 |
 |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|
|
|
|
First State Staffing Plus9/6/2005
Submitted: May 13, 2005
Before the Court is plaintiff First State Staffing Plus Inc.'s ("First State") action for specific performance of a canceled workers' compensation insurance contract. First State procured the insurance through its insurance agent and former defendant, The Insurance Market, Inc. ("TIM"). Defendant Montgomery Mutual Insurance Company ("Montgomery Mutual") was the insurance provider. After nearly eight months of coverage, the insurance contract was canceled for nonpayment of premiums. First State claims that the cancellation was improper because First State complied with the mandates of the cancellation notice and because it made an oral agreement with TIM to make partial payments to avoid cancellation.
On December 15, 2004, First State settled its claims against TIM, leaving Montgomery Mutual as the sole remaining defendant. This matter was tried on December 20, 2004, briefed and then argued on May 13, 2005. For the reasons stated in this Memorandum Opinion, I conclude that Montgomery Mutual properly canceled the insurance, there was no oral agreement between First State and TIM to modify the terms of the policy and First State failed to prove its related claims against Montgomery Mutual for negligence and fraud based on the acts of its agent TIM.
I. BACKGROUND
First State was a Delaware corporation that operated as a medical staffing agency from when it was founded in May 1998 to when it ceased doing business in May 2003. Faye Passwaters, a Licensed Practical Nurse, founded First State, and was its sole stockholder and president. First State employed approximately 100 nurses and certified nursing assistants and an office staff of seven. During its years of operation, First State's yearly revenues were between $2,000,000 and $3,000,000. First State placed its nurses with a diverse group of customers including nursing homes, hospitals, poultry plants, schools and prisons. Many of those customers required First State to obtain and show proof of its workers' compensation insurance.
On March 1, 2004, First State was declared "inoperative and void" by the State of Delaware for failure to pay taxes. First State represented at trial an argument that it intended to pay its back taxes and regain its corporate status, but to date the Court has received no indication that First State has been reinstated as a valid corporation.
TIM is a licensed insurance agency offering coverage from a number of insurance providers, including Montgomery Mutual. TIM offered Montgomery Mutual's insurance products on an "agency billed" basis, meaning that once TIM had sold a Montgomery Mutual policy, customers paid their premiums directly to TIM and contacted TIM for all customer service needs. In fact, all customer contact was handled by TIM. TIM paid Montgomery Mutual for the insurance premiums and separately billed the customer. That is what occurred in the case of First State. Thus, if a customer failed to pay its premiums, TIM bore the risk.
Passwaters was the First State employee that dealt with obtaining and maintaining insurance. In July 1999, Passwaters discussed First State's insurance needs with David Noel, a TIM sales agent. Passwaters was familiar with Noel because he had acted as First State's insurance agent in the past while at another insurance agency. Over the course of the next few months, the two discussed First State's need for four types of insurance: workers' compensation, business owner's, general liability and auto.
Passwaters decided to use TIM for all of First State's insurance needs and obtained workers' compensation insurance and business owner's insurance effective October 9, 1999
Page 1 2 3 4 5 6 7 8 9 10 11 12 Delaware Personal Injury Attorneys
Personal Injury Lawyers
|
| |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|