Florida Regulator Wants Dallas National Vendetta Lawsuit Dismissed

Florida Insurance Commissioner Kevin McCarty is back in federal court looking to end a legal battle with the Texas-based Dallas National Insurance Co. and its owner Charles David Wood, who claims the commissioner denied his insurer a license to operate in Florida due to a personal vendetta against the company.

McCarty and his lawyers filed a motion to dismiss the suit on the grounds the U.S. District Court for the Northern District of Florida doesn’t have the jurisdiction to hear the case since it involves a matter already decided by a state court.

Dallas National and its owner, Charles David Wood, filed the vendetta suit with the federal court but since then a state court, Florida’s First District Court of Appeals, has upheld McCarty’s decision to deny the insurer application to write workers’ compensation in Florida.

In the federal suit, Woods accused McCarty of trumping up charging, among other things, that Dallas National was an illegal fronting operation for another Wood-owned company, Companion Property & Casualty Co. Although an administrative law judge ruled that the relationship between Dallas National and Companion is not a fronting operation, McCarty continued to stand by the claim. Florida’s First District Court upheld his decision, although it didn’t comment on the particular charges.

Woods charged that McCarty was unfairly denying it a license due to Wood’s involvement with the St. Petersburg, Florida-based Bankers Insurance Co. In 2001, Woods had agreed to lend Bankers $5 million as part of a deal to get workers’ compensation coverage for one of the staffing firms he owned. Although the deal fell through, Woods charged that McCarty singled out his company for his association with the insurer.

In the mid-1990s, when McCarty was a regulator in the then Florida Department of Insurance, Bankers Insurance hired a private detective to illegally tap his phone and assemble a dossier on his private life hoping to have McCarty removed from his position as liaison with the state’s Property and Casualty Joint Underwriting Association. At the time, Bankers was the sole claims administrator with a $16 million contract that was under review. McCarty later filed a suit against the company and received a $2.5 million settlement.

The state’s Office of Insurance Regulation issued a statement shortly after Wood’s filed the saying it is, “confident the trial court will ultimately determine the allegations in the lawsuit are frivolous and without merit.”

Topics Lawsuits Florida