FOR THE SOUTHERN DISTRICT OF TEXAS CORPUS …online.wsj.com/public/resources/documents/LB-28Answer-and-Cross... · in the united states district court for the southern district of

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS

CORPUS CHRISTI DIVISION

SIMON DOMINGUEZ, PEDRO § DOMINGUEZ, JOSE FRANCISCO § BRIONES, and ROBERT PEREZ § On Behalf of Themselves and All Other § Person Similarly Situated, § § Plaintiffs, § § v. § C. A. No. 2:07-cv-00285 § THE HARTFORD FINANCIAL § SERVICES GROUP, INC., § THE HARTFORD INSURACE § COMPANY, WARREN TODD § HOEFFNER, THOMAS E. BILEK, § HOEFFNER & BILEK, L.L.P., § JAMES P. “BUDDY” BELL, and § BUDDY BELL ATTORNEY AT LAW, § § Defendants. §

DEFENDANT WARREN TODD HOEFFNER’S ANSWER TO THIRD AMENDED COMPLAINT AND CROSS-CLAIM AGAINST

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

TO THE HONORABLE JUDGE RAINEY: Subject to and without waiving his objection to venue in this Court, Defendant Warren

Todd Hoeffner (“Hoeffner”) files the following Answer to Plaintiffs’ Third Amended Original

Class Action Complaint (“Complaint”) (Doc. #5) and his Cross-Claim against The Hartford

Financial Services Group, Inc. (“The Hartford”), as follows:

I. ANSWER

1. In answer to the allegations in paragraph 1 of the Complaint, Hoeffner denies that

this Court has jurisdiction over the action filed by Plaintiffs against him and that the amount in

Case 2:07-cv-00285 Document 28 Filed 10/15/2007 Page 1 of 39

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controversy in the action filed by Plaintiffs against him exceeds the sum of $5 million, exclusive

of interest and costs.

2. In answer to the allegations in paragraph 2 of the Complaint, Hoeffner admits that

the Southern District of Texas is the correct District, but denies that the Corpus Christi Division

is a proper venue. Plaintiffs and Hoeffner entered into fee contracts containing a forum selection

clause which specified a court in Harris County, Texas, for adjudication of claims, such as those

made the subject of the Complaint. Contemporaneous with this Answer, Hoeffner has filed a

motion to dismiss Plaintiffs’ Complaint based on improper venue in light of the forum selection

clause in the underlying contracts. In the alternative, Hoeffner has moved to transfer venue to

the Houston Division of the Southern District of Texas and further has requested that this action

be considered by the Honorable David Hittner, who is currently presiding over a related criminal

proceeding involving Hoeffner. In the event that the court dismisses Plaintiffs’ Complaint or

transfers it the Houston Division, Hoeffner has also requested that the court transfer this

contemporaneously-filed Cross-Claim against The Hartford to Judge Hittner.

3. Hoeffner admits the allegations in the first sentence of paragraph 3. He is without

sufficient knowledge to form a belief as to the truth of the allegation in the second sentence that

Simon Dominguez’ claims were settled with The Hartford. Hoeffner admits that Simon

Dominguez’ potential silicosis claims were evaluated. Hoeffner denies the balance of the

allegations in paragraph 3 of the Complaint.

4. Hoeffner admits the allegations in paragraph 4 of the Complaint.





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8. In answer to the allegations in paragraph 8 of the Complaint, Hoeffner is without

sufficient knowledge to form a belief as to the truth of the allegations contained in the paragraph,

and on that basis denies the allegations in such paragraph.


10. In answer to the allegations in paragraph 10 of the Complaint, Hoeffner denies

that Hoeffner & Bilek, L.L.P. “is” a business organization that “maintains” a principal place of

business; however, he admits that it was a business organization and he admits the balance of the

allegations in paragraph 10.


12. Hoeffner admits the allegations in paragraph 12 of the Complaint


14. In answer to the allegations in paragraph 14 of the Complaint, Hoeffner admits

that he represented Plaintiffs in silicosis claims, that their claims were part of a group of

claimants who asserted claims against insureds of The Hartford, and that settlements of

Plaintiffs’ claims against insureds of The Hartford, as well as other insured defendants, were

approved by a court-appointed special master and a court. Further, in answer to the allegations

in paragraph 14 of the Complaint, Hoeffner denies that Plaintiffs’ claims were settled “in bulk,”

that the claims of Plaintiffs herein were settled for more than $34 million, and that Hoeffner

agreed to a kickback scheme whereby the Hartford employees would be paid bribes and

Hoeffner would recover substantial attorney’s fees.

15. In answer to the allegations in the first sentence of paragraph 15 of the Complaint,

Hoeffner admits that Bilek and Bell also represented Plaintiffs herein; however, he is without

sufficient knowledge to form a belief as to the truth of the allegation that Bilek and Bell also


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represented the putative Plaintiff Class. In answer to the allegations in the second sentence of

paragraph 15 of the Complaint, Hoeffner denies the factual allegations in the referenced

indictment, Hoeffner denies that he engaged in “a kickback scheme,” and Hoeffner denies that

Plaintiffs and the putative Plaintiff Class were damaged. Hoeffner denies the balance of the

allegations in paragraph 15 of the Complaint.

16. Hoeffner denies each and every allegation in paragraph 16 of the Complaint.




20. In answer to the allegations in paragraph 20 of the Complaint, Hoeffner denies the

first independent clause and is without sufficient knowledge to form a belief as to the truth of the

allegations contained in the following dependent clause, and on that basis denies such

allegations.



