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Zurich prevails in dispute with former broker

Posted On: Oct. 16, 2018 1:21 PM CST

Zurich prevails in dispute with former broker

A federal appeals court has upheld a default judgment in Zurich American Insurance Co.’s favor against one of its former brokers, in which the broker is charged with failing to remit more than $430,000 in insurance premiums.

Rosemead, California-based Sealink Insurance Services Corp. and individuals associated with it had entered into an agreement to become an independent insurance broker for Schaumburg, Illinois-based Zurich in April 2008, according to the 2016 complaint filed in U.S. District Court in Los Angeles in Zurich American Insurance Co. v. Sealink Insurance Services Corp; Phann Gelinda Keo; et al.

The complaint charges that within the previous two years, the defendants collected $420,261.21 in premiums from insureds that had not been remitted to Zurich.

The District Court entered a default judgment in Zurich’s favor in the case, which was unanimously upheld by a three-judge panel of the 9th U.S. Circuit Court of Appeals in San Francisco in Monday’s ruling.

“Defendants have no meritorious defense to Zurich American Insurance Company’s breach of contract claim,” said the ruling. “They point to the lack of a written agreement and argue that the ‘contract at issue does not exist.’

“However, they do not dispute that Sealink sold insurance policies issued by Zurich in exchange for Sealink’s remittance of premiums and there is ample evidence of an agreement governing that arrangement,” said the ruling, in upholding the lower court’s decision.