The Superior Court of New Hanover County, North Carolina has ruled in favour of the American Transportation Group Insurance (ATGI) Risk Retention Group (RRG) after it filed a motion to show cause and for sanctions against MVT Insurance Services and its principal.
The motion to show cause and sanctions comes after the RRG alleged in May last year that MVT Insurance Services, a California-based managing general agent, and its principal Amrit Singh, wrongfully exercised unfettered control of ATGI, misappropriated ATGI funds, and breached their fiduciary duties to ATGI.
Special Superior Court Judge for complex business cases Gregory McGuire of the Superior Court of New Hanover County, North Carolina, considered the motions and concluded that the motion for sanctions should be granted, in part, and denied, in part, and the motion to dismiss third-party complaint, and the motion for a pre-filing injunction should be dismissed as moot.
In October 2020, the court entered a preliminary injunction against MVT Insurance Services, Amrit ‘Andy’ Singh, Eleazar Rojas and Shamsher Singh (defendants).
The injunction ordered Andy Singh, Shamsher Singh and Eleazar Rojas and MVT to not act on behalf of ATGI or American Transportation Group Association (ATGA) or otherwise holding themselves out as officers or authorised representatives of ATGI or ATGA.
In addition, the defendants and third-party plaintiffs were ordered against making any material change in ATGI’s management or terminate any of its service providers absent approval by the department.
But since the injunction was ordered, the defendants emailed two representatives of the North Carolina Department of Insurance (NCDOI) and numerous ATGI service providers, among other violations throughout October.
In the motion for sanctions, ATGI sought both “a finding that defendants are in civil contempt” and an order imposing “sanctions that include dismissal of defendants’ counterclaims and awarding of ATGI’s attorneys’ fees in bringing and pursuing this motion”.
In the motion for sanctions, the court found that the defendants were in violation of the preliminary injunction.
The court also stated that the defendants were in disregard for the court’s rules and in violation of the court’s order to establish filing accounts and make separate filings.
The entire record before the court establishes that defendants have “abused the [court’s] processes at a level that is utterly inconsistent with the orderly administration of justice or undermines the integrity of the process”, the court explained.
In the decision, the court entered a default judgment against the defendants and in favour of ATGI as to the claims in the complaint and the court dismissed with prejudice defendants counterclaims against ATGI and their claims against third-party defendants.
Additionally, the court ruled that the imposition of lesser sanctions would not be sufficient to address the conduct at issue nor would they be in the interests of justice.
On the request for civil contempt, it concluded that issuing an order of civil contempt against defendants would serve no useful purpose in this case.
The court further concluded that there is no prospect that the purpose of the preliminary injunction “can still be served by compliance with the order”.
Commenting on Judge McGuire's ruling, Michael Hunter, president of ATGI RRG, states: “We are pleased with the court’s ruling on this matter. We look forward to continuing to defend the interests of American Transportation Group Insurance RRG members.”
A statement from ATGI RRG, says that it “cautions members of the public, insurance agents, and other service providers that MVT Insurance Services and Andy Singh are not authorised representatives of the company. Andy Singh and MVT representatives continue to make unauthorised solicitations on behalf of ATGI RRG”.
ATGI RRG requests that any “suspicious communications” should be reported to the NCDOI.
