Steamboat Pilot & Today

A jury awarded a local insurance company $6.8 million Friday, ending a two-week civil trial in District Court.

MDM Group Associates, owned by Joe McNasby, had insured ski areas including Vail and Crested Butte against loss of skier business caused by outside circumstances such as lack of snow. MDM used CNA Reinsurance, part of CNA, an international finance firm in Chicago, to underwrite the policies.

MDM sued the underwriter, saying that its mishandling of the claims destroyed MDM's program. The jury agreed, saying the defendant breached its fiduciary duties and inappropriately interfered with MDM's business relationships, causing the company losses.

In 1997, MDM started selling an insurance policy that insured ski resorts against low skier days caused by outside circumstances. MDM sold the insurance to Vail, Crested Butte, Telluride and Mammoth. Steamboat Ski and Resort Corp. had not purchased the insurance.

During the 1999-2000 season, every insured resort submitted claims, suffering from the lack of snow during the holiday seasons and the Y2K scare that brought fewer visitors that year. The claims totaled to $22 million.

MDM claimed CNA Reinsurance not only took too long in paying the claims, but that also, when it stopped being the underwriter, encouraged other companies not to underwrite the policy.

MDM sued for $7 million in damages, saying the ski areas in the plan dropped out after their experience and the program was not successful because of CNA's interference. MDM had planned to expand the insurance policy to hotels, cruise lines and other ski areas.

Greeley attorney Rich LiPuma and local attorney Mark Steinke represented MDM. The Denver-based firm Hall & Evens, led by Edward Widman, represented CNA.

"A man's business has been taken away from him, and right now you are the only people who can make him whole," LiPuma told the jury during closing arguments.

An eight-person jury sat through two weeks of testimony. Two of the jury members were alternates and released before the final decision was made.

In the verdict, the jury awarded MDM $1.58 million for lost sales to ski areas that were once insured and another $726,492 for loss of potential ski-area clients.

It awarded $3.3 million for lost sales to hotels, $400,000 for cruise lines, $350,000 for Japanese ski areas, $27,500 for other fares and $300,000 in additional costs.

After the verdict, McNasby said it had been a long four years battling with the defendant, but said the decision likely would be appealed. McNasby said he had offered to settle for much less out of court years ago.

-- To reach Christine Metz call 871-4229

or e-mail cmetz@steamboatpilot.com