A former insured aggrieved by Applied Underwriters’ EquityComp program is asking a San Mateo Superior Court for permission to collect on an arbitration award it won more than five years ago. The employer’s attempts to collect on the judgment which is now worth over $1 million have been stymied by the lengthy conservation and rehabilitation machinations of Applied’s California Insurance Company.
In this case the Department’s action hurt rather than helped the insured because the conservation delayed the debt collection even though the carrier has hundreds of millions in assets.
Bayless Engineering filed the motion for relief from the court’s November 4, 2019, conservation order that blocked litigants from taking any action against CIC’s property. Prior to the conservation order Bayless won an arbitration award for $550,093 plus interest. The $550,093 was determined to be the amount that Bayless had paid in the EquityComp program that was in excess of what was due under the CIC guaranteed cost policy.
Moving to appeal the award, Applied gave Bayless a supersedes (appeal) bond for $688,000 under an agreement that stayed enforcement of the arbitration award. When Applied’s appeal failed, court filings say Bayless demanded payment on the judgment but was ignored. Three-weeks later the San Mateo court issued the order appointing Insurance Commissioner Ricardo Lara the conservator for California Insurance Company. The order also included a restraining order that blocked any action against CIC’s property. Of course, California Insurance Company which also wrote the underlying policy, was the surety on the appeals bond given to Bayless.
Attorney Larry Lichtenegger says the situation has changed now that the San Mateo Court approved the rehabilitation plan (for past coverage see Court Approves…). Lichtenegger says in the filings that counsel for Insurance Commissioner Ricardo Lara advised that he is no longer enjoined from seeking to recover the monies owed under the arbitration award.
Lichtenegger estimates that in addition to the original $550,093, Bayless is owed another $532,802.72 in interest as of last November. Interest is continuing to accrue at a rate of $150.71 per day, according to his calculation.
Lichtenegger is asking the court for relief from its stay order to collect the arbitration award, confirmation of the amount owed and CIC’s obligation to pay the amount of the judgment plus interest. He is also asking the court to award attorney fees and costs. The San Mateo Superior Court is set to hear the motions in March.