MAKING INSURANCE COMPANIES PAY
Although Hamilton Wingo is best known for helping people in serious personal injury and wrongful death cases, this insurance coverage dispute shows how well our trial skills translate to high-stakes business litigation.
The story began when a successful Texas business struck a deal for a major purchase of medical equipment. When the agreement transformed into a multistate bankruptcy and appellate battle stretching from Florida to California, Chris Hamilton was called to help.
Relying on his years of trial work, Chris persuaded an appeals court that a national insurance company should honor its policy and provide coverage for an earlier award of more than $17 million. The case was later settled for a confidential amount.
HIDDEN DETAILS EMERGE AFTER A LUCRATIVE DEAL
Dallas-based Primcogent Solutions was one of the country’s leading providers of products for health and wellness companies. In 2011, the company decided to expand its operations by buying a substantial amount of medical laser equipment as part of a licensing agreement with a California-based manufacturer.
Primcogent had great expectations based on the promises made before agreeing to the deal, which included the company becoming the exclusive North American distributor of medical lasers used in popular cosmetology procedures.
Unfortunately for Primcogent, the number of medical lasers that the manufacturer said were being rented or leased was too high by one-third. In addition, case evidence revealed that two-thirds of the supposedly leased lasers were being returned at an alarming rate. Meanwhile, the other third were demo models not generating revenue.
FALSE PROMISES LEAD TO BANKRUPTCY
Over the next two years, the laser deal caused Primcogent to experience a series of related financial issues, culminating with the company filing for bankruptcy protection. The trustee appointed by the bankruptcy court argued that the California manufacturer failed to disclose critical information about its medical lasers, including a long history of customer complaints and the true potential for future revenue.
The bankruptcy trustee offered to settle with the manufacturer’s insurer for the policy limits before a scheduled arbitration trial. Still, the insurer refused and continued to deny coverage based on a series of legal excuses.
After a six-day arbitration trial, the trustee was awarded $17.1 million in damages against the manufacturer. Its insurer, Florida-based Carolina Casualty Insurance Company, responded with an appeal before the U.S. Court of Appeals for the Fifth Circuit in New Orleans.
Just hours after Chris presented arguments before the Fifth Circuit, the court issued an opinion upholding the multimillion-dollar arbitration award in favor of his client. While some may have assumed this was where the story would end, there was still more to fight.
NOT OVER ‘TIL IT’S OVER
When Carolina Casualty refused to pay the arbitration award, Hamilton Wingo filed a lawsuit in Florida on behalf of the bankruptcy trustee. After an extended hearing in 2019 over competing motions for summary judgment, the trial court agreed with Chris by denying the insurance company’s attempt to dismiss the case on every count, and the Court granted summary judgment for Chris’ client.
Despite its efforts to avoid responsibility in the appeals court and elsewhere, Carolina Casualty faced the music in June 2021. The Florida First District Court of Appeal affirmed the coverage award for the full $17.1 million judgment before lifting the discovery stay tied to Chris’ client’s claims for bad faith and fraud. That decision allowed the trustee to access Carolina Casualty’s internal files, which the company had withheld by claiming them as confidential.
This case then resulted in a confidential settlement resolving all judgments and claims.
This case is an excellent example of the skills and determination that Chris and all the attorneys at our firm bring to every case we handle. Although the litigation had been ongoing for years before we were brought in, we quickly assessed the situation and began working toward our client’s goals. That is why we will continue our efforts to win key rulings and judgments until the final chapter is completed.