Am. Samoa Government Settles 12 Year Old Insurance Case

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Progressive Insurance to receive $5.67 million over fire claim

By Joyetter Feagaimaalii-Luamanu

PAGO PAGO, American Samoa (The Samoa News, April 29, 2014) – A 12-year-old civil battle between the American Samoa Government and the Progressive Insurance Company has been resolved in a settlement and ASG has moved to dismiss with prejudice the appeals in the matter.

(Samoa News reminds its readers that dismissal with prejudice means the plaintiff is barred from filing another case on the same claim.)

In a statement issued by Progressive Insurance Company (Pago Pago) Limited through its Senior Vice President, Greg Duffy said, after ten years of litigation, Progressive is pleased that it has reached a settlement and entered into an agreement with the American Samoa Government (ASG) which will cease further litigation concerning the fire which destroyed the old Laufou shopping center on April 20, 2002.

"This agreement will allow us to focus our endeavors in enhancing our product offerings and services to our customers, the business community and citizens of American Samoa. We congratulate Governor Lolo and his administration for their efforts in facing up to and pro-actively responding to the Progressive case and the many other legacy issues they inherited when taking office."

Duffy said governor Lolo’s efforts to drive the economic activity in the Territory are commended and with the discontinuation of litigation against ASG, Progressive is better placed to play its part in the positive economic development of the Territory to the benefit of the people of American Samoa.

The settlement is in the amount of US$5.67million including interest as laid out in a nine page agreement signed by Attorney General Talauega Eleasalo Ale and Progressive Insurance Attorney, Devin A McRae.

According to the agreement, on April 20, 2002 a fire destroyed Laufou Shopping Center. Eight months later, the insurance company presented a claim to ASG under the tort liability act in which Progressive insurance claimed money damages against ASG stemming from the Fire Bureau’s negligence in fighting the fire, for the sum of US$6million.

In July 2007 following a trial the High Court issued its order and opinion wherein ASG was liable to the insurance company for US$6.60million which ASG appealed. According to the agreement the parties wish to fully and finally resolve and settle any and all outstanding claims between them concerning the Claim Letter, the Action, the initial appeal and the subsequent appeal in order to avoid existing and future expense, inconvenience and distraction of burdensome and protracted litigation.

According to the agreement, ASG shall pay Progressive Insurance the total principal amount of US$5,675,000 plus interest in the following terms; ASG will pay in immediately available good funds a principal payment of US$500,000 by no later than April 30, 2014 (tomorrow); ASG will pay another US$500,000 by December 30, 2014.

Regarding the interest issue, ASG will not pay any interest through December 2014, but will pay 4% from January 1, 2015 through December 31, 2015 and 6% from January 1, 2016 until full and final payment is completed.

"Notwithstanding the forgoing, if ASG has made principal payments on the final judgment to Progressive Insurance totaling US$5,475,00 in immediately available good funds before June 30, 2015 along with having paid all interest mentioned above all accruing thereon in immediately available good funds, then Progressive will accept said amounts in full satisfaction of the final judgment."

According to the agreement if for any reason, the first payment of US$500,000 set forth is not paid by April 30, 2014, there will be a one-time penalty of US$100,000 added to the amounts. If for any reason the second payment of US$100,000 is not made by December 30, 2014 there will be a onetime fee of US$135,000.

"If for any reason the principal payment of the final judgment to the amounts totaling US$5,675,000 plus accrued interest by December 31, 2017 and the total outstanding balance, including interest as of December 31, 2017 is above US$1.5million then Progressive may enforce the Final Judgment up to its full principle amount of US$6million plus all post judgment interest set 6% annually accruing from July 24, 2007, free of the restrictions/reduction as otherwise set forth above (but such resulting amount shall be reduced by total payments made by ASG under this agreement).

"If such total outstanding balance is at US$1.5 million or below as of December 31, 2017 then interest shall accrue on said remaining balance of 10% annually until paid."

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