Liberty Mutual had sued in a breach of contract action on behalf of its predecessor, Wausau, to recover workers' compensation premiums due from an employer (LcL Administrators).
The policy had included language that made premiums variable depending on the company's claims record from year to year.
In response to the breach of contract lawsuit, the employer filed an answer and cross-complaint claiming Liberty Mutual had mishandled claims.
When Liberty Mutual propounded "simple, straightforward interrogatories, asking for witnesses, documents and evidence to support [the defendant's] affirmative defenses and cross-claims," all it got was "vacuous, meaningless responses" (quoted from the appellate court's decision).
Finally, the trial court granted Liberty Mutual's request for "terminating sanctions" based on the defendant's lack of good faith during the discovery process and struck the defendant's answer and cross-complaint entirely.
This in turn resulted in a default judgment against the company to the tune of $518,000 in past premiums due.
In this certified-for-publication decision issued last week, the Third District denied each of the employer's appellate claims and affirmed the huge default judgment against it (and went on to grant Liberty Mutual costs on appeal... ouch)!
"Given LCL's months-long lack of cooperation in providing straightforward information, witnesses and documents to support its claims of malfeasance, the trial court could reasonably conclude that the ultimate sanction was appropriate."
The case is Liberty Mutual Fire Ins. v. LCL Administrators.
To read the opinion,
PLEASE CLICK HERE.
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