Looking for Kristin Rossum "American Beauty" case? Click HERE.
Click here for lawsuit against Keenan & Associates et al. Also, see San Francisco School District v. Keenan & Associates.
The California Court of Appeal has ruled against Grossmont-Cuyamaca Community College and in favor of David Agosto, who appealed the dismissal of his case by Judge Joan Lewis in San Diego Superior court.
Never one to accept a loss, Jack Sleeth says David Agosoto "owes us money."
Ironically, when the case went back to Superior Court after the above decision, Agosto was awarded back pay but denied reinstatement. If the District had filed appropriate papers the District would not have had to pony-up Agosto's back pay. It turns out that if there is no order for reinstatement, there should be no order for back pay.
The Court of Appeal said (in a separate decision from the one above):
"Nevertheless, because District did not file a cross-appeal challenging the trial court's writ of mandate directing District to pay Agosto back pay (for the period of July through November 2006), District cannot now challenge the trial court's error in awarding him back pay..."
Agosto made mistakes, too. Agosto's petition for writ of mandate was denied because he should have filed a complaint for damages instead.
APPEALS COURT JUDGE: GROSSMONT-CUYAMACA RESORTS TO 'FRAUD' IN JUSTIFYING FIRING OF SICK WORKER
By Chris Reed
San Diego Union-Tribune (blog)
July 30, 2008
I've badmouthed the Grossmont-Cuyamaca Community College District for years for its power plays, contempt for ethical standards and atttempts to whitewash scandal. Now I have fresh evidence that district constituents should be ashamed of the people they've elected as leaders. In comes in the form of a sharply worded decision issued yesterday in which an appeals court reversed a Superior Court judge's decision to throw out a lawsuit in which a fired top official at Grossmont-Cuyamaca charges he was denied due process and essentially forced out with a legal dirty trick. The ruling remands the lawsuit back to the lower court and orders its reconsideration. David Jay Agosto was hired in 1995 as executive dean of community services at Cuyamaca College and went on to serve in a variety of big jobs. But in February 2006, while Agosto was on medical leave to cope with kidney disease, he was fired by the Grossmont-Cuyamaca board of directors in a closed-session meeting.
Agosto challenged this ruling, saying his original 1995 contract made him the beneficiary of job protections which required the board to give him notice of at least six months before the expiration of his contract. Here's where the dirty trick comes in: The argument that the GCCCD's lawyers used to persuade Superior Court Judge Joan M. Lewis to throw out Agosto's lawsuit was that the original 1995 contract had never taken legal effect because it was -- for reasons unknown -- never signed by the district's chancellor. It was kept on file, just never signed.
The district argued that contract was invalid under the "statute of frauds" -- a legal provision which requires hard, documented evidence of contracts that last more than a year to ensure that they are not fraudulently redefined at some later date by the employer or employee.
[Maura Larkins note: This is exactly what Chancellor Omero Suarez did: he ordered his contract changed without approval from the board.]
What a joke. The district operated for more than a decade as if the contract were in effect, then, when convenient, declared it null and void. The appeals court figured out this stunk to the high heavens even if Judge Lewis couldn't. Here's a sign of its disgust:The statute of frauds exists to prevent the commission of fraud, not to facilitate fraud.You follow? Judge James A. McIntyre is saying the fraud that's going on here is on the district's part! Wow. He's absolutely right.Now get ready for the members of the district board to blame its lawyers. It's what they do. Lots of rotten stuff happens on their watch, sure. But, you see, it's never their fault.Read the appellate decision here. The passage I cited is on page 5..
