New York plaintiffs lawyer Edward S. Stone said that he plans to appeal his loss this week in the Executive Life Insurance Company of New York (ELNY) case.
Stone said he wuld file a motion to the New York State Court of Appeals in Albany to fight the Feb. 6 dismissal by the state Appellate Division, of his suit against the New York Department of Financial Services (DFS) and its liquidation plan for the failed life insurance company.
In an interview with National Underwriter Life & Health after news of the dismissal, Stone said he will spend a couple of weeks preparing a solid argument that spells out very clearly how lower court conclusions support incorrect interpretations of New York law before filing the motion.
That's because the case must be strong and compelling in order to be taken up by the state's high court.
"You can't have blanket immunity. There has to be a standard," Stone stressed.
Attorneys headed by Stone for ELNY shortfall annuitants, some of the 1,5000 who will not be made whole, even with the super-engineered plan heavily fortified by the life insurance industry, both statutorily and voluntarily– claim that under New York law, judicial immunity is proper for acts undertaken by the state insurance superintendent and his agents in good faith, not in bad faith, as is alleged.
Such an interpretation could not possibly have been intended by the state legislature when Article 74 of the New York insurance law was enacted, Stone said.
Legislative history "suggests that the superintendent was granted authority to rehabilitate and liquidate distressed insurers to prevent waste by unscrupulous receivers, not to have their own exclusive agent gut solvent companies of their assets and run them into the ground. I cannot imagine a private receiver, no matter how incompetent or corrupt, wasting more assets than the [New York Liquidation] Bureau did with ELNY," he alleged.
There is a current deficit of close to $2 billion dollars in the ELNY estate, meaning Stone's clients won't be getting all the money promised them under their annuity contracts, usually as part of structured settlements.
On Wednesday, the Supreme Court of the State of New York Appellate Division: Second Judicial Department, panel of four judges concurred that there was no merit to Stone and his law partners' contention that the lower court, the Supreme Court, Nassau County, lacked subject matter jurisdiction to include, in the order approving the agreement, provisions which granted the receiver for ELNY judicial immunity and preliminary injunctive relief.
The appellate decision rendered Wednesday also said the DFS satisfied due process and found, contrary to Stone's allegations that the record does not support the contention that the hearing was "an unfair proceeding."
Stone has 30 days after the DFS files–which is expected soon–to then respond. The continued litigation means the liquidation plan submitted by the DFS and approved April 16, 2012, likely won't go forward by mid-March, which it may have absent any further challenges, unless the motion is denied by the state's highest court.
Still, Stone vowed to take the ELNY case all the way to the Supreme Court if he has to, and has his sights on the road far ahead.
"La vengeance est un plat qui se mange froid," the translation from the French, vengeance is a dish best served cold, Stone said in describing his ultimate vision of his role in the ELNY case.
Stone also said he will first fight the contempt ordered handed down by Nassau County Supreme Court John M. Galasso, and then revive the class action lawsuit he withdrew, without prejudice.
He agreed he was in it "for the long haul," and pointed to fellow lawyers on the ELNY Roger P. Christensen at Christensen & Jensen in Salt Lake City, Utah, and who handled Campbell v. State Farm, a case in which "they went through every insurance roadblock they could to get this case decided.
Christensen recovered $20 million in historic fraud case against State Farm, following one of the longest jury trials in Utah history and multiple appeals to the Utah and United States Supreme Courts, the law firm website states.
Citing Wikipedia, State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408 (2003), was a case in which the Supreme Court held that the due process clause usually limits punitive damage awards to less than 10 times the size of the compensatory damages awarded.
Stone did concede that the decision Wednesday was a set back. "I can't sugar coat this he said," adding he was kind of 'shocked that the court did not uphold New York law.
"Regrettably, the Appellate Division chose not to consider the proper standard for judicial immunity under relevant New York case law and simply concluded, without analysis or even discussion, that the grants of judicial immunity and injunctions ordered by Judge Galasso were proper," Stone followed up in an email.
