November 08, 2004
Amy K. Spees
PAPER TRAIL - So Cal Lawyers garner $20 Million for Armenians
ABSTRACT:
For thousands of Armenian Americans, New York Life Insurance Co.'s $20 million settlement with beneficiaries of World War I-era policies was bittersweet.
For the first time, corporate America and the U.S. court system acknowledged a genocide that reportedly killed 1.5 million Armenians between 1915 and 1923 and is still disputed by the U.S. and Turkish governments.
And for three of the four attorneys representing the class of policyholders, the settlement was personal.
Southern California litigators Vartkes Yeghiayan, Brian Kabateck and Mark Garagos learned a lesson in genealogy, spiced with tales of sadness and survival, as they navigated archives of decades-old documents to compensate 2,300 beneficiaries.
On filing the lawsuit, Yeghiayan enlisted the help of William Shernoff.
Shernoff says he was brought into the litigation to negotiate with New York Life. "I knew the New York Life lawyers," Shernoff says. "Being in insurance bad faith as long as I have, I'd gotten to know John Holmes at Barger & Wolen and had a good rapport with him. I'm also the only non-Armenian of all the lawyers, and I brought an outside objective perspective."
Shernoff of Shernoff Bidart & Darras in Claremont, has represented a series of Holocaust survivors in suits to recover $5 billion in benefits from life insurance policies sold to their relatives.
Though the firm's latest case against the Italian insurer Assicurazioni Generali SpA was dismissed in October, the Holocaust litigation has set precedents for recovering unpaid claims and expanding U.S. statute-of-limitations laws.
Plaintiffs' lawyers enlisted state Insurance Commissioner John Garamendi to mediate negotiations. Garamendi met with New York Life's chairman on several occasions and held two settlement conferences in Los Angeles.
When the dispute was decided in January, Garamendi appointed a three-person panel to oversee claims and the $20 million distribution process that is underway.
One big issue left unresolved because of the settlement was the amount of interest or inflation to be attributed to the policies, Shernoff says.
"New York Life took the position that interest doesn't start until you file a claims," Shernoff says. "In our view, we felt that there wasn't anybody around to put in a claim--most of whole families were wiped out in small villages--so interest should run even though claims weren't filed."
Shernoff says the settlement, the first to be administered by the courts, adds a significant dimension to insurance bad-faith litigation.
Cases settled through independent commissions are "more or less controlled by the insurance companies, because they fund it," Shernoff says.
This settlement has the "appearance of being more fair and equitable," he says.
