Case 1:21-cv-04585 Document 1 Filed 08/13/21 Page 1 of 6 PageID #: 1
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
`---------------------------------------------------------------- x
` Civil Action No.: 1:21-cv-04585
`American Zurich Insurance Company,
`
`Plaintiff,
`
`vs.
`
`
`
`Meadow Park Rehabilitation & Health Care Center
`LLC,
`
`
`Defendant.
`---------------------------------------------------------------- x
`
`
`COMPLAINT
`
`
`
`Plaintiff American Zurich Insurance Company (“Zurich”) hereby files its complaint against
`
`Defendant Meadow Park Rehabilitation & Health Care Center LLC (“Meadow Park”) and states
`
`as follows:
`
`INTRODUCTION
`
`1.
`
`This is a breach of contract action. Zurich seeks money damages arising out of
`
`Meadow Park’s liability to Zurich for unpaid retrospective premium totaling $470,191.00, which
`
`amount is due to Zurich under workers’ compensation insurance policies.
`
`2.
`
`Meadow Park is a Named Insured under the policies that received benefits of the
`
`insurance coverage provided by Zurich. Meadow Park is liable for the retrospective premium
`
`obligation under the express terms of the policies at issue.
`
`PARTIES
`
`3.
`
`Plaintiff Zurich is an Illinois corporation with its principal place of business in
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`Schaumburg, Illinois.
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`4.
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`Defendant Meadow Park is a New York limited liability company with its principal
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`place of business in Flushing, New York.
`
`
`
`92509759v.7
`
`
`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
`---------------------------------------------------------------- x
` Civil Action No.: 1:21-cv-04585
`American Zurich Insurance Company,
`
`Plaintiff,
`
`vs.
`
`
`
`Meadow Park Rehabilitation & Health Care Center
`LLC,
`
`
`Defendant.
`---------------------------------------------------------------- x
`
`
`COMPLAINT
`
`
`
`Plaintiff American Zurich Insurance Company (“Zurich”) hereby files its complaint against
`
`Defendant Meadow Park Rehabilitation & Health Care Center LLC (“Meadow Park”) and states
`
`as follows:
`
`INTRODUCTION
`
`1.
`
`This is a breach of contract action. Zurich seeks money damages arising out of
`
`Meadow Park’s liability to Zurich for unpaid retrospective premium totaling $470,191.00, which
`
`amount is due to Zurich under workers’ compensation insurance policies.
`
`2.
`
`Meadow Park is a Named Insured under the policies that received benefits of the
`
`insurance coverage provided by Zurich. Meadow Park is liable for the retrospective premium
`
`obligation under the express terms of the policies at issue.
`
`PARTIES
`
`3.
`
`Plaintiff Zurich is an Illinois corporation with its principal place of business in
`
`Schaumburg, Illinois.
`
`4.
`
`Defendant Meadow Park is a New York limited liability company with its principal
`
`place of business in Flushing, New York.
`
`
`
`92509759v.7
`
`
`
`Case 1:21-cv-04585 Document 1 Filed 08/13/21 Page 2 of 6 PageID #: 2
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`JURISDICTION AND VENUE
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`5.
`
`This Court has jurisdiction over this cause pursuant to 28 U.S.C. § 1332 because it
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`is a controversy between citizens of different states and the matter in controversy, exclusive of
`
`interest and costs, exceeds $75,000.
`
`6.
`
`Venue is proper pursuant to 28 U.S.C. § 1391(b)(1) because Defendant resides in
`
`New York in this Judicial District.
`
`BACKGROUND FACTS
`
`7.
`
`Meadow Park is an inpatient rehabilitation and nursing facility located in Fresh
`
`Meadow, New York.
`
`8.
`
`Zurich provided workers compensation to Meadow Park for five policy years
`
`spanning from January 27, 2013 through January 27, 2018 (collectively, the “Insurance Program”).
`
`9.
