DALLAS — Texans Insurance Group was served with a new legal action on Oct. 22 for violating an arbitration ruling to reinstate the CUSO's former president, Kevin M. Curley, and award him additional compensation and benefits.
Filed in the 192nd Civil District Court in Dallas County, the action alleges Texans Insurance and affiliated companies "schemed" to deny insurance executive Kevin Curley the full payout for the sale of his insurance agency to the $1.8 billion Texans Credit Union, which owns the CUSO. The lawsuit alleges the defendants illegally fired Curley from his post as president and then refused to follow a July 2008 arbitrator's decision that reinstateed Curley.
"The defendants effectively changed the locks on the front door–firing Mr. Curley in what we believe was not only a malicious and improper act, but one that was short-sighted as well," said William A. Brewer III, lead counsel for Curley. "By removing Mr. Curley as president of [Texans Insurance], we believe defendants destroyed the value of the company and jeopardized the economic model upon which Mr. Curley was to be compensated."
Until the time he was removed as president, Curley claimed the company was meeting all of its performance objectives.
Brewer said the defendants' "mismanagement of TIG has deprived Mr. Curley of his right and ability to earn more than $21 million in earn out payments. It is shocking that the company refuses to comply with an arbitrator's ruling."
Texans CU would not to comment on the case. "It is our policy to not make public comments on ongoing legal matters," said Matt Davis, executive vice president at Texans CU.
The CU previously told Credit Union Times that Curley was reinstated on Sept. 1, but Curley's attorneys said the former executive has yet to resume his post. Brewer said shortly after the July 8 arbitration hearing, Curley attempted to return to work but was told "not to report." Curley was paid $350,000 in back pay but is still waiting on additional benefit and legal fee compensation, Brewer said, adding he is not sure if the former CUSO president is on the payroll.
Brewer said Curley was told that he would have to report to Gary Kirkindoll, president of Texans Services Group, and David Addison, president/CEO of Texans CU, but it remained unclear how the reporting process would take place.
Curley sold his business to Texans CU for $40 million in January 2007. At that time, it was mutually agreed that Curley would manage Texans Insurance day-to-day operations for a period of at least three years, according to the petition. This would allow him to qualify for the full financial payout from the sale and ease any disruption to the company or its clients as a result of the change in ownership. Brewer said, typical of such business arrangements, a key provision of the sale was an employment agreement that called for an arbitrator to rule on any possibility that Curley might be unjustly terminated and unlawfully preventing him from realizing the full financial potential of his company's sale.
Curley alleged that shortly after the sale was consummated, the defendants terminated him without cause. An arbitrator agreed with the allegation and ordered that Curley be reinstated as president of Texans Insurance. He returned to work a week after the ruling, only to be turned away at the door, according to Curley's attorney.
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