Hoeffner admits that he owed a common-law duty to Plaintiffs to exercise ordinary care;

however Hoeffner specifically denies the second and third sentences of paragraph 22.




Hoeffner denies he was a fiduciary to “the Plaintiff Class”; however, he admits that he was a

fiduciary with respect to Plaintiffs herein. Further, Hoeffner specifically denies the second and

third sentences of paragraph 25.


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Hoeffner denies he was a fiduciary to “the Plaintiff Class”; however, he admits that he was a

fiduciary with respect to Plaintiffs herein. Further, Hoeffner specifically denies the second and

third sentences of paragraph 26.



29. With respect to the prayer contained on page 7 of the Complaint, Hoeffner denies

that any of the alleged acts or omissions caused Plaintiffs or the putative class members any

damages and Hoeffner denies that Plaintiffs are entitled to recover any damages or any other

relief from him.

30. Any and all allegations not specifically admitted above are denied.

II. AFFIRMATIVE DEFENSES

31. By way of affirmative defense, Hoeffner pleads accord and satisfaction.

32. Additionally, and/or alternatively, and by way of affirmative defense, Hoeffner

pleads duress.


pleads payment.


pleads release.


pleads res judicata.


pleads that statutes of limitations bar Plaintiffs’ claims.


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pleads judicial estoppel.


pleads estoppel by contract.


pleads quasi-estoppel.


pleads arbitration. Plaintiffs and Hoeffner entered an agreement to resolve any and all disputes

between them by binding arbitration pursuant to the Federal Arbitration Act.


pleads that the claims asserted by Plaintiffs and the putative class members are barred, in whole

or in part, because the conduct of third parties was the sole proximate cause, superseding and/or

intervening cause of the damages, if any, complained of by Plaintiffs and the putative class

members.


pleads that the claims asserted by Plaintiffs and the putative class members are barred, in whole

or in part, because the conduct of third parties solely caused and/or contributed to the damages, if

any, complained of by Plaintiffs and the putative class members.


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III. CROSS-CLAIM

A. Overview

1. Hoeffner brings this Cross-Claim against The Hartford for extorting $3 million

from him by and through a division of The Hartford known as Claim and Legal Management

Services (“CaLMS”), which handled general liability lawsuits and claims against The Hartford’s

insureds involving injuries related to asbestos and silica exposure, among other things.

2. Through the actions of professional claims handlers at multiple levels of the

CaLMS’s division of The Hartford, Hoeffner became a victim of an elaborate extortion scheme.

The extortion scheme involved threats to nullify favorable settlements for Hoeffner’s clients,

payments to facilitate divorces of an employee and senior executive of The Hartford, and

manipulation of an often fragile subordinate by executives within The Hartford.

3. The Hartford could have prevented the extortion scheme if it had addressed the

warning signs it ignored. Instead, employees of the Hartford held hostage the legal rights of

Hoeffner and his clients in a plan calculated to enrich themselves. Hoeffner’s reactions to the

extortion scheme all were calculated to prevent harm to his clients. In protecting his clients’

interests, he has suffered for decisions that he should not have been forced to make. Through

this Cross-Claim, he seeks to right that wrong.

B. Parties

4. Cross-Claimant Warren Todd Hoeffner is a citizen of the State of Texas.

5. Cross-Defendant The Hartford Financial Services Group, Inc. is a Delaware

corporation with its principal place of business in Hartford, Connecticut. The Hartford

committed the wrongful actions and tortious conduct alleged herein by and through its agents

and employees, including but not limited to the following individuals:


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a. David M. Cain (“Cain”) was a Vice President at The Hartford from 2001

through 2002, and headed the Hartford’s CaLMS division. In January 2003, Cain was promoted

to Senior Vice President and Special Counsel at The Hartford and continued to have oversight

responsibility for CaLMS. Cain held this position at The Hartford until the end of his

employment. At all relevant times, Cain acted as a senior executive and/or officer of The

Hartford and the actions committed by Cain, as alleged herein, were done on behalf of, and were

within the scope of his employment at, The Hartford.

b. Rachel Rossow (“Rossow”) was an employee of The Hartford within

CaLMS from 2000 until approximately September 2003. From approximately November 2000

until the end of her employment at The Hartford, Rossow was a team leader in the CaLMS,

charged with supervising several claims handlers, including John Prestage. Rossow was

specifically responsible for settling claims and for recommending to The Hartford the

appropriate and cost effective amounts to settle claims against The Hartford’s insureds whose

accounts were under her supervision. The actions committed by Rossow, as alleged herein, were

done on behalf of, and were within the scope of her employment at, The Hartford.

c. John Prestage (“Prestage”) was a claims consultant for The Hartford who

worked under Rossow’s supervision at CaLMS from 2000 until approximately January 2004.

The actions committed by Prestage, as alleged herein, were done on behalf of, and were within

the scope of his employment at, The Hartford.

C. Jurisdiction and Venue

6. Jurisdiction is proper in this Court pursuant to 28 U.S.C. § 1331 because

Hoeffner’s first cause of action pursuant to 18 U.S.C. § 1962 arises under federal law.

Jurisdiction is also proper in this Court pursuant to 28 U.S.C. § 1332 with respect to Hoeffner’s


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remaining causes of action because there is complete diversity of citizenship among the parties to

those causes of action and the amount in controversy exceeds $75,000. This Court also has

supplemental jurisdiction over Hoeffner’s state law claims under 28 U.S.C. § 1367 because the

claims are substantially related to those claims within the Court’s original jurisdiction.

