Insurer Rebuts Va. GOP Lawsuit

By | August 7, 2005

A state Republican Party lawsuit seeking nearly $1 million from an insurance company that refused to cover the GOP after Democrats sued over partisan eavesdropping is frivolous, the insurer contends in a court filing.

Union Insurance Co. has asked the U.S. District Court in Richmond to dismiss the Republican Party of Virginia’s lawsuit and order the party to pay the insurer’s costs and lawyers’ fees.

“The more I get into this, the more frivolous it seems,” said Christopher C. Spencer, the Richmond attorney representing the Lincoln, Neb.-based company.

The lawsuit argues that from the beginning, RPV had no legitimate expectation that its liability insurance would cover illegal political espionage that resulted in criminal convictions against the state GOP’s two former top officers.

Using a phone number and pass code a former state Democratic Party staffer provided him, RPV executive director Edmund A. Matricardi III secretly monitored two private conference calls in late March 2002 among Democratic legislators and, for a time, Gov. Mark R. Warner. The state GOP chairman, Gary R. Thomson, also listened to a portion of one of the calls.

The Democrats were discussing a legal challenge to the 2001 Republican-drawn reapportionment plan.

Matricardi and Thomson each pleaded guilty to a single federal count in the scandal that rocked the party and continues to disrupt its fund-raising efforts.

According to federal and state campaign finance records, RPV reported about $68,000 on hand as of June 30 compared with slightly more than $810,000 for the Democratic Party of Virginia.

The Democrats sued in federal court on March 19, 2004, alleging their privacy rights had been violated. Exactly two weeks later, Union told RPV that its policy did not cover the misdeeds alleged in the Democrats’ suit and denied the party’s claim.

In December, the GOP paid a $750,000 settlement to the Democrats. As of June 30, the GOP still owed $55,500 of the $200,000 in lawyers’ fees it incurred battling the Democrats’ lawsuit, according to state campaign finance records.

Spencer said he was mystified at the timing of the GOP’s lawsuit against Union — filed July 18, not four months before election day in a hotly contested race for governor — “because the insurance company denied coverage a long time ago.”

“You would think that if there was any merit to their position, they would have disputed the company’s decision right then,” he said.

RPV’s executive director, Shawn Smith, said he could not comment on legal issues.

Bryan K. Meals, a Norfolk attorney representing RPV, said Spencer’s response is nothing out of the ordinary.

“They recognize the case will be decided upon the merits,” Meals said.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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