ELNY: CLASS ACTION LAWSUIT & CONTEMPT SANCTIONS

On November 8, 2012, Edward S. Stone, Esq. and the firm of Christensen & Jensen filed a class action lawsuit in Federal Court in New York against the Superintendent of Financial Services Benjamin Lawsky (and his predecessors) in their personal capacity, MetLife, and Credit Suisse for breach of fiduciary duty and other causes of action arising out of the mismanagement of the ELNY rehabilitation and subsequent cover-up.

Shortly after the Complaint was filed, the Superintendent of Financial Services, Benjamin Lawsky, filed a motion in New York Supreme Court, Nassau County before Judge John M. Galasso seeking to enjoin the shortfall payees and their legal counsel from proceeding with the class action lawsuit and holding their attorneys in contempt for filing such action.  Edward S. Stone, Esq. and Christensen & Jensen vigorously opposed this attempt to retaliate against the ELNY shortfall payees, alleging that the motion amounted to a SLAPP (Strategic Lawsuit Against Public Participation) suit intended to intimidate the ELNY shortfall payees into withdrawing the federal class action lawsuit.

Despite acknowledging that “This Court is not empowered to dismiss the federal complaint outright,” Judge Galasso held the victims and their attorneys in civil contempt for filing the federal class action lawsuit in the Southern District of New York.

We were disappointed that Judge Galasso interpreted the injunctions as broader in scope than the immunity provisions contained in the various orders issued in connection with the failed rehabilitation of The Executive Life Insurance Company of New York dating back to 1991. To avoid additional contempt sanctions pending an appeal of the order of contempt, on February 8, 2013 we filed a motion to dismiss the class action lawsuit without prejudice.

On August 8, 2013 we appealed the order of contempt, seeking review by the New York Appellate Division, Second Department. On November 5, 2014 the Appellate Division, Second Department affirmed Judge Galasso’s order of contempt. In December, 2014 Edward Stone Law requested leave to appeal to New York’s highest court, the Court of Appeals. On March 11, 2015 the Second Department denied this motion, effectively ending any possible relief for the Executive Life (ELNY) shortfall victims.

For more information on Executive Life: The Executive Life Insurance Company of New York Debacle and Executive Life Insurance Company of New York in the NEWS