7. Venue is proper in the Southern District of Texas pursuant to 28 U.S.C. §

1391(b)(2) because a substantial part of the acts and omissions giving rise to the claims asserted

herein occurred in this judicial district. However, the Corpus Christi Division of this District is

an improper forum to hear Plaintiffs’ Complaint, and Hoeffner files this Cross-Claim along with

his contemporaneously-filed motion to dismiss Plaintiffs’ Complaint based on improper venue in

light of the forum selection clause in the underlying contracts. In the alternative, Hoeffner has

moved to transfer venue to the Houston Division of the Southern District of Texas and further

has requested that this action be considered by the Honorable David Hittner, who is currently

presiding over a related criminal proceeding involving Hoeffner. In the event that the court

dismisses Plaintiffs’ Complaint or transfers it to the Houston Division, Hoeffner has also

requested that the court transfer this contemporaneously-filed Cross-Claim against The Hartford

to Judge Hittner.

D. Factual Background

8. In 1995 Hoeffner began his own law firm specializing in environmental and toxic

tort litigation. Eventually, this firm became known as Hoeffner & Bilek, LLP and operated as

Hoeffner & Bilek, LLP through 2005. In 1995, Hoeffner began developing a silicosis docket

that involved representing primarily sandblasters and foundry workers for silica-related diseases

contracted from workplace exposure to toxic silica dust. Within a matter of years, Hoeffner

became one of the leading silicosis attorneys in the nation.


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9. With each of his clients who retained him to bring a silicosis-related claim,

Hoeffner entered into a “Power of Attorney and Contingent Fee Contract.” Under these

contracts, Hoeffner and Hoeffner & Bilek, LLP agreed to pursue recovery on behalf of their

clients to compensate for their injuries, with no charge to the plaintiffs until and unless such

recovery was obtained. In exchange, Hoeffner’s clients assigned to Hoeffner & Bilek, LLP an

undivided forty percent (40%) interest in the client’s claims if collection or settlement was made

after suit was filed, and a forty-five (45%) percent interest in the event of an appeal.

Hoeffner Embarks on Strategy to Achieve Global Settlement of Silicosis Docket to Serve the Best Interests of his Clients 10. In late 2001, Hoeffner determined that it would be in the best interest of his

clients for him to attempt to reach a global settlement of all of his then-pending silicosis cases.

Hoeffner believed this settlement was necessary to avoid emerging threats to his clients’ ability

to recover for their injuries. The primary threats to his clients’ ability to recover were (i)

proposed legislation directed at limiting toxic tort claims and (ii) reports of an imminent

initiation of thousands of silicosis-related lawsuits by plaintiffs from Mississippi, which would

have diluted available recovery for what were then only a few thousand pending silicosis cases

nationwide. Both of these developments would have detrimentally impacted his clients’ ability

to obtain recovery. Hoeffner began formulating a strategy, which required the continued

management and potential resolution of approximately one thousand (1,000) silicosis claims.

11. On February 26, 2002, an initial meeting was held at the offices of Riverstone

Insurance in Manchester, New Hampshire. The purpose of this meeting was to discuss the

framework for a mutually beneficial resolution of all of Hoeffner’s clients’ silicosis cases. This

initial meeting was attended by Hoeffner and representatives from most of the major insurers,


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including AIG, Riverstone, Nationwide Indemnity, Travelers, The Hartford, Zurich North

America, St. Paul Fire & Marine and Liberty Mutual.

12. The Hartford CaLMS division sent Rossow and Prestage to the New Hampshire

meeting. Hoeffner had never met Rossow or Prestage prior to his trip to New Hampshire.

13. In Manchester, Hoeffner presented the representatives of the insurers both orally

and in writing his strategy and approach toward a global settlement of the silicosis claims of his

clients. Hoeffner also demonstrated at this meeting all the benefits to both the insureds and

insurers resulting from a resolution of Hoeffner’s clients’ claims.

14. After the February 2002 meeting in Manchester, Hoeffner spent the next several

weeks disseminating voluminous information regarding his clients’ claims to dozens of

insurance representatives and defense counsel, who represented the silicosis defendants named in

Hoeffner’s lawsuits. Specifically, Hoeffner, at the request of various insurance carriers,

forwarded computer-stored information of the claims to be settled, including a b-read report,

pulmonary exam report, social security printout and exposure information for each claimant.

15. The process of settling all of Hoeffner’s claims with all the defendants likely

required the approval of at least several hundred different individuals, including insurers, defense

counsel and the defendants’ in-house counsel and risk managers.

16. Most silicosis defendants had several policies of insurance issued by various

insurance carriers. Typically, between four to six carriers were involved in the defense of

claims. Some defendants may have had only one carrier involved while others had ten or more.

Each of the carriers had to review, digest and evaluate the information provided by Hoeffner.

17. In addition to the insurance carriers, defense counsel for each defendant/insured

had to analyze the information and make recommendations to the defendant/insured and the


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various insurance carriers involved with that particular defendant. Further, many of the

defendants had in-house counsel or risk managers who also needed to evaluate and approve the

settlements.

18. This process of ascertaining and distributing information concerning Hoeffner’s

clients’ claims took several months.

19. Meanwhile, Hoeffner also was collecting information to determine which

insurance carriers provided coverage for which defendants. Hoeffner provided demands to each

insurance carrier with a specific demand for each of their respective insureds. The settlement

demands were set in accordance with past historical settlements of similar claims between

Hoeffner clients and the respective insured/defendant.

20. In late May 2002, Hoeffner met in Nashville, Tennessee with the insurance

carriers. Counsel for a few of the defendants attended either in person or by teleconference.

