Seventeen years after it started, a multimillion-dollar insurance dispute between the state of Florida and a Nebraska company continues to meander through the courts.
The Nebraska Supreme Court has already ruled on aspects of the case four times, and the primary defendant, David Fulkerson, died in 2009. But none of that has ended the lawsuit that began in 1998, and it could continue far into the future.
That’s a contrast to the goal of Nebraska’s courts of having jury verdicts in civil cases within 18 months of their filing, according to the National Center for State Courts.
Chris Welsh, president of the Nebraska Association of Trial Attorneys, said the case stands out.
“In Nebraska, they do a pretty good job of moving cases along,” Welsh said.
Numerous appeals help explain the length of the case, but lawyers said there were other factors, too.
“This thing has really gotten uglier and uglier and uglier,” said attorney William Gast, who represents the Fulkerson family and Countrywide Insurance Agency.
The case centers on the relationship between Fulkerson’s former company, Countrywide Insurance Agency, and an insurance company that Florida regulators took control of in 1997, United Southern Assurance.
Fulkerson’s company had been selling insurance policies as an agent for United Southern and was supposed to send the premiums to United Southern. When Florida officials ordered United Southern to stop writing insurance policies in 1997, Countrywide did not hand over four months of premiums.
In a 2006 judgment that was later overturned, Fulkerson was ordered to repay $2.23 million in premiums and pay $2.44 million in interest, which continues to accrue.
The Fulkerson family denies any money was taken fraudulently. Gast has argued the missing premium money was either returned to customers or applied to new insurance policies with a different company.
But Florida regulators haven’t accepted Fulkerson’s explanations and maintain the money owed to United Southern must be repaid.
“The other side has been terribly tenacious and very imaginative with all the reasons why they didn’t pay the money,” said Omaha attorney Robert Craig, who represents the state of Florida in the case.
In 2012, Fulkerson’s widow filed for bankruptcy to try and protect the family’s remaining assets, but now those are all being held by the court. Fulkerson’s widow is living on Social Security, Gast said.
In the past six months, lawyers on both sides of the case have asked a judge to sanction the opposing counsel for wasting the court’s time with frivolous motions.
A hearing is scheduled in a different court next month on a motion asking another judge to hold the plaintiff – Florida’s Insurance Department – and its lawyers in contempt.
Craig blames Gast’s numerous motions and appeals for the delays in the case.
The Nebraska Supreme Court ruled in 1999 that the trial judge was wrong to issue a judgment against Fulkerson and Countrywide. Then in 2005, the court ruled it didn’t have jurisdiction to evaluate whether the trial judge should have recused himself from the case.
The court also ruled a jury, not the judge, should have decided the case in 2006. And then it issued another ruling in 2009 clarifying how the case should proceed.
Both sides are now waiting for a ruling on a new trial that could determine whether the Fulkerson family owes anything to Florida regulators.
But regardless of what the judge decides, more appeals are certain to follow.
“There’s no doubt that if we’re successful that the other side will appeal it,” Craig said. “They’ve appealed everything.”
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