Boxing match at hotel leads to boxing match in court

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Two insurance companies duked it out in court over injuries to a participant in a boxing match 15 years ago, leading to a $3.1 million defense verdict.

Last week a jury determined that insurance company Chapman-Sander and its agent Tom Bormann were off the hook for a 2002 jury verdict resulting from a personal injury suit.

That verdict stemmed from a January 1999 boxing match at the Regal Riverfront Hotel in St. Louis. Then-23-year-old journeyman boxer Fernando Maldonado was paid $1,000 to fight a much higher-ranked boxer. He was KO’d during the match, then lost consciousness later after returning to his dressing room. There was no ambulance on site, and it took 90 minutes for him to get to the hospital.

After the verdict was affirmed on appeal, Liberty Mutual, the hotel’s insurance company, ultimately paid out $6.8 million because the event insurance carrier Chapman-Sander had a clause excluding athlete injury from coverage. Excess carrier National Union Fire Insurance paid its portion of the original verdict.

That is when the real fight began. The hotel and its insurance company thought fight promoter Doug Hartmann; his company, Doug Hartmann LLC; his insurance company Chapman-Sander and its broker, Tom Bormann; and excess carrier Lexington Insurance should reimburse that payout. They filed suit in 2004 in St. Louis County.

The Missouri Court of Appeals Eastern District upheld a summary judgment for Lexington Insurance in 2008, and in order to finalize the decision, the hotel dismissed Chapman-Sander and Hartmann without prejudice.

After the hotel and its insurer lost their case against Lexington, they reinstituted their case against Chapman-Sander and Bormann. The big left hook here? In lieu of reinstating Hartmann to the case, Hartmann, the hotel and its insurance provider entered into an assignment agreement. The hotel agreed to try to collect its judgment against Hartmann from Chapman-Sander and Bormann. Hartmann had effectively switched sides.

There was discussion of mediation in 2012, but the companies were too far apart, said Bob Tucker, an attorney for Chapman-Sander. No settlement was discussed, said Debbie Champion, an attorney for the hotel.

“It was all or nothing,” Champion said.

The case went another round. Hartmann claimed that when he procured event insurance from Chapman-Sander, he requested liability coverage for the athletes, and Chapman-Sander failed to supply it. Summary judgment in the insurance company’s favor was entered by the appellate court in 2011, and then appealed to the Missouri Supreme Court. The high court sent the case back down to be re-evaluated in light of the recent ruling in Emerson Electric Co. v. Marsh & McLennan Cos., which dealt with an insurance broker’s fiduciary duty.

The Eastern District ruled in 2013 that there was still a question as to whether Hartmann had actually requested liability insurance for the athletes and Bormann had given him the wrong policy, or if he had never clarified what he wanted. That material question of fact was to be answered by a jury, the panel decided.

“It was interesting because previous court action had been on whether or not there was negligence, whether there was a breach of contract. The trial boiled down to factual proof,” Champion said.

As they prepared for trial, a partial summary judgment eliminating the hotel’s claim to interest on the original settlement, totaling $3.7 million, was granted, leaving only $3.1 million in damages to be decided at trial July 7.

Ultimately, Champion said, the jury determined the coverage for the boxers did not exist, and when Hartmann ordered insurance for the event, he did not understand what he needed and never clarified that with Bormann.

It’s still not clear whether the companies are ready to shake hands and leave the ring.

“I can’t imagine there is going to be an appeal. The judge gave the plaintiffs most of they wanted in rulings, so they really don’t have anything to complain about,” Tucker said.

Champion, though, seemed prepared to go another round.

“I don’t know how much I can say,” Champion said. “This case may go up on appeal.”

Defense verdict

Breach of contract 

Venue: City of St. Louis

Case number/date: 0822-CC08104-01 July 15, 2014

Judge: Dennis M. Schaumann

Caption: Gateway Hotel Holdings Inc., Richfield Hospitality Services Inc. and Richfield Holdings Inc., Liberty Mutual Fire Insurance Company and Liberty Mutual Group v. Chapman-Sander Inc. and Tom Bormann

Plaintiff’s attorneys: Debbie Champion and Victor Essen, Rynearson, Suess, Schnurbusch & Champion, St. Louis

Defendant’s attorneys: Bob Tucker and Ellen Siegel, Goffstein, Raskas, Pomerantz, Kraus & Sherman, St. Louis