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http://www.sfgov.org/site/cityattorney_page.asp?id=38987
Taking on Insurance Broker Kickback Scheme
Herrera Move Targets Insurance Broker Kickback Scheme with Unfair Competition Charges
Joining Case Against Driver Alliant and Keenan & Associates, S.F. City Attorney Seeks to Assert Aggressive New Claims Under State Unfair Competition Act
SAN FRANCISCO (May 1, 2006) -- City Attorney Dennis Herrera has moved to join a civil lawsuit against two major California insurance brokerages for engaging in elaborate profit-sharing and bid-rigging schemes with insurance providers, whereby brokers steered unwitting public sector clients toward preferred insurance companies in exchange for illicit kickbacks. In seeking leave from Alameda County Superior Court Judge Robert B. Freedman to join the case as a co-plaintiff alongside the County of Santa Clara, the San Francisco Community College District, the San Francisco Unified School District and the Tuolomne Joint Powers Authority, Herrera is not moving to join the proposed class on behalf of the City, but rather to assert an additional set of claims on behalf of the People of the State of California under the state's Unfair Competition Law.
In a proposed amended complaint filed in tandem with the City Attorney's motion last Friday, Herrera charges the San Diego-based Driver Alliant Insurance Services, Inc. and Torrance, Calif.-based Keenan & Associates with multiple violations of California's Business & Professions, Civil, Government and Insurance Codes, including fraud, unjust enrichment, unfair business practices, unlawful restraint of the business of insurance, suppressing competition, collusive and falsely-inflated pricing, and conflict of interest.
"Keenan and Driver are poster children for why California needs more aggressive enforcement of the Unfair Competition Law," Herrera said. "The damage done by their unlawful and fraudulent conduct isn't limited to the local governments and taxpayers they've managed to fleece. It's an assault on the honest brokers with which they compete, and it undermines the integrity of the marketplace."
In addition to injunctive relief requiring the companies to immediately cease their fraudulent conduct and conflicts of interest, Herrera is seeking full restitution of all monies wrongfully acquired by the companies as a result of the schemes as well as civil penalties in the amount of $2,500 per violation. The plaintiffs additionally seek attorneys' fees, interest and expenses associated with the action.
Claims on behalf of the People under the Unfair Competition Law, or California Business & Professions Code § 17200 et seq., may only be brought by public prosecutors such as the attorney general, district attorneys, county counsels authorized by their district attorneys, or city attorneys of municipalities with populations of 750,000 or greater. Reforms enacted by California voters in 2004, through the passage of Proposition 64, severely limit the ability of other parties to bring suit under the Unfair Competition Law.
Attorneys for the proposed class plaintiffs, County of Santa Clara, San Francisco Community College District, San Francisco Unified School District and Tuolomne Joint Powers Authority, are John J. Stoia, Jr., Theodore J. Pintar, James D. McNamara, Mary Lynne Calkins and Rachel L. Jensen from the San Diego-based law firm of Lerach Coughlin Stoia Geller Rudman & Robbins LLP; former San Francisco City Attorney Louise H. Renne and former Deputy City Attorneys Randy E. Riddle and Ingrid M. Evans of the San Francisco-based law firm of Renne Sloan Holtzman Sakai, LLP. Deputy City Attorneys handling the claims on behalf of the People of the State of California include Chief of Special Litigation Owen J. Clements and Deputy City Attorneys Kristine A. Poplawski and Warren Metlitzky.
The case is County of Santa Clara, San Francisco Community College District, San Francisco Unified School District, Tuolomne Joint Powers Authority, and the People of the State of California v. Driver Alliant Insurance Services, Inc., Keenan & Associates et al , Superior Court of the State of California, County of Alameda, Case No. RG04183334, Proposed Fourth Amended Class Action Complaint filed April 28, 2006.
http://www.ct.gov/ag/cwp/view.asp?A=1949&Q=303176
Connecticut Attorney General's Office
Press Release
Attorney General Announces New Allegations Against
Marsh; Settles With Insurer Ace
September 22, 2005
Attorney General Richard Blumenthal today announced new allegations in his lawsuit against insurance broker Marsh & McLennan, Inc., including bid rigging, price fixing and illegally steering Connecticut businesses and consumers to favored insurers in exchange for tens of millions of dollars in undisclosed kickbacks.
