts.
The plaintiffs also called to the stand an adverse witness, HRG president John Blake, who explained the company’s commission structure.
Defense case: Defense took the unusual position of presenting no witnesses and no case, relying instead on its cross-examination of plaintiff witnesses to make its case.
Outcome: After deliberating for 2½ hours, jurors found no breach of contract existed but found that INS breached the contract with Hemispheric and Howden and awarded the companies $772,000 plus $219,000 in interest.
Comments: “Our client is very happy with the result, which they view as a complete vindication of their conduct in this very complicated reinsurance placement,” Abadin said.
Post-settlement: Plaintiffs have filed a motion for a new trial, rehearing of directed verdict motion and remittitur of damages. Defense has filed a motion for attorney fees of $3.3 million.