Supply: Shutterstock.

CUMIS Specialty Insurance coverage Firm paid $3.2 million in authorized protection charges, courtroom prices and vendor bills for former Melrose Credit score Union President/CEO Alan Kaufman when he was indicted and later convicted on two counts of bribery.

The disgraced credit score union government is now embroiled in lawsuits with the Madison, Wis.-based CUMIS, which is asking a New York federal choose to declare that the insurance coverage firm is not obligated to proceed to pay Kaufman’s authorized payments whereas his conviction and jail sentence is being appealed. He’s free on bail pending the end result of the attraction.

In April 2016, CUMIS issued a administration {and professional} legal responsibility coverage to Melrose Credit score Union that lined Kaufman. Simply three months later, the Melrose board fired him and by March 2021 — after two years of authorized proceedings — a jury discovered Kaufman responsible of accepting bribes from a taxi medallion enterprise proprietor in change for hundreds of thousands of {dollars} in loans from the credit score union. Kaufman was acquitted on one rely of conspiracy to commit bribery.

In September 2021, he was sentenced to a few years and eight months in federal jail. Kaufman additionally was ordered to pay $2 million in restitution to the NCUA and a $30,000 superb.

CUMIS contends Kaufman’s skilled legal responsibility protection doesn’t prolong to his authorized charges throughout his post-sentencing or his attraction proceedings earlier than the Second Circuit Courtroom of Appeals in New York Metropolis, in keeping with CUMIS lawsuit paperwork filed in U.S. District Courtroom for the Southern District of New York in Manhattan.

CUMIS mentioned it has repeatedly knowledgeable Kaufman and his attorneys that his conviction and sentencing constituted a “closing adjudication” of his legal responsibility that established the applicability of the coverage’s exclusions for dishonest or willful acts and renumeration. Meaning CUMIS is not obligated to pay any further authorized charges publish sentencing or for his appeals.

Though CUMIS doesn’t imagine the coverage requires it to pay Kaufman’s authorized charges and prices following his conviction and sentencing, it has continued to take action beneath menace of a lawsuit. Kaufman did comply with signal a letter that he would repay these authorized charges and prices ought to it’s decided by a federal choose, in keeping with courtroom paperwork.

However, Kaufman countersued CUMIS claiming it was obligated to pay his authorized charges and bills throughout the appeals proceedings.

Kaufman argued in his courtroom filings that the CUMIS coverage doesn’t outline “closing adjudication.” He contends that closing adjudication means a closing resolution on the deserves from which no additional proper of attraction or overview exists and that there is no such thing as a exclusion for appellate prices.

Extra authorized proceedings have been scheduled by means of the tip of this 12 months and if there is no such thing as a settlement reached, the case might go to trial, in keeping with a case administration and scheduling order doc.