Montgomery County sorting through lawsuits from two insurers
MONTGOMERY COUNTY Montgomery County’s new Legislature inherited a complex web of insurance disputes that it now must resolve.
When the nine legislators and County Executive Matt Ossenfort took their oaths Jan. 1, the county was already under the shadow of a million-dollar breach of contract lawsuit filed by its former health insurance broker, Pasquale “Pat” Baia.
Last week, Casper Wells, part owner of the agency previously responsible for Montgomery County’s commercial liability insurance, filed a notice of claim in preparation for his own breach of contract lawsuit, this one demanding a half-million dollars.
Wells, a Schenectady resident and father of professional baseball player Casper Wells, once worked with Amsterdam broker John Mancini. The two of them owned the Hays & Wormuth insurance agency, with Wells holding 40 percent and Mancini holding 60 percent of company shares.
The agency brokered Montgomery County’s $550,000 annual commercial liability insurance package for years, even as Mancini and Wells had a falling out and plunged into a legal battle that is still not resolved after nearly a decade.
With Hays & Wormuth on the edge of court-ordered dissolution, the old board of supervisors voted Dec. 17 to keep Mancini as the county broker of record, while ditching the Hays & Wormuth name.
Wells argues that move effectively cut him out of the deal, constituting a breach of contract.
“We were supposed to provide their insurance through 2016,” he said.
Legislature Chairman Tom Quackenbush said the old board was under the impression Hays & Wormuth no longer existed when they voted to keep Mancini on as broker.
Wells argues that while it is in the process of dissolving, his old agency has yet to fully vanish.
“It’s still going,” he said. “It’s still under contract with the county.”
Wells met with county leaders late last month before filing his notice of claim. Ossenfort received the actual paperwork recently.
“I don’t think he has basis for a claim,” he said.
Quackenbush agreed, saying Hays & Wormuth never actually had a contract.
“We handled this with a resolution,” he said, “not a contract.”
While they argue the county’s arrangement with Mancini does not constitute any breach of contract as Wells suggests, county officials nonetheless are looking for an exit strategy.
“I’m working on a request for proposals to hopefully get us a new broker next year,” said Ossenfort.
Mancini is president of Beacon Insurance, an agency owned in part by Pat Baia.
From 2007 to late 2012, employee health insurance for the county, the city of Amsterdam and several municipalities were bundled together in a health insurance trust. It operated like a small independent insurance company, collecting money from employees and paying out claims.
Baia, under the name of Benefits Marketing, originally helped build the trust and wrote himself into the contacts as a broker of record, receiving middleman fees.
When the old board dissolved the trust in favor of outside health insurance, he filed a lawsuit claiming breach of contract and demanding more than $1 million. That suit is still pending.
On Jan. 3, Montgomery County Treasurer Shawn Bowerman cut a $280,000 check to cover the first half of the year’s liability insurance premiums. Bowerman said Thursday he made the check out to Beacon, and Ossenfort signed it. So essentially, the county bought insurance through an agency owned in part by Baia, a man they’re fighting in court.
While Mancini said Baia makes none of the business decisions, Ossenfort is somewhat uncomfortable with the arrangement.
“It’s weird,” he said.
He hopes eventually to straighten out the tangled mess of insurance agreements and litigation that greeted the new Legislature.