21. At this meeting, the parties had significant discussions regarding the terms and

timing of a proposed settlement. These discussions were memorialized in a follow-up

memorandum from Hoeffner to representatives of The Hartford, Liberty Mutual and Riverstone

dated May 30, 2002.

22. From May 2002 through July 2002, Hoeffner engaged in serious negotiations with

several defendants regarding his global settlement proposal and sent dozens of additional packets

of information to newly identified people involved in the process.

23. Hoeffner settled his entire inventory of cases with two defendants during the

month of May. Hoeffner also received very favorable responses and commitments from several

other defendants. Because most of these settlements were greater than a million dollars, these


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deals needed several layers of approval from each insurance carrier. Accordingly, information

was disseminated to well over one hundred different individuals.

24. In August 2002, Hoeffner vacationed in California. While there, various defense

counsel met with Hoeffner as part of the negotiation and settlement process. Many of the

agreements Hoeffner was working on, in which The Hartford also had an interest, were receiving

acceptance by the other carriers, along with the insureds and their respective defense counsel.

Representatives of The Hartford Threaten to Block Settlements with Hoeffner’s Clients Unless Extortion Demands are Met 25. Rossow and Prestage also visited Hoeffner while he was on vacation in California

in August of 2002, purportedly to finalize settlement details. However, in reality, the purpose of

Rossow’s and Prestage’s trip was to make an extortion threat on Hoeffner. During this trip,

Rossow confronted Hoeffner, telling him that “we are not going to allow you to make all this

money for nothing.”

26. Although Hoeffner at first dismissed Rossow’s comments, it soon became

apparent that Rossow’s extortion threats were serious. She threatened to not only kill the deals

that involved The Hartford, but also to put a halt to Hoeffner’s negotiations with other parties.

27. During this confrontation, Rossow informed Hoeffner that she had the power to

kill the deals and there was nothing Hoeffner could do to prevent her extortionate acts because

Cain, the number one executive in charge of the CaLMS department, was her lover. Rossow

explicitly stated “my boyfriend will kill the deals and he is untouchable at The Hartford.”

28. Further, Rossow let it be known that Cain formerly worked in the general

counsel’s office at Travelers and he would persuade Travelers and other carriers to halt further

negotiations on Hoeffner’s settlements.


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29. Shortly thereafter, Hoeffner discussed Rossow’s comments with Prestage outside

of Rossow’s presence. Prestage confirmed that Rossow was having an affair with Cain, and that

Cain was a senior vice president and the individual in charge of the CaLMS division. Prestage

made it patently clear that Cain was a very powerful person at The Hartford.

30. Before the California trip ended, Rossow demanded that Hoeffner purchase her

and Prestage new automobiles. Rossow further told Hoeffner that she would require a share of

Hoeffner’s attorney’s fees from the settlements, stating that she would let Hoeffner know how

much of Hoeffner’s fees they would require at a future meeting.

31. Rossow further stated to Hoeffner that if he attempted to report her demand for

payments, it would be “your word against mine” and Prestage and Cain would back her position.

She told Hoeffner that if he failed to comply with her demands and she and Cain blocked the

settlements, she would respond to any attempt by Hoeffner to report the extortion by casting him

as a soured plaintiff’s lawyer whose deals fell through.

32. Rossow’s final threat during the California trip was to let Hoeffner know that

Cain was very active in the asbestos defense coalition, implying that Cain also had the power to

prevent future settlements of claims on the closely-related silica docket with any carriers that

were members of the coalition.

33. Unbeknownst to Hoeffner, at the time of the August 2002 meeting in California,

Rossow was having serious problems with her personal finances. Her Corporate American

Express account was cancelled for delinquent payments in July 2002. Senior executives at The

Hartford became aware of Rossow’s personal financial situation no later than November 2002, or

perhaps earlier. A November 2002 internal memorandum from The Hartford’s legal department


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notes that Rossow’s Corporate American Express account had been cancelled and that her

balance was 144 days past due.

34. After the California meeting, Hoeffner became even more convinced that the

extortionists, through Cain’s executive position, had the actual power to destroy the settlements

and thereby impede Hoeffner’s clients’ ability to recover on their claims and/or interfere with

Hoeffner’s ability to make decisions in the best interest of his clients.

35. Hoeffner’s right to make business decisions free from wrongfully imposed outside

pressure was suddenly disrupted by threats of economic loss by multiple levels of The Hartford’s

CaLMS division, including a claims handler, intermediate supervisor and the top executive.

36. Believing that the extortionists intended to exploit their power, Hoeffner

purchased two automobiles worth approximately $100,000.00, as Rossow had demanded, and

agreed to meet with Rossow and Prestage in Florida in September.

Representatives of The Hartford Spell Out Their Extortion Demands: Hoeffner’s Attorney’s Fees from the Thorstenberg Settlement 37. In September 2002, Hoeffner met Rossow and Prestage in Florida, where Rossow

spelled out her extortion terms. Specifically, she demanded Hoeffner’s attorney’s fees from the

Thorstenberg settlement, one of several settlements involving The Hartford.

38. Rossow again explicitly spelled out the consequences of non-payment and

emphasized that Hoeffner had no choice now that he had purchased the automobiles. When

questioned about her motives, Rossow stated that she and Cain were divorcing their spouses and

Cain wanted the money for their new lives.

39. When questioned about Prestage’s involvement, Rossow said Cain had Prestage

assigned to the accounts so he could act as a buffer to distance Rossow and Cain from the

extortion transactions.


