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Whoops: Insurer can’t get mistaken double payment back


An insurer that accidentally paid a $1 million settlement twice is having a hard time getting its money back.

Atlantic Specialty Co., a unit of OneBeacon Insurance Group Holdings Ltd., had agreed to pay $1 million to settle litigation filed by the owner of a Stockbridge, Georgia, barbeque restaurant against the city of Stockbridge, according to court papers filed April 28 in U.S. District Court in Atlanta in Atlantic Specialty Insurance Co. v. Arick Whitson et al. 

The underlying litigation involved claims the restaurant owner made that he had been targeted for official harassment after he refused to comp a city controllers’ $60 bill, according to a news report.

In April, under the settlement agreement, Atlantic initiated a transfer of $1 million to Mr. Whitson’s bank account via the Automated Clearing House. Later that day, defendant counsel informed the insurer the settlement payment should have been made by wire transfer.

The insurer immediately took steps to stop the ACH transfer and, believing it had successfully done so, wired a second, $1 million payment to Mr. Whitson’s bank account. Separately, it sent other funds to defendants and a law firm. 

When it learned the original transfer had been made, it made several attempts to recover the original, $1 million payment, but has received no response from the owner, despite the insurer’s assurances no fees would be incurred in connection with a repayment.

The attorney for the owner and restaurant said he would return the funds if he had them, but they were sent directly to Mr. Whitson and he no longer represented them.

The lawsuit filed with the court seeks the $1 million repayment, pre- and post-judgment interest and attorneys fees.





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