James Grippando - A King's ransom

The lawyers introduced themselves, four for Quality Insurance, two partners and two senior associates. And then me. Judge Korvan seemed amused by the lopsidedness.

“You must be quite a lawyer, young man.”

Duncan said, “Excuse the crowd, Judge, but our client takes this case very seriously.”

“So does mine,” I said dryly.

Duncan met my stare, then looked away.

“Splendid,” said the judge, still wearing her patented smile. “Now that we’re all so serious, let’s get started.”

Duncan said, “This is basically an action by an insurance company to enforce the confidentiality provisions of a kidnap-and-ransom insurance policy. Matthew Rey is the insured, and his family claims he was kidnapped. Quality Insurance Company has denied coverage.”

“I gathered that from your papers. Explain what you’re asking the court to do.”

“Essentially we’re asking for a moratorium on any lawsuit that could have the effect of putting the kidnappers on notice that a dispute has arisen between Matthew Rey and his insurance company.”

“Let me get this straight. You want to deny coverage, and you want me to enter an order that prevents Mr. Rey and his family from suing you?”

“Only until Mr. Rey is released from his kidnappers. In addition, we ask that the court seal the record in this proceeding, so that this action filed by Quality Insurance does not become public knowledge.”

Judge Korvan made a face, confused. “Why is this such a big secret?”

“It’s customary for a kidnap-and-ransom insurance policy to prohibit the insured from disclosing that he has insurance. The object is to keep the insured from becoming a target and to prevent kidnappers from making exorbitant ransom demands.”

“I understand that. But once Quality Insurance has denied coverage, why should you care about secrecy?”

“In an ordinary fraud case we wouldn’t. But this is no ordinary case.”

“Enlighten me,” she said.

“Me, too,” I added.

“First of all, Quality Insurance company does not deny that Matthew Rey was kidnapped by rebels.”

“A wise concession,” I said, “given three dead bodies in Cartagena.”

“Mr. Rey, please. You’ll have your turn.”

“Sorry, Your Honor.”

Duncan continued, “If he had staged his own kidnapping, we could deny the claim and have nothing to worry about. But we believe that he is truly in the hands of some dangerous people. The basis for our denial of the claim is that the insured revealed to a third party that he had kidnap-and-ransom insurance. That alone voids the policy.”

“You’re not alleging fraud?”

“We believe there is fraud, but Quality Insurance doesn’t have to prove that much to invalidate the policy. All we have to show is that he told someone he had insurance.”

“So it’s your contention that Mr. Rey told someone he had insurance, and then what?”

“Clearly the kidnappers are in cahoots with someone who knew that Mr. Rey was insured for a ransom payment up to three million dollars. That someone is getting a cut of the three million dollars. A referral fee, if you will.”

“If the kidnappers already know about the insurance, then why do you need secrecy?”

“At this point it’s not the existence of the insurance policy that needs to be kept secret. It’s the denial of the claim. If the kidnappers find out that Quality Insurance Company is refusing to pay, Mr. Rey will be in serious danger.”

“Then pay the claim,” I said.

“Mr. Rey, enough,” said the judge.

“I’m sorry, Judge. But it’s impossible for me to sit quietly and listen to Mr. Fitz suggest that it’s in my father’s best interest for the court to enter an order that prohibits him from suing the insurance company that denied his claim.”

“You’ll have your turn,” she said sharply.

I backed off. Duncan continued, his tone indignant. “Quality Insurance Company has no obligation to pay this claim. That doesn’t mean we want to see Mr. Rey’s father murdered when the kidnappers find out that the insurance company is refusing to pay.”

“I see,” she said, as if finally catching on. “If a jury were ever to decide that your denial of the claim was wrongful, the last thing you want is his death hanging over your corporate head.”

“It wouldn’t be on our head, Your Honor. We had a meeting with Nick Rey in our office last week, and he made certain comments that led us to believe he was foolish enough to jeopardize his father’s safety by filing a lawsuit that would make our dispute public. If the court allows him to do that, it’s on his head. And with all due respect, Your Honor, it’s on yours as well.”

I glared but held my tongue. Duncan had managed to push the judge into my corner, so I didn’t have to speak.

“I don’t really care whom you wish to blame, Mr. Fitz. I still don’t see how your proposed moratorium works. You want me to prohibit Matthew Rey from suing until after his release from the kidnappers, correct?”

“Yes. Then, once he’s released, he can sue to his heart’s content, and a jury can decide whether the insurance company’s denial of coverage was justified.”

“Here’s the problem: How would the family ever pay the ransom to gain his release?”

“We can’t,” I said.

“They can,” said Duncan.

One of the associates from New York handed him a file. Duncan said, “I didn’t want to have to raise this issue in the context of this hearing, but the truth is, we’ve been in contact with the FBI.”

It was as if he’d punched me in the chest. Finally I was gaining some insight as to why the FBI had been breathing down my neck.

Duncan continued, “We have in our possession a detailed analysis-or perhaps ‘unwinding’ is a better term-of bank accounts that the FBI has traced back to Rey’s Seafood, Inc., a Nicaragua-based fishing company. Collectively, the cash on hand is close to ten million dollars.”

My jaw nearly dropped. The judge looked suspiciously at me, but she said nothing.

Duncan said, “Matthew Rey is a substantial shareholder of the company. I can list any number of banks that would loan three million dollars to anyone who can pledge cash assets of ten million as security.”

“Nicaraguan fishing company, huh?” she said, smirking at me. “What do you say to that , Counselor?”

“All I can say is that I’ve never seen this FBI financial investigation or analysis that Mr. Fitz is waving before the court.”

“It’s for real,” said Duncan. “I have here an authenticating affidavit from a supervisory special agent in the narcotics unit of the FBI’s Miami field office. His name is Sam Huitt.”

Agent Huitt, of course. I was wishing now that I hadn’t been so quick to rebuff Agent Nettles’s offer of the FBI olive branch.

“Thank you, Mr. Fitz. I believe I understand your position.” She turned and faced me. “Mr. Rey, what’s your response?”

I was almost reluctant to say anything, for fear of what other missiles might come flying out of the trial bags of my opposing counsel. “Your Honor, what I would like most is the time to prepare an intelligent response. By offering this FBI affidavit, Mr. Fitz has turned his request for a moratorium into an evidentiary hearing. I’ve had no chance to call witnesses on my own behalf and no opportunity to cross-examine any adverse witness.”

“How much time do you want?”

I thought quickly. My next communication with the kidnappers was less than three weeks away. I needed to have the insurance issue sorted out before then. “I’d like fifteen days.”

“I’ll give you ten.”

“Your Honor, my father is kidnapped. I have other time commitments.”