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40. Rossow demonstrated the power of her threats by, among other things, conducting

phone conversations with Cain in Hoeffner’s presence in which she stated that she was “making

progress.” Later, as she made additional extortion trips, it was clear that Cain’s involvement in

the scheme was ongoing as evidenced by his and Rossow’s many telephone communications

during these trips.

41. As a result of Rossow’s threats in Florida at the first extortion trip, Hoeffner

believed the only way to prevent The Hartford from nullifying his efforts to obtain a favorable

settlement for his clients was for him to share a substantial part of the attorney’s fees to which he

was otherwise contractually entitled.

42. On or about November 26, 2002, Hoeffner issued an extortion payment by check

to Rossow in the amount of $312,500.00 and another check to Prestage in the amount of

$262,500.00. This money represented a portion of the attorney’s fees to which Hoeffner was

contractually entitled under the “Humble Sand” settlement, not the Thorstenberg settlement.

43. The reason for the use of the Humble Sand settlement proceeds was that The

Hartford was solely responsible for the Humble Sand account and Cain’s was the only approval

required for immediate funding. Therefore, the extortion payment could be paid more quickly.

44. Cain authorized payment of the settlement funds for the Humble Sand settlement

by signature on or about November 13, 2002.

45. On or about January 22, 2003, Cain authorized the second Humble Sand

settlement payment to be sent to Hoeffner.

46. Of all the numerous settlement payments received by Hoeffner from The

Hartford, only the Humble Sand settlement payments had Cain’s approval signature.


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47. On or about February 4, 2003, Hoeffner issued an extortion check in the amount

of $312,500.00 to Rossow and another check to Prestage in the amount of $265,000.00, which

together represented another portion of the attorney’s fees to which Hoeffner was contractually

entitled from the Humble Sand settlement.

48. Hoeffner was instructed by Rossow to put the following notation on the check:

“Title VII settlement with Bell and Hoeffner.” Hoeffner believed that the February 2003

payments were to be the last of the extortion payments.

49. Meanwhile, Hoeffner continued his efforts to settle with all the defendants, the

overwhelming majority of which had no involvement with The Hartford CaLMS division. No

other insurance carrier department or employee ever threatened Hoeffner like the CaLMS

division had done.

50. By February 2003, Hoeffner had successfully negotiated inventory settlements

with approximately two dozen defendants.

After Hoeffner Satisfies Extortion Demands, Representatives of The Hartford Demand a Further $175,000 Extortion Payment 51. Unexpectedly, Hoeffner received a call in mid-February 2003 from Rossow, who

demanded another in-person meeting. Hoeffner met Rossow and Prestage in Colorado shortly

thereafter. Rossow claimed during the meeting that her extortion demands had not been fully

satisfied in that she had not received an amount equal to the fees from the Thorstenberg

settlement. Hoeffner disputed Rossow’s claim.

52. Although she had received all of the extortion proceeds she previously had

demanded, Rossow now demanded an additional $175,000.00, stating that she needed these

funds for her divorce because her husband wanted a large sum of money for the equity in their

home. She stated that she and Cain would interfere with settlement fundings until she was paid.


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53. In response to Rossow’s demand, and fearing Rossow and Cain would make good

on the threats to block settlements, Hoeffner issued two checks totaling $173,250.00 to Rossow.

One was issued on February 20, 2003 and another on February 26, 2003. Prestage did not

receive a check from this Colorado encounter.

54. Prior to Rossow’s divorce becoming final in February 2003, Rossow apparently

had not deposited or cashed any of her extortion proceeds. Documents indicate that on March

10, 2003, the month after her divorce, Rossow opened an account with Cain’s friend and

longtime financial advisor John McKeon at Salomon Smith Barney and deposited some or all of

the extortion proceeds into that account. Mr. McKeon had been Cain’s financial advisor for at

least fifteen years.

Representatives of The Hartford Make a Further Extortion Threat, Demanding Part of Hoeffner’s Attorney’s Fees from the Specialty Sand Settlement 55. While Rossow was investing her money with Cain’s financial advisor, Hoeffner

continued to settle claims, and collect and distribute settlement proceeds to clients from earlier

settlements. One such settlement was with Specialty Sand Company. This silicosis settlement

was executed on or about January 30, 2003. The Hartford was not initially involved in this

settlement due to coverage issues, making Specialty Sand responsible for a percentage of the

settlement.

56. On April 15, 2003, Hoeffner wrote a letter to counsel for Specialty Sand about

overdue settlement payments. Specialty Sand’s counsel informed Hoeffner that there were

insurance coverage issues.

57. Hoeffner met with the president of Specialty Sand and its counsel on or about

April 24, 2003. It became apparent that Specialty Sand was wrongfully being denied coverage


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from First State Insurance Company (“First State”). First State is an affiliated company of The

Hartford.

58. After weeks of negotiation, Hoeffner entered into a contract with Specialty Sand

to pursue a declaratory judgment action against First State. Hoeffner was representing Specialty

Sand and he also was attempting to collect settlement proceeds for his clients who had settled

their claims against Specialty Sand.

59. Sometime in June 2003, Rossow learned Hoeffner was entering into a contract

with Specialty Sand. Rossow demanded another out of town meeting.

60. Several weeks later, in July 2003, Hoeffner met Rossow and Prestage in

California. Rossow tried to convince Hoeffner that she was in charge of the Specialty Sand

account and nothing would happen without her and Cain’s approval. Again, Rossow threatened

to kill the settlement by invoking Cain’s power. She was emphatic that Cain needed this money

to recover monetarily from his upcoming divorce.