Previous allegations involving a state contract remain pending against Marsh – and have now expanded to include allegations of bid rigging and insurance contract steering potentially involving thousands of Connecticut clients. Blumenthal's suit seeks restitution and damages for Connecticut consumers.
"We have uncovered powerful evidence of a systematic scheme to raise insurance prices," Blumenthal said. "We also have strong evidence of bid rigging, victimizing specific Connecticut consumers and companies. In essence, Marsh established a toll both between insurers and consumers, and the toll exacted was heavy. Creating the illusion of free and open competition, insurers agreed to provide Marsh with rigged or fictitious quotes in exchange for the prospect of submitting winning bids on future placements. Marsh threatened retaliation against non-players.
"Our new and significant allegations seek money back for the hundreds of Connecticut consumers – corporate, nonprofit, government and individuals alike – harmed by Marsh's illegal kickback schemes,"Blumenthal said. "Marsh concocted a free market mirage. In reality, it coerced insurers into a 'pay to play' scheme. Marsh was more concerned about getting the best concealed kickback, not the best deal for consumers."
Marsh's scheme violated the Connecticut Antitrust Act and the Connecticut Unfair Trade Practices Act, and increased insurance costs for Connecticut consumers because insurers funded the concealed commissions by raising premium rates.
According to the lawsuit, when a Marsh customer wanted to purchase insurance or renew insurance it already had, Marsh brokers decided which insurer should be given the business and at what price. Marsh's price was typically a substantial increase – as much as 15 to 20 percent – over the previous year's price. After Marsh decided who would win its bogus competition, all insurers were expected to fall into line to ensure the chosen carrier won the "competition."
One insurer wrote about a Marsh "broking plan": "This is another protection job… Our rating has risk at $890,000 and I advised (Marsh) that we could get to $850,000 if needed. (A Marsh broker) gave me song & dance that game plan is for AIG at $850,000 and not to commit our ability in writing!"
The amended complaint identifies several major Connecticut businesses that were harmed by Marsh's bid-rigging and price-fixing plan, including Hubbell, Inc., Kaman Corp., Hexcel Corp., and Bridgeport Hospital.
Marsh has about 2,800 policyholder clients in Connecticut – 300 of them large businesses or government entities. Its corporate clients here also include Bic Corporation, United Technologies Corporation, Carvel Corporation, Ethan Allen Furniture, Timex Corporation, Xerox Corporation and General Electric Company.
The company's state and municipal clients include the Connecticut Department of Administrative Services (DAS), and the cities and towns of Hartford, New Haven, Stamford, Manchester, West Hartford, and West Haven. Marsh was also the insurance broker for several large, publicly supported state construction projects, including Adriaen's Landing.
Marsh's nonprofit clients include Yale University, Mystic Seaport and the Save the Children Federation.
Blumenthal also announced that insurer ACE Financial Solutions, Inc. has agreed to pay $40,000 to the state to settle allegations for a scheme in which ACE paid Marsh a secret $50,000 commission to steer an $80 million state contract to the company.
"ACE has rightfully recognized the need to settle allegations that it paid to play – paying Marsh in exchange for business, but baking it into consumers' costs."
View the Marsh & McLennan Amended Complaint (PDF-148KB)
http://www.oag.state.ny.us/media_center/2004/oct/oct14a_04.html
INVESTIGATION REVEALS WIDESPREAD CORRUPTION IN INSURANCE INDUSTRY
Leading Brokerage Firm Sued for Fraud and Antitrust Violations; Insurance Company Executives Plead Guilty; Major Insurance Firms Implicated
Attorney General Spitzer today sued the nation's leading insurance brokerage firm, alleging that it steered unsuspecting clients to insurers with whom it had lucrative payoff agreements, and that the firm solicited rigged bids for insurance contracts.
