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Lagstein v. Certain Underwriters at Lloyd's of London

United States Court of Appeals, Ninth Circuit

August 5, 2013

Zev Lagstein, M.D., Plaintiff-Appellant / Cross-Appellee.
v.
Certain Underwriters at Lloyd's of London, a foreign insuring entity, Defendant-Appellee / Cross-Appellant.

Argued and Submitted May 14, 2013—San Francisco, California

Appeal from the United States District Court for the District of Nevada Gloria M. Navarro, District Judge, Presiding D.C. No. 2:03-CV-01075-GMN-LRL

COUNSEL

Thomas L. Hudson (argued), Osborn Maledon, P.A., Phoenix, Arizona; Charles J. Surrano III and John N. Wilborn, Surrano Law Offices, Phoenix, Arizona; Julie A. Mersch, Law Offices of Julie A. Mersch, Las Vegas, Nevada, for Plaintiff-Appellant/Cross-Appellee.

Evan M. Tager (argued) and Philip Allen Lacovara, Mayer Brown LLP, Washington, D.C.; Joseph M. Rimac, Anna M. Martin, and Kevin G. Gill, Rimac Martin, P.C., San Francisco, California, for Defendant-Appellee/Cross-Appellant.

Before: Richard R. Clifton and Carlos T. Bea, Circuit Judges, and Kevin Thomas Duffy, District Judge. [*]

SUMMARY[**]

Attorney's Fees / Arbitration Award

The panel reversed and remanded the district court's ruling on interest and attorney's fees, and affirmed the district court's denial of a request for return of an alleged overpayment to plaintiff from an escrow fund in an diversity action involving an arbitration award arising from a plaintiff's claim on a disability insurance policy.

The panel held as a threshold issue that the decision of the arbitrators—which awarded the plaintiff interest on contract damages—did not foreclose the district court from awarding interest on the remaining portions of the arbitration award. The panel held that under Nevada law plaintiff was entitled to collect post-award, pre-judgment interest on the non-contract damages portions of the arbitration award from the date of the awards through the date of payment. The panel also held that plaintiff was entitled to collect post-judgment interest on his post-award, pre-judgment interest from the date of this opinion until the date the insurer pays the interest. The panel remanded with instructions to award plaintiff attorney's fees pursuant to Nev. Rev. Stat. § 689A.410(5). Finally, the panel held that the district court did not impermissibly overpay plaintiff when it released funds from the escrow account and included interest on the contract damages through the date of payment.

OPINION

DUFFY, District Judge.

After undergoing major heart surgery in 2001, Dr. Zev Lagstein, a nuclear cardiologist, made a claim on a disability insurance policy he had purchased from Certain Underwriters at Lloyd's of London. Lloyd's pussyfooted for years only to eventually deny the claim, so Dr. Lagstein sued in the United States District Court for the District of Nevada. Lloyd's moved to arbitrate pursuant to the policy, and the District Court granted the motion.

Illustrating the maxim "be careful what you wish for, " the arbitration was wildly successful for Dr. Lagstein, resulting in a total damages award of over $6 million against Lloyd's, including $4 million in punitive damages. Lloyd's, unhappy with the result of the arbitration it had demanded, successfully moved in the District Court to vacate the award. Dr. Lagstein appealed, and this court reversed and remanded with instructions to confirm the award. The District Court then confirmed the award but denied Dr. Lagstein's request for interest and attorneys' fees. Dr. Lagstein now appeals the District Court's ruling on interest and attorneys' fees, and Lloyd's cross-appeals requesting return of an alleged overpayment to Dr. Lagstein from a fund which held ...


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