It’s been seven years since former MLB pitcher Matt Garza was forced to retire from baseball due to a shoulder injury, but he was denied a $10 million disability insurance policy after he retired from playing due to illness. He is scheduled to go to court over the matter.
After the underwriters settled the lawsuit earlier this year, legal disputes are now underway over which party is ultimately responsible for Garza submitting an incomplete insurance application before the 2017 MLB season. The focus is on that.
Garza’s case is a wake-up call for high-profile athletes seeking disability insurance and the potential pitfalls that can occur even after a policy is signed. Broadly speaking, Garza argues that he was ultimately victimized by the professional failings, privileges, and conflicts of the company he hired to serve his best interests.
Garza, 40, was insured through International Specialty Insurance, a Lloyd’s of London policyholder. The company’s athlete disability insurance has been the subject of controversy, some of which has led to lawsuits.
After being denied coverage, Garza first filed a federal lawsuit in November 2020 against Lloyd’s, ISI, and Gilbert Insurance Services, a California-based agency run by former sports agent Dennis Gilbert. woke up. Mr. Garza then refiled the suit in California state court, adding accounting and business management firm NKSFB as a defendant. Garza has been a client of NKSFB, a popular company among Hollywood celebrities and professional athletes, since 2007.
Other named defendants in the lawsuit include Paradigm Gilbert, which acquired Gilbert Insurance Services in August 2020 as part of a partnership with Texas-based insurance company Higginbotham. Higginbotham credited NKSFB with “introducing” Paradigm to Gilbert, according to a press release at the time. Meanwhile, in early 2021, ISI’s “assets” were acquired by Exceptional Risk Advisors, a rival Lloyd’s coverholder who is not a defendant in the lawsuit. (A lawyer for ISI did not respond to an email requesting comment.)
According to the complaint, Mr. Garza accused Lloyd’s of breach of contract in what it called a “subsequent speculative underwriting process” designed to relieve Lloyd’s of its financial obligations. Separately, it accused Mr. Gilbert, ISI and NKSFB of breaching their duties as brokers and fiduciaries by prompting them to fill out incomplete insurance applications and failing to conduct due diligence. Garza also asserted claims of negligent misrepresentation and breach of contract against some of these co-defendants.
According to Los Angeles Superior Court records, Lloyd’s settled with Garza in May for $5 million, which was approved by the court in September. Lloyd’s had sought to keep the previously unreported settlement amount secret, but Judge Stephen P. Farrar ruled that the confidentiality request was invalid because Lloyd’s had already disclosed the amount in a public pleading. He pointed out that.
In recent weeks, Judge Pfahler has ruled against Paradigm Gilbert and ISI’s attempts to dismiss the lawsuit on summary judgment. A hearing on a similar complaint by Gilbert Insurance Services is scheduled for Thursday morning, with NKSFB, ISI and Paradigm Gilbert also participating. If this effort is unsuccessful or the matter is not resolved in advance, the case is scheduled to go to court on November 4.
Pierce O’Donnell, NKSFB’s lawyer, told Sportico in a statement that his client was “not responsible” and “looks forward to being vindicated at trial.”
Mr O’Donnell added: “For more than a decade, NKSFB has served as Matt Garza’s trusted executive and management team in every capacity. Garza has always admired their skill, dedication, and loyalty to his family and him.”
Attorneys for Dennis Gilbert and the company that bears his name did not respond to emails seeking comment.
Garza had a successful MLB career that spanned more than a decade, but in June 2017, during a game against the Los Angeles Dodgers, he collided with Milwaukee Brewers teammate Jesus Aguilar, a 277-pound first baseman. Garza suffered a torn labrum and struggled to pitch for the rest of the season due to that injury.
After undergoing offseason shoulder surgery in January 2018, Garza was ruled out for the entire 2018 MLB campaign and ultimately retired without pitching another pitch. However, when he submitted an insurance claim to Lloyds in July 2019, the London insurance market did not disclose a pre-existing injury to the same shoulder, making his application incomplete and inaccurate. showed the reaction. Medical experts subsequently hired by Lloyd’s claimed that 50% of his shoulder problems were due to problems that occurred in the three years before insurance coverage, but Garza disputes this view. chanting.
Garza claimed he initially signed a blank insurance application while sitting in the Brewers’ clubhouse during the opening week of the 2017 season, on the advice of business and insurance agents. Garza said in the complaint that “on information and belief” he was the entity responsible for submitting the blank application for NKSFB to sign, which he then filled out with partial information and forwarded to Gilbert. He claimed that there was.
In addition to signing the application, Garza also signed a HIPAA-compliant health records authorization release, according to court records. In its motion for summary judgment, Gilbert argued that none of its employees consulted Garza about the application process at the time.
However, Garza noted that as part of filing the application, Dennis Gilbert signed a “statement of attorney” attesting to the accuracy and completeness of the application. However, in his defense, Mr. Gilbert argued that the application for the policy precluded the insurance agent from “underwriting the very services that Mr. Garza claims…that Mr. Gilbert was unable to perform.”
Earlier this year, Judge Pfahler fined one of Gilbert’s attorneys $6,000 for discovery violations. Last September, Sportico reported on Paradigm Gilbert’s role in procuring disability insurance for University of Colorado star football player Travis Hunter and Shedule Sanders, son of CU head coach Deion Sanders. Neither player was eligible for income protection at the time of last year’s season opener against Colorado State, during which Hunter sustained a serious injury that sidelined him for four weeks.
