Wakaya Perfection sues insurer, counterclaim filed
Wakaya Perfection has sued their insurer, Liberty Mutual, for failing to uphold an insurance contract.
In answering Wakaya Perfection’s lawsuit, Liberty Mutual has turned around and filed a counterclaim.
Wakaya’s lawsuit was filed in an Ohio District Court. Unfortunately the case doesn’t appear on Pacer, so I’m unable to track all filings.
What I do have is Liberty Mutual’s answer to Wakaya’s complaint, along with their counterclaim.
Liberty Mutual claims Wakaya Perfection approached CAL Insurance & Associates for coverage on March 1st, 2016.
CAL Insurance & Associates (are) an independent entity who … had limited authority to solicit insurance policies on behalf of Liberty Mutual.
In their application, Wakaya requested their coverage be back-dated to February 21st, 2016.
The stated reason was Wakaya had an existing ‘insurance policy from CNA Financial Corporation that it wanted to cancel.’
What Wakaya didn’t tell Liberty Mutual, as they allege, is that on February 22nd Wakaya received a demand letter from Youngevity.
This would eventually spark Youngevity’s long-running lawsuit against the company.
The backdating process required
Wakaya to certify that it had no known losses from February 21, 2016 through March 3, 2016.
On or about March 3, 2016, (Todd) Smith, on behalf of Wakaya, executed a no known losses letter which stated that Wakaya was not aware of any threatened claims or potential losses from February 21, 2016 through March 3, 2016.
That representation was false.
Youngevity filed their lawsuit against Wakaya on March 17th, 2016.
As per Todd Smith’s own testimony, Liberty Mutual asserts he knew Youngevity was going to file suit prior to applying for insurance.
At the time Wakaya and Smith made the false representations, they were aware of their falsity as they had previously been put on notice on multiple occasions that Youngevity was threatening and planning to bring litigation against Wakaya and Smith.
Five months after Youngevity pursued them in California, Wakaya filed a claim with Liberty Mutual.
To date litigation between Youngevity and Wakaya has cost Liberty Mutual “several millions of dollars in attorney’s fees and costs”.
Liberty Mutual’s counterclaim challenges the validity of Wakaya’s insurance contract, on the basis it was applied for via false representation.
Liberty Mutual claims that the policies are void and unenforceable because of Wakaya and Smith’s material representations when applying for the policies.
Wakaya and Smith content that the policies are valid and enforceable.
Liberty Mutual are demanding at least $4 million in damages, as well as their own legal costs.
Liberty Mutual’s answer and counterclaim were filed on August 20th, 2019. Again, due to the venue, we’re unable to track the case internally ourselves.
Pending any updates we might receive on the outcome of Wakaya vs. Liberty Mutual, stay tuned…