61. Hoeffner’s contract with Specialty Sand to pursue Specialty Sand’s claims against

its insurers expired in December 2003, and any delays in resolution with the insurers would have

resulted in expiration of the contract. To prevent the loss of recovery for Specialty Sand and his

silicosis clients, who were entitled to proceeds from the Specialty Sand settlement, Hoeffner was

forced to agree to the further extortion of a portion of the attorney’s fees to which he was

contractually entitled under the Specialty Sand settlement.

62. During negotiations between Hoeffner and First State on the Specialty Sand

settlement, Rossow was terminated by The Hartford for unknown reasons. Her termination

occurred in mid-September 2003.


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63. At the time of Rossow’s termination, Cain talked Rossow out of filing a wrongful

termination claim against The Hartford by convincing her that it would be unwise to draw

attention to her involvement with the Hoeffner & Bilek law firm.

64. After her termination, Rossow contacted Hoeffner to let him know that Cain

could and would still kill the deal if he failed to meet her demands and that she and Prestage

would blame Hoeffner if he attempted to report the extortionate conduct.

65. A few weeks after Rossow’s termination, the Specialty Sand matter settled for

$20 million and was approved by the court on or about October 27, 2003.

66. When Hoeffner received the first half of the Specialty Sand settlement in

December 2003, Rossow demanded her portion of Hoeffner’s fee. Because he was under a

threat that Rossow and Cain would interfere with the funding of the second-half of the Specialty

Sand settlement, Hoeffner sent a payment to Rossow in the amount of $1,675,000.00.

Rossow and Cain Open a Joint Checking Account and Complete Dream of Living Together 67. Sometime in early 2004, Rossow and Cain opened a joint checking account at

Windsor Federal Savings and Loan Association. Both Cain and Rossow executed signature

cards authorizing each the use of the account at Windsor Federal. At the time this account was

opened, Cain was still a Senior Vice-President at The Hartford and was still married to his first

wife.

68. On or about April 7, 2004, Hoeffner wired $150,000.00 to a Rossow account at

Windsor Federal Savings and Loan. All of Rossow’s and Cain’s extortion plans and dreams

were almost complete. The only thing missing was Cain’s divorce.

69. Cain had not kept his promise to Rossow of leaving his wife to marry Rossow.

As a result of his manipulation of her and his broken promise to leave his wife, Rossow was


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distraught. Her anguish caused her to go to Cain's house while he and his wife were on vacation

and confront Cain’s teenage daughter with information about the affair and later to post bills all

over his neighborhood calling him an “adulterer.”

70. Eventually, Cain’s wife filed for divorce. Sometime thereafter, Cain and Rossow

began living together.

The Hartford’s Knowledge of, and Failure to Address, Rossow and Cain’s Improper Relationship that Fostered the Extortion Scheme 71. In February 2002 Cain admitted to high ranking executives at The Hartford that

he was engaged in an improper “mentoring relationship” with Rossow.

72. Cain told his supervisor, Jeff Morris, that he would end the relationship.

73. Despite this knowledge, The Hartford continued to allow Cain to lead the CaLMS

division and also left Rossow in the CaLMS division under Cain’s supervision.

74. The Hartford took no further action against Cain.

75. The relationship between Cain and Rossow continued despite Cain’s promise to

The Hartford executives to terminate it. Moreover, The Hartford knew that the relationship was

on-going.

76. An internal memorandum of The Hartford’s legal department styled “Legal

Confidential” memorandum and dated November 20, 2002, acknowledges Cain’s control over

Rossow. The memorandum details five pages of evidence of Cain’s affair with Rossow.

77. The November 2002 memorandum also includes a series of e-mails between Cain

and Rossow from Nov. 14, 2002. Specifically, in response to an e-mail sent by Jeff Morris

regarding a holiday party, Rossow forwarded the invitation to Cain with the question: “please tell

me this is without others.” Cain responded, “It was with last year!” Rossow replied, “It’s

amazing how a year changes things. I can’t take another year like last year – I will have a


22

complete public breakdown.” Later, after Morris sent an e-mail cancelling the party, Rossow e-

mailed Cain, “I am soooo disappointed… I am sure others are extremely relieved!” Cain

responded “everything works out with time” and Rossow replied, “one can only hope….”

78. The November 2002 memorandum demonstrates that The Hartford ignored many

other warning signs that, if addressed, would have prevented the extortion scheme. Specifically,

The Hartford knew Rossow was having financial difficulties; knew Rossow was negotiating

multi-million dollar deals with Hoeffner; knew there was an inappropriate relationship with

Cain; and knew that Cain controlled the purse strings in the CaLMS division.

79. The November 2002 memorandum summarized the legal department’s response

to the continued affair as follows: “Additional investigation may be required to further develop

these issues but could heighten the visibility of this inquiry.”

80. The Hartford did not discipline Cain.

81. The Hartford did not provide counseling for Rossow.

82. Notwithstanding Cain’s misconduct, Neil Wolin, general counsel for The

Hartford, promoted Cain in January 2003 to the position of Senior Vice President and Special

Counsel and gave him a raise.

83. Around the same time, Cain, with the knowledge of one or more high ranking

executives of The Hartford, encouraged a sexual relationship between Rossow and Cain’s

brother, who was single.

84. Meanwhile, Rossow remained a team leader at the CaLMS division.

85. Rossow and her new supervisor, the manager who The Hartford selected as

Cain’s replacement at the CaLMS division after he had been promoted, had also had an improper

work relationship in the past.


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86. Thus, despite the sexual relationships between its senior managers and employee

Rossow, The Hartford promoted Cain, replaced him with another Hartford manager who, like

Cain, had had an improper relationship with Rossow, and attempted to create a sexual

relationship between Rossow and Cain’s brother.

