The Cochran Firm has sued two of its insurers for refusing to cover a settlement it reached with a former client who claimed the firm didn't help her recoup a multimillion-dollar judgment from a suit she launched against the Cuban government after learning her professed anti-Communist husband was actually a Cuban spy.
The firm's Miami office and one of its attorneys sued First Mercury Insurance Co. and State National Insurance Co. on Wednesday in the U.S. District Court for the Southern District of Florida, accusing them of not making good on a claims-made lawyers professional liability policy they had extended to the firm.
The firm represented Ana Margarita Martinez in her lawsuit against Cuba, which concluded with a $27.1 million judgment in her favor after a judge found that the Cuban government had committed acts of sexual battery, terrorism and torture by facilitating spy Juan Pablo Roque's sham marriage to Martinez for the purpose of him acting as a double agent within the Cuban exile community in Florida.
In late 2008 Martinez sued Cochran and attorney Scott Leeds, alleging they had failed to properly represent her interests in collecting the judgment.
In 2001, when Martinez won her judgment against Cuba, Leeds told the Miami Herald that it could take years to unlock blocked Cuban assets to pass on to his client.
Leeds was not available for comment Thursday.
Martinez received $200,000 from frozen Cuban accounts in 2005 and has seized aircraft flown into the U.S. by Cuban refugees in additional attempts for restitution. In February, Martinez filed court motions to garnish fares from eight charter companies that do business in Cuba.
To resolve Martinez's claims against the firm, Cochran entered into mediation with the insurers' authorization to settle the claim, according to the instant complaint. Martinez eventually agreed to a $287,000 deal, a small price compared to the firm's potential liability, the suit says.
“Based on the insurers’ actions, including the explicit and/or implicit grant of settlement authority, the policyholders attended mediation and settled Martinez’s claim for less than 15 percent of the policy’s liability limits and for a fraction of the policyholders’ potential liability,” the suit said.
The insurers denied coverage under the policy, claiming that the settlement had not occurred with their consent and that they were not properly given notice of the mediation proceeding, according to the firm.
Allowing the insurers to assert any limitations on the coverage now would constitute a fraud against the firm, because the policyholders relied on and have been prejudiced by the insurers' conduct and representations, the suit says.
Martinez's story hit the headlines in 1996, after her husband showed up in Cuba after Cuban fighter planes shot down two civilian aircraft that were operating a search-and-rescue mission for Cuban refugees.
Roque, who had worked for the FBI during his time in the U.S., announced his loyalty to Cuba after the shootings, and decried the downed pilots as having operated a terrorist cell.
The Cochran Firm is represented in this matter by Ver Ploeg & Lumpkin PA.
Counsel information for the defendants was not immediately available Thursday.
The case is Leeds et al. v. First Mercury Insurance Co. et al., case number 10-cv-22729, in the U.S. District Court for the Southern District of Florida.
To see court documents or read similar stories, visit Law360.com.