`
`The insurance policies set forth the terms and conditions of the coverage provided
`
`to Meadow Park by Zurich.
`
`10.
`
`The insurance policies are loss sensitive, meaning Meadow Park agreed to assume
`
`responsibility for a portion of its insurance risk. In a loss sensitive policy, the amounts due for the
`
`insurance continue after the policy expiration date based on how the losses develop over time.
`
`11.
`
`Here, the loss sensitive component was structured through a retrospective-rating
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`provision that obligates Meadow Park to share in the insurance risk by paying retrospective
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`premium to Zurich. The retrospective premium is calculated pursuant to an agreed formula that
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`takes into account the initial premium paid, the subsequent losses, taxes, and other agreed factors.
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`12. Meadow Park is responsible for the retrospective premium as Meadow Park is
`
`identified as the Named Insured on Item 1 of the policies’ Information Page. The policies require
`
`“you” to pay the retrospective premium and define “you” as the “employer named in Item 1 of the
`
`information page.”
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`92509759v.7
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`2
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`Case 1:21-cv-04585 Document 1 Filed 08/13/21 Page 3 of 6 PageID #: 3
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`13.
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`Zurich has fully complied with its obligation under the Insurance Program. Zurich
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`has provided workers’ compensation coverage, paid claims, and calculated the resulting amounts
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`due.
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`14.
`
`Zurich sent an invoice to Meadow Park that reflects the retrospective premium due
`
`under the Insurance Program. The invoice reflects that Meadow Park owes retrospective premium
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`for two policy years. Specifically, $218,474.00 is owed for Policy WC 6738692-01, $251,931.00
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`is owed for Policy WC 6738692-02, and Meadow Park is entitled to a $214.00 credit for Policy
`
`WC 6738692-04. A total of $470,191.00 is therefore due to Zurich. The invoice is attached as
`
`Exhibit 1.
`
`15. Without excuse or justification, Meadow Park has failed to pay amounts owed for
`
`the retrospective premium under the Insurance Program.
`
`16.
`
`Apart from and in addition to the principal amount, Meadow Park owes Zurich for
`
`interest due on the unpaid invoice. Under New York law, prejudgment interest is mandatory and
`
`runs at the rate of nine percent (9%) per annum from the invoice due date. Interest will continue
`
`to accrue.
`
`COUNT I
`BREACH OF CONTRACT – POLICY WC 6738692-01
`
`17.
`
`Zurich repeats and realleges the allegations of paragraphs 1 through 16 above as if
`
`fully set forth herein.
`
`18.
`
`19.
`
`Policy WC 6738692-01 attached as Exhibit 2 is a valid and enforceable contract.
`
`Zurich has fully performed its obligations under this policy by providing insurance
`
`coverage and other benefits to Meadow Park.
`
`20. Meadow Park received the insurance coverage and other benefits provided under
`
`the policy.
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`92509759v.7
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`3
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`Case 1:21-cv-04585 Document 1 Filed 08/13/21 Page 4 of 6 PageID #: 4
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`21.
`
`As the Named Insured, the policy requires Meadow Park to pay the retrospective
`
`premium obligation in the principal amount of $218,474.00 as reflected in the unpaid invoice.
`
`(Ex. 1.)
`
`22.
`
`Zurich has sent the unpaid invoice to Meadow Park and demanded payment of the
`
`amounts due.
`
`23. Without excuse or justification, Meadow Park has breached the provisions of the
`
`policy by failing to pay the amounts due.
`
`WHEREFORE, Zurich prays for judgment in its favor and against Meadow Park as follow:
`
`(a)
`
`(b)
`
`(c)
`
`Finding that Meadow Park is liable for the $218,474.00 due under
`Policy WC 6738692-01 and is liable for $470,191.00 under the
`Insurance Program;
`
`liable for prejudgment and
`is
`that Meadow Park
`Finding
`postjudgment interest for the unpaid insurance obligation; and
`
`Granting Zurich such other and further relief as this Court deems
`just and proper.