87. Had The Hartford followed its own internal sexual harassment policies and

properly responded on or about February 2002 when it discovered the improper relationship

between Cain and Rossow, Hoeffner would have never been victimized by Rossow and Cain’s

extortion scheme.

88. Instead, because the relationship was allowed to continue through Cain’s entire

employment with The Hartford, Hoeffner was extorted for more than three million dollars.

Despite Its Wrongful Conduct, The Hartford Substantially Benefited by Obtaining Settlements with Hoeffner’s Clients that Were Fair and Reasonable, Avoiding Millions of Dollars in Defense Costs, and Recouping Settlement Proceeds from Reinsurers 89. Despite its wrongful conduct, The Hartford substantially benefited from the

settlements with Hoeffner’s clients. The amount of the settlements were fair and reasonable to

all parties and were consistent with historical settlements between Hoeffner and The Hartford on

similar claims.

90. In fact, all but one of The Hartford settlements described herein ultimately

settled for an amount equal to or less than Hoeffner’s original demand. The one exception was

the Pulmosan settlement, the historical value of which was increased because of an interim

settlement. As described below, the Pulmosan settlement, like the other settlements was

independently recommended by defense counsel, approved by The Hartford after a roundtable

and independently deemed to be fair and reasonable by a Texas state district court.


24

91. The Hartford’s internal documents show that the Hoeffner settlements resulted in

a savings of at least $40 million in defense costs.

92. Furthermore, The Hartford, its insureds and other carriers that approved the

settlements in question all received releases from nine hundred (900) of Hoeffner’s clients.

93. The Hartford further benefited by ceding all the settlements in question to

numerous reinsurance companies, which allowed The Hartford to recover a substantial portion of

the settlement proceeds it paid to Hoeffner’s clients. It is unknown whether The Hartford

disclosed the extortion payments to its reinsurers.

94. Defense counsel for insured Mine Safety Appliances recommended the Hoeffner

settlement.

95. Defense counsel for insured Pulmosan Equipment Corporation recommended the

Hoeffner settlement.

96. Defense counsel for insured Thorstenberg Materials Company, Inc. a/k/a Ideal

Basic Industries, Inc. recommended the Hoeffner settlement.

97. Defense counsel for insured Oglebay Norton Safety Equipment Corporation

recommended the Hoeffner settlement.

98. Defense counsel for insured Gifford Hill recommended the Hoeffner settlement.

99. Defense counsel for insured Empire Abrasive Equipment Company recommended

the Hoeffner settlement.

100. Defense counsel for insured Pauli & Griffin Company recommended the Hoeffner

settlement.

101. Strasberger & Price recommended the settlement between The Hartford and

Specialty Sand Company.


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102. The Hartford had a roundtable meeting regarding the Hoeffner Pulmosan

Equipment Corporation settlement.

103. The Hartford had a roundtable meeting regarding the Hoeffner Thorstenberg

Materials Company, Inc. settlement.

104. The Hartford had a roundtable meeting regarding the Hoeffner Oglebay Norton

Safety Equipment Corporation settlement.

105. The Hartford had a roundtable meeting regarding the Hoeffner Humble Sand

Company settlement.

106. The Hartford had a roundtable meeting regarding the Hoeffner Gifford Hill

settlement.

107. The Hartford had a roundtable meeting regarding the Hoeffner Empire Abrasive


108. The Hartford had a roundtable meeting regarding the Hoeffner Pauli & Griffin

Company settlement.

109. The Hartford had a roundtable meeting regarding the Hoeffner Specialty Sand

Company settlement.

110. After the roundtable meeting, The Hartford approved the Pulmosan Equipment

Corporation settlement.

111. After the roundtable meeting, The Hartford approved the Thorstenberg Materials

Company, Inc. settlement.

112. After the roundtable meeting, The Hartford approved the Oglebay Norton Safety



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113. After the roundtable meeting, The Hartford approved the Humble Sand Company

settlement.

114. After the roundtable meeting, The Hartford approved the Gifford Hill settlement.

115. After the roundtable meeting, The Hartford approved the Empire Abrasive


116. After the roundtable meeting, The Hartford approved the Pauli & Griffin

Corporation settlement.

117. The Hartford’s insured received 900 releases from Hoeffner’s clients for the

Pulmosan Equipment Corporation settlement.


Thorstenberg Materials Company, Inc. settlement.


Oglebay Norton Safety Equipment Corporation settlement.


Humble Sand Company settlement.


Gifford Hill settlement.


Empire Abrasive Equipment Corporation settlement.

123. The Hartford’s insured received 900 releases from Hoeffner’s clients for the Pauli

& Griffin Company settlement.

124. Specialty Sand Company provided a release to The Hartford in connection with

its declaratory judgment action against The Hartford.


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125. The Hartford ceded a claim against one or more reinsurers for the Hoeffner

settlement with Pulmosan Equipment Corporation.


settlement with Thorstenberg Materials Company, Inc.


settlement with Oglebay Norton Safety Equipment Corporation.


settlement with Humble Sand Company.


settlement with Gifford Hill.


settlement with Empire Abrasive Equipment Company.


settlement with Pauli & Griffin Company.

132. The Hartford ceded the Specialty Sand Company declaratory action settlement to

one or more reinsurers.

133. The Hartford received reinsurance proceeds from one or more reinsurers after

ceding the Pulmosan Equipment Corporation claim.


ceding the Thorstenberg Materials Company, Inc. claim.


ceding the Oglebay Norton Safety Equipment Corporation claim.


