No. FST CV 095013292 S
July 30, 2010
MEMORANDUM OF DECISION RE Application for Temporary Injunction
This action is brought by Roger Sevigny, Commissioner of Insurance for the State of New Hampshire in his capacity as liquidator of the Home Insurance Company (Home). The defendant Silvia Kuehl is a plaintiff in a legal malpractice action brought on her behalf, and as Executrix of the Estate of her deceased husband Guenther Kuehl, entitled Kuehl v. Koskoff et al, pending in this court with the Docket No. FST CV 99 0171076 ( Koskoff action). Sevigny seeks a temporary injunction requiring Silvia Kuehl to hold in escrow a certain portion of any proceeds she receives as judgment or settlement in the Koskoff action on the basis of a settlement agreement she reached with Home in a case brought against the owner of a motor vehicle involved in an accident in which Guenther Kuehl died.
That settlement agreement, which called for a payment of $1 million to Silvia Kuehl stated "as further consideration . . . Silvia Kuehl agrees to pursue Workers' Compensation claims and/or claims for unfair trade practices or extra-contractual damages arising out of bad faith or tortious conduct exhibited by the Travelers Insurance Company in its investigation, handling or denial of the workers' compensation benefits claim made by Guenther Kuehl, the Estate of Guenther Kuehl and/or Sylvia Kuehl. Any recovery, by settlement, judgment or otherwise, that is made by or on behalf or Sylvia Kuehl, on her claims individually or on her claims in her representative capacity or on behalf of the Estate of Guenther Kuehl against this Travelers Insurance Company, in any forum, on account of said claims will be divided as follows: fifty percent, (50%), of said gross recovery(ies), less fifty percent of any costs and expenses of litigation, not including attorneys fees, approved by the Home Insurance Company, or its successors or assigns, including the Risk Enterprise Management, Ltd., will be paid, contemporaneously with the first contribution of said recovery(ies), to the Home Insurance Company, or its successors or assigns, including the Risk Enterprise Management, Ltd., and the balance of the recovery will be divided between the Estate, Sylvia Kuehl and counsel as they may agree. However, in no event will the total amount of funds paid to the Home Insurance Company, or its succors or assigns, including the Risk Enterprise Management, Ltd., exceed two hundred thousand dollars ($200,000.00) after deduction for its share of costs and expenses of litigation as described above."
Sevigny contends that the pending Koskoff action contains malpractice claims that include and subsume former claims for workers' compensation benefits payable by Travelers, and therefore, part of any settlement in the Koskoff action payable to Silvia Kuehl must be shared pursuant to the above agreement. In addition, Sylvia Kuehl has pursued workers' compensation benefits directly from Travelers, so far without success.
In his application for injunctive relief, Sevigny contends that Silvia Kuehl has rejected efforts by Home to participate in settlement discussions with Travelers and with the Koskoff action defendants. This allegation appears to be supported by correspondence from Kuehl's former attorney. Ex. 5 to Plaintiff's Application.
At the hearing on this application on June 1, 2010 Sevigny presented testimony confirming his standing to pursue claims on behalf of Home as its legally appointed liquidator, and authenticating the agreement between Home and Silvia Kuehl. Exs. 1, 2; see chapter 402-C:25 New Hampshire State Statutes. Sylvia Kuehl presented testimony that Home had made no claim against the Estate of Guenther Kuehl. At the close of the hearing counsel for both parties were permitted until July 1, 2010 to file briefs supporting their positions and until July 12, 2010 to file any reply briefs. Sevigny's brief was filed timely and on July 12, 2010, Sevigny moved to preclude any filing by Silvia Kuehl who by that time, and until today, has filed no papers.
The primary purpose of a temporary injunction is to preserve the status quo and protect the moving party from immediate and irreparable harm until the merits of the case have been determined after a full trial. Olcott v. Pendleton, 128 Conn. 292, 295 (1941). To be entitled to the equitable relief of a temporary injunction, the moving party must show that: (1) it is likely to prevail on the merits of its claim after trial; (2) it faces immediate and irreparable harm absent an injunction; and, (3) the harm it faces without the injunction is greater than the harm an injunction would do to the defendants. Griffin Hospital v. Commission on Hospitals Health Care, 196 Conn. 451, 456-58 (1985); see generally Fleet National Bank v. Burke, 45 Conn.Sup. 566, 570 (1998) [ 28 Conn. L. Rptr. 516]; Pop Radio v. News-America Marketing In-Store, Inc., 49 Conn.Sup., 566-69 (2005) [ 40 Conn. L. Rptr. 332]; General Reinsurance v. Arch Capital, Superior Court, judicial district of Stamford-Norwalk at Stamford, Complex Litigation Docket, X05 CV 07 4011668 (October 17, 2007, Adams, J.) [ 44 Conn. L. Rptr. 366]. In this case, the court finds there is merit to Sevigny's claims, particularly in light of the complete absence of any defense or any argument offered by Sylvia Kuehl. If there are reasons why her agreement with Home is unenforceable, or reasons why monies that may be collected from the Koskoff action or workers' compensation claims are not subject to the agreement, they have not been made known to the court. The court concludes that an order requiring Sylvia Kuehl to hold in escrow until this action is resolved a portion of any amount received pursuant to her claims described above, imposes far less potential harm on her than the lack of such an order would impose on Sevigny in his role as liquidator.
Therefore, this court, having heard the parties, will issue the injunction order as proposed by the plaintiff in his application.