A Santa Barbara County jury found that Starr Indemnity & Liability Company acted in bad faith and with malice and oppression when it refused to pay an insurance claim submitted by Passport 420, LLC, its policyholder. (Passport 420 LLC et al vs Starr Indemnity & Liability Co. et al, Santa Barbara Superior Court, 19CV03596).
Passport’s jet was seized in April 2019 in connection with a federal criminal indictment of disgraced and now-imprisoned attorney Michael Avenatti. Passport made a claim under the government seizure provision of its insurance policy with Starr, but Starr denied the claim. It asserted that because Avenatti used stolen law firm client money to buy his interest in the jet, there was no coverage under its policy.
Lawrence Conlan, lead trial counsel for Passport said the jury found otherwise; it held Starr liable under the $4 million policy, and it awarded an additional $15 million in punitive damages for Starr’s misconduct. Conlan explained that “after years of textbook insurance company delays and waste, we proved that Starr was wrong to deny responsibility to Passport. The message is clear – for those who try to hide their own misconduct behind Avenatti’s bad acts, there is no shelter.”
Richard Lloyd, who tried the case with Conlan, added “Starr was dead wrong to argue that the claim was not covered and that it acted reasonably. As we’ve said all along, and the jury agreed, Starr must pay.”
