Legal arguments and witness testimony continued this week in the trial to award damages to several plaintiffs countersuing Sagicor General Insurance Ltd in relation to a controversial Hurricane Ivan insurance claim involving Windsor Village.
Loss adjuster and project manager Alastair Paterson, who is also a plaintiff in the countersuit case, testified he first met Frank Delessio in the mid 1990s.
He said he had been commissioned by his employer, Delloite and Touche, to find out Delessio’s immigration status.
Paterson said this led an already abrasive Delessio to become hostile.
In 2004, when Hurricane Ivan hit the Cayman Islands, Paterson was running his own business, Crawford Adjusters. He said he had always had a good relationship with Cayman General Insurance, which was then owned by the Cayman National Corporation and later purchased by Sagicor General Insurance Ltd.
Paterson testified that this good relationship continued until 15 June, 2005, when Delessio returned to the Cayman Islands to assist Cayman General with claims in the aftermath of the storm.
Paterson said he was reporting to Danny Scott and other members of the insurance company’s team. However, after the arrival of Delessio, Paterson said he was told to report directly to him.
He said this is where the problems began, as Delessio would not accept his unit rate method of valuation and insisted on a cost plus analysis.
This apparent rift culminated in a writ being filed in 2006 by Cayman General Insurance against Patterson and the Hurlstones, alleging them of fraud.
According to court documents, Paterson expressed that he thought this was the perfect vehicle for Delessio to exact his revenge for the immigration incident.
On the verge of trial last December, Sagicor General Insurance – which by this time had replaced Cayman General as the plaintiff in action, decided not to proceed. However, a countersuit by John and Robert Hurlstone, Hurlstone Ltd, Alastair Paterson, Bould Patterson Ltd, Crawford Adjusters (Cayman) Ltd. and Hurlstone General Contractors proceeded.
The countersuit was successful and $943,000 in damages has already been awarded to the plaintiffs.
Attorneys say costs are expected to amount to several million dollars.
Sagicor only bought shares in Cayman General Insurance after the events alleged in the original lawsuit took place. It eventually bought all of Cayman National Corporation’s 75 per cent interest in the insurer.
The Cayman Islands Government also owns a little more than 24 per cent of Sagicor General. This is as a result of a negotiated settlement it made with Cayman General Insurance with regard to its Hurricane Ivan claim on damages to government properties.
In last December’s trial, Justice Alexander Henderson made an order of discovery to determine whether Cayman National Corporation had given an indemnity to Sagicor General Insurance with regard to liabilities arising from the lawsuit.
However, it is still not clear through this point in the proceedings who will be liable for damages, as the evidentiary document relating to possible exemption of liability for Sagicor was apparently redacted.
Whether Cayman National Corporation, by way of its past ownership of Cayman General, is liable to any extent or whether Sagicor has essentially purchased this liability remains to be established. According to Thomas Lowe QC, attorney for the Hurlstones in the case a totally separate proceeding could ensue as a result.
Through court proceedings, it has come to light however, that to date, Cayman General Insurance/Sagicor has spent more than $8 million on an initial insurance claim of $6.5 million; 1 million of which would have been paid by the Windsor Village Strata Committee.
From that original claim, $3 million was paid out through Alastair Paterson. This would have left Cayman General with only $2.5 million left outstanding.
However, two weeks after the arrival of Mr. Delessio, the court heard that Paterson and the Hurlstones were banned from the Windsor Village site.
Another contractor was then hired and paid on a cost plus arrangement.
At the completion of work, sources say that M and J Contractors was paid $5.5 million, which was $3 million over the estimated $2.5 left on the claim.
In determining damages, several witnesses have testified about business deals that could not be pursued with the Hurlstones because of a court ordered Mareva injunction restricting access to their assets.
In addition, Paterson’s businesses and reputation were said to have suffered greatly.
Witnesses testified about Mr. Paterson’s good standing in the community and how the proceedings have caused a man once in high demand to now be avoided.
The court erupted into laughter as those in the gallery heard how a private investigator was hired to conduct surveillance on Paterson from a plot of open land that is actually owned by co-plaintiff in the case Robert Hurlstone.
Proceedings are expected to run past the two weeks scheduled. However, dates for completion have not yet been set.
Mr. Delessio took his own life earlier this year.