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Collection Agency’s Insurance Company Sued For Acting in Bad Faith

The plaintiffs who were awarded a $267 million judgment against a collection agency that was found guilty of violating the Telephone Consumer Protection Act by making calls to individuals’ cell phones without their prior consent have now filed suit against the agency’s insurance company, alleging it acted in bad faith.

A copy of the complaint in the case of Perez v. Indian Harbor Insurance Company, X.L. America, Inc., and XL Group, Ltd. can be accessed by clicking here.

In May, a jury found the defendant guilty of making more than 500,000 calls in violation of the TCPA. There were four classes of individuals — two involving those who received skiptracing-related calls or pre-recorded messages and two involving individuals who were not debtors and not being sought after by the defendant for collection but received calls on their cell phones or pre-recorded messages.

The plaintiffs are essentially suing on behalf of the collection agency to force the insurance company to pay out the $267 million that was awarded in the case. The plaintiffs allege that the insurance company breached provisions of its own contract with the collection agency by rejecting at least four offers to settle the case before it went to trial, walking out of mediation without making a settlement offer, and by refusing to negotiate for more than two years before the case went to trial.

In filing the suit, the plaintiffs are seeking $267 million plus interest and attorney’s fees.

The plaintiffs have agreed not to seek execution of the judgment on any asset or property of the collection agency in exchange for the agency assigning all claims and causes of action that the agency may have against its insurance company as well as agreeing to testify on behalf of the plaintiffs should this case go to trial.

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