`
`COUNT II
`BREACH OF CONTRACT – POLICY WC 6738692-02
`
`24.
`
`Zurich repeats and realleges the allegations of paragraphs 1 through 23 above as if
`
`fully set forth herein.
`
`25.
`
`26.
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`Policy WC 6738692-02 attached as Exhibit 3 is a valid and enforceable contract.
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`Zurich has fully performed its obligations under this policy by providing insurance
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`coverage and other benefits to Meadow Park.
`
`27. Meadow Park received the insurance coverage and other benefits provided under
`
`the policy.
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`92509759v.7
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`4
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`Case 1:21-cv-04585 Document 1 Filed 08/13/21 Page 5 of 6 PageID #: 5
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`28.
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`As the Named Insured, the policy requires Meadow Park to pay the retrospective
`
`premium obligation in the principal amount of $251,931.00 as reflected in the unpaid invoice.
`
`(Ex. 1.)
`
`29.
`
`Zurich has sent the unpaid invoice to Meadow Park and demanded payment of the
`
`amounts due.
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`30. Without excuse or justification, Meadow Park has breached the provisions of the
`
`policy by failing to pay the amounts due.
`
`WHEREFORE, Zurich prays for judgment in its favor and against Meadow Park as follow:
`
`(a)
`
`(b)
`
`(c)
`
`Finding that Meadow Park is liable for the $251,931.00 due under
`Policy WC 6738692-02 and is liable for $470,191.00 under the
`Insurance Program;
`
`liable for prejudgment and
`is
`that Meadow Park
`Finding
`postjudgment interest for the unpaid insurance obligation; and
`
`Granting Zurich such other and further relief as this Court deems
`just and proper.
`
`COUNT III
`UNJUST ENRICHMENT
`
`31.
`
`Zurich repeats and realleges the allegations of paragraphs 1 through 30 above as if
`
`fully set forth herein.
`
`32. Meadow Park has been enriched by receiving the benefits of the Insurance Program.
`
`33.
`
`The enrichment to Meadow Park came at Zurich’s expense as Zurich has paid
`
`substantial sums on Meadow Park’s worker’s compensation claims under the Insurance Program.
`
`34.
`
`It is against equity and good conscience to permit Meadow Park to retain the
`
`benefits of the Insurance Program without paying the amounts owed for the retrospective premium
`
`due under the Insurance Program.
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`92509759v.7
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`5
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`
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`Case 1:21-cv-04585 Document 1 Filed 08/13/21 Page 6 of 6 PageID #: 6
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`WHEREFORE, Zurich prays for judgment in its favor and against Meadow Park as follow:
`
`(a)
`
`(b)
`
`(c)
`
`Finding that Meadow Park is liable for the $470,191.00 under the
`Insurance Program;
`
`liable for prejudgment and
`is
`that Meadow Park
`Finding
`postjudgment interest for the unpaid insurance obligation; and
`
`Granting Zurich such other and further relief as this Court deems
`just and proper.
`
`JURY DEMAND
`
`Zurich hereby demands trial by jury on all issues so triable.
`
`
`
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`Dated: August 13, 2021
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`American Zurich Insurance Company
`
`
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`
`
`/s/Aileen E. McTiernan
`Aileen E. McTiernan
`aileen.mctiernan@lockelord.com
`Locke Lord LLP
`200 Vesey Street, 20th Floor
`New York, NY 10281
`Telephone: (212) 415-8600
`Facsimile: (212) 303-2754
`
`Steven T. Whitmer (pro hac vice request to be filed)
`swhitmer@lockelord.com
`Hannah Oswald (pro hac vice request to be filed)
`hannah.oswald@lockelord.com
`Locke Lord LLP
`111 South Wacker Drive
`Chicago, IL 60606
`Telephone: (312) 443-0700
`Facsimile: (312) 896-6254
`
`6
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`92509759v.7
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