A Los Angeles insurance agent is suing a Louisiana-based insurance company, alleging an illegal clause in their business agreement.
Robert Moreno Sr., doing business as Robert Moreno Insurance Services (RMIS) filed a lawsuit Aug. 7 in U.S. District Court for the Central District of California, Southern Division against Americas Insurance Company (AIC) and John Does 1-10 inclusive, alleging that a part of their business contract is illegal under California law.
The complaint says RMIS was contracted as a managing general agent for AIC and during the time reinsurance agreements were being provided to RMIS, AIC cut the runoff ceding commission to 5 percent. This low commission would require RMIS to pay out of pocket for AIC’s fees and cause them to operate at a loss, the suit states.
RMIS argues this net loss is illegal under the California Insurance Code. The suit also states AIC failed to provide a second reinsurance agreement, covering June 1, 2014, through June 1, 2015, until May 5, 2015. The plaintiff learned at that time AIC had still retained this illegal commission structure.
RMIS seeks a judgment against the enforceability of this part of the agreement, unspecified compensatory damages, costs of suit and other relief deemed appropriate by the court. The company is represented by attorneys Robert W. Barnes and Andrew V. Jablon of Resch Polster & Berger in Los Angeles.
U.S. District Court for the Central District of California, Southern Division case number 2:15-cv-05290-MLCF-KWR.