Lawyer for Defunct Nebraska Insurance Agency Fined $15K

A Nebraska judge has ordered a lawyer to pay $15,000 for filing frivolous motions in a long-running lawsuit dispute over a defunct insurance company’s assets.

The case that dates back to 1998 is far from over because that lawyer, Bill Gast, is appealing the latest ruling against his David Fulkerson’s estate and his former firm, Countrywide Insurance Agency.

The dispute may soon visit the Nebraska Supreme Court for a fifth time if the latest appeals are heard.

Douglas County District Judge Peter Bataillon fined Gast after deciding that several of his motions were frivolous, particularly a motion last fall that asked the judge to remove himself from the case.

“Mr. Gast filed a motion for this court to recuse itself because of some relationship/friendship this court had with plaintiff’s counsel in the late 1970s and/or early 1980s,” Bataillon wrote.

Gast didn’t immediately respond over the weekend to questions about the sanctions. Gast has been critical of Bataillon’s past rulings, and he argues in his appeal that the judge didn’t have the legal authority to decide the case this spring.

Florida regulators are trying to recover at least $2.2 million in the case. Gast argues that the case should have ended after Fulkerson’s 2009 death because Florida’s lawyers missed a key filing deadline.

Before United Southern failed, Countrywide had been selling insurance policies as an agent. When Florida officials ordered United Southern to stop writing insurance policies in 1997, Countrywide did not hand over four months of premiums.

In a 2006, Fulkerson was ordered to repay $2.23 million in premiums and pay $2.44 million in interest, but that ruling by Bataillon was later overturned.

The Fulkerson family denies any money was taken fraudulently. Gast has argued the missing premium money was either returned to customers or applied to new insurance policies with a different company.

The Nebraska Supreme Court has ruled on aspects of this case four times already. The state high court said in 1999 that Bataillon was wrong to issue a judgment against Fulkerson and Countrywide without a full trial. Then in 2005, the court ruled it didn’t have jurisdiction to evaluate whether the trial judge should have recused himself from the case.

The court also ruled a jury, not the judge, should have decided the case in 2006. And then it issued another ruling in 2009 clarifying how the case should proceed.

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