Simultaneously, Spitzer announced that two insurance company executives have pleaded guilty to criminal charges in connection with the scheme.
The actions against the brokerage firm, Marsh & McLennan Companies, and the two executives stem from a widening investigation of fraud and anti-competitive practices in the insurance industry. Evidence revealed in today's lawsuit also implicates other major insurance carriers.
"The insurance industry needs to take a long, hard look at itself," Spitzer said. "If the practices identified in our suit are as widespread as they appear to be, then the industry's fundamental business model needs major corrective action and reform."
"There is simply no responsible argument for a system that rigs bids, stifles competition and cheats customers," he added.
Spitzer was joined at news conference announcing the actions by New York State Insurance Superintendent Gregory V. Serio, who said: "This has gone from an inquiry into failure to disclose compensation to an active investigation of bid rigging and improper steering. This certainly proves the adage that where there is smoke, there is fire."
The civil complaint filed today in State Supreme Court in Manhattan alleges that for years Marsh received special payments from insurance companies that were above and beyond normal sales commissions. These payments -- known as "contingent commissions" -- were characterized as compensation for "market services" but were, in fact, rewards for the business that Marsh and its independent brokers steered and allocated to the insurance companies. Industry representatives defend this long-standing practice as acceptable and even beneficial to clients, but the Attorney General's office has uncovered extensive evidence showing that it distorts and corrupts the insurance marketplace and cheats insurance customers.
In addition to steering business to its insurance company partners, Marsh, at times, solicited fake bids, which deceived its customers into thinking that true competition had taken place. Marsh did this even as it claimed in public statements that its "guiding principle" was to always consider its client's best interests.
Spitzer's complaint against the company cites internal communications in which executives openly discuss actions that were aimed at maximizing Marsh's revenue and insurance companies' revenues -- without regard to clients' interests.
For example, one senior Marsh executive sent a message to colleagues saying: "We need to place our business in 2004 with those [insurance companies] that have superior financials, broad coverage and pay us the most."
Another executive noted that the size of contingent commissions will determine "who [we] are steering business to and who we are steering business from."
Major insurance companies -- ACE, AIG, The Hartford and Munich American Risk Partners -- are named in the complaint as participants in steering and bid rigging. Other insurance companies are still under investigation.
The two executives pleaded guilty to participating in the illegal conduct and are expected to testify in future cases.
According to the complaint, Marsh collected approximately $800 million in contingent commissions in 2003. Spitzer's civil complaint seeks an end to the steering and bid rigging, disgorgement of improper payments, restitution and punitive damages.
The immediate victims of the illegal practices were Marsh's customers -- mainly large corporations seeking property and casualty coverage, but also small and mid-size businesses, municipal governments, school districts and some individuals.
Spitzer thanked the State Insurance Department for its cooperation in the joint investigation, which is continuing.
The investigation underlying today's civil action case was led by Assistant Attorneys General Matthew Gaul, Mel Goldberg, Michael Berlin, Maria Filipakis and Peter Bernstein, under the direction of David D. Brown IV, Chief of the Investment Protection Bureau, Jay Himes, Chief of the Antitrust Bureau and Terryl Brown Clemons, Acting Deputy Attorney General in Charge of the Public Advocacy Division.
Audrey Samers, Deputy Superintendent and General Counsel of the New York State Insurance Department, has coordinated that agency's activities with the Attorney General's office.
The criminal cases are being prosecuted by Assistant Attorneys General Whitman Knapp, Michael Roe and Nina Sass under the direction of Deputy Chief of the Criminal Prosecutions Bureau Kevin Suttlehan and Chief of the Criminal Prosecutions Bureau Janet Cohn, and the Deputy Attorney General in Charge of the Criminal Division, Peter B. Pope.
Attachments:
* Complaint
* Exhibits to Complaint
For Adobe PDF files you can download Adobe Reader from Adobe Systems.
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