Claim in plane crash is denied
Insurance broker won’t pay workers’ comp
Memphis insurance broker Lipscomb & Pitts has denied responsibility for paying a workers’ compensation death claim in a response to a lawsuit was filed last month.
Zurich American Insurance Company filed the lawsuit against Lipscomb & Pitts and Sunshine Enterprise on March 13. In it, Zurich said it too should not be responsible for paying the claim following a plane crash that killed Sunshine Enterprise CEO Wei Chen and three other company executives.
Zurich’s lawsuit asked a judge if the claim should be voided or if Lipscomb & Pitts, which connected Sunshine to Zurich, should be held responsible.
The lawsuit hinges on a question in the insurance application that asked: “Does applicant own, operate or lease aircraft/watercraft?” Although Chen is a pilot and owns a plane, Sunshine Enterprise answered “no,” Zurich’s complaint said.
Zurich says answering no was a false claim that made it impossible for Zurich to accurately assess the risk of providing insurance. It said Lipscomb & Pitts also held some responsibility for brokering the deal that included false information.
In the response filed Monday, Lipscomb & Pitts said it was never hired to broker pilot insurance or aircraft insurance and that Zurich was attempting to pass the buck for its own errors to avoid paying the claim.
“Lipscomb correctly handled all aspects of the workers’ compensation coverage application process,” the response said. “In like manner, Zurich correctly handled that work for the year 2015. However, Zurich’s underwriters made errors in connection with the underwriting for the renewals of Sunshine Corporation’s workers’ compensation coverage.
“Zurich is now trying to blame Lipscomb for Zurich’s error, and use them as a reason not to pay a claim related to Sunshine Corporation. Lipscomb is in no way at fault for any such errors and as a result, it expressly denies any liability in connection with the claims brought herein by Zurich.”
In a counterclaim, Lipscomb & Pitts went on to say Sunshine Enterprise did not submit false information at all. It said the plane was owned by Chen Aircrafts, LLC, a company separate from Sunshine Enterprise.
It said Sunshine Enterprise correctly answered the question at the center of the lawsuit when it said it did not own, operate or lease an aircraft.
Lipscomb & Pitts asked a judge to rule in its favor and also asked that Zurich be responsible for any legal fees incurred while defending itself against the lawsuit.
Attorneys for Sunshine Enterprise have not filed a response to the lawsuit, court records show. When the lawsuit was filed, Mike Mcannally, who was not on the plane when it crashed in December and has taken on the role of CEO, declined to comment on a pending lawsuit.
Desiree Stennett covers economic development and business at The Commercial Appeal. She can be reached at desiree.stennett@commercialappeal. com or 901-529-2738.