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ceding the Humble Sand Company claim.


ceding the Gifford Hill claim.


ceding the Empire Abrasive Equipment Company claim.


ceding the Pauli & Griffin Company claim.


ceding the Specialty Sand Company claim.

141. The Hartford continued ceding claims information to its reinsurers on the

Hoeffner settlements after it had knowledge of Hoeffner’s payments to Prestage or Rossow.

142. The Hartford continued receiving reinsurance proceeds from the Hoeffner

settlements after it had knowledge of Hoeffner’s payments to Prestage or Rossow.

143. The Hoeffner silicosis settlements were recommended by a special master as

being fair and reasonable.

144. The Hoeffner silicosis settlements were approved by a Texas State district court

as fair and reasonable.

145. The settlement between The Hartford and Specialty Sand Company was

determined by a Texas State district court to be fair and reasonable.


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E. Causes of Action

-FIRST CAUSE OF ACTION- RACKETEER-INFLUENCED AND CORRUPT ORGANIZATION (“RICO”)

(18 U.S.C. § 1962(c))

146. Paragraphs 1 through 145 of this Cross-Claim are hereby realleged and

incorporated as set forth in full herein.

147. Hoeffner is a person who may bring a RICO claim under 18 U.S.C. §§ 1961(3)

and 1962(C).

148. Hoeffner has standing to assert this Cross-Claim as a direct victim of extortion.

Hoeffner also owns all of Hoeffner & Bilek’s rights to assert its Cross-Claim. Specifically,

Hoeffner & Bilek’s operating agreement states “Hoeffner solely owns all future rights to any

claim against The Hartford.”

149. The Hartford and its officers, agents and employees are persons within the

meaning of U.S.C. §§ 1961(3) and 1962(C).

150. CaLMS is a RICO enterprise within the meaning of 18 U.S.C. § 1961(4) and

1962(C) (the “CaLMS enterprise”). During all relevant times, the CaLMS enterprise was

engaged in, and its activities were affected by, interstate commerce.

151. At all relevant times, The Hartford conducted or participated, directly or

indirectly, in the conduct of the CaLMS enterprise’s affairs through a “pattern of racketeering

activity” within the meaning of RICO, 18 U.S.C. § 1965(5), in violation of RICO, 18 U.S.C. §

1962(C).

152. Specifically, at all relevant times, The Hartford and its employees, agents and

officers engaged in “racketeering activity” within the meaning of 18 U.S.C. § 1961(1) by

engaging in acts which constitute a violation of 18 U.S.C. § 1951 (extortion).


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153. Defendant The Hartford conducted the affairs of the CaLMS enterprise through a

pattern of racketeering activity involving extortion in violation of 18 U.S.C. § 1951. The pattern

of racketeering activity is evidenced by The Hartford’s use of fear and threats to obtain money

and property from Hoeffner. The pattern of racketeering activity began at least as early as

August 2002 and continued through April 2004. The predicate acts committed by Defendants

are related and continuous, and amount to or threaten long-term criminal activity. The pattern of

racketeering activity includes, but is not limited to, the following acts:

Extortion: 18 U.S.C. § 1951

154. Defendant, The Hartford, obstructed or affected commerce through extortion.

Specifically, The Hartford obtained property from Mr. Hoeffner, with his consent, induced by

wrongful threats and fear.

155. The Hartford unlawfully committed extortion by inducing Hoeffner to make

payments to The Hartford’s agents and employees through at least four wrongful threats of force

and fear made between July 2002 and April of 2004:

a. In August 2002, The Hartford made its initial threat that it would interfere

with Hoeffner’s settlements with the Hartford and with other insurance

agencies if Hoeffner did not agree to its demands. As a result of these threats,

Hoeffner was induced to purchase two new automobiles for The Hartford’s

agents, Rossow and Prestage.

b. In September 2002, The Hartford made another threat to withhold settlement

and interfere with settlements from other insurers if Hoeffner refused to meet

The Hartford’s demands.


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c. In mid-February 2003, during a meeting with Mr. Hoeffner in Colorado, The

Hartford made yet another threat, demanding still more money or The

Hartford would withhold settlement.

d. In July 2003, The Hartford again demanded a meeting with Mr. Hoeffner and,

in that meeting, threatened to halt Mr. Hoeffner’s impending settlement with

First State Insurance Company (an affiliate of The Hartford) if Mr. Hoeffner

refused to meet The Hartford’s demands.

156. Given the power and influence of The Hartford and its executives within the

insurance community, Mr. Hoeffner reasonably believed that the Hartford would, in fact, harm

Mr. Hoeffner’s settlements with The Hartford and with other insurers, thereby causing his clients

severe economic harm. Based on these threats, Hoeffner was induced to make the following

payments:

a.) Check dated 11/26/02 in the amount of $262,5000.00;

b.) Check dated 11/26/02 in the amount of $312,5000.00;

c.) Check dated 2/4/03 in the amount of $265,000.00;

d.) Check dated 2/4/03 in the amount of $312,500.00;

e.) Check dated 2/20/03 in the amount of $25,000.00;

f.) Check dated 2/26/03 in the amount of $148,750.00;

g.) Check dated 12/5/03 in the amount of $1,675,000.00; and

h.) Wire transfer on or about 4/7/04 in the amount of $150,000.00.

157. The Hartford’s multiple acts of extortion affected interstate commerce in many

aspects, including but not limited to: the use of interstate common carriers to carry out the

extortion scheme; the use of bank wire transfers across state lines; and the depositing of checks


32

drawn on out of state bank accounts. In addition, The Hartford’s extortion scheme affected the

settlement of legal claims in Texas from its headquarters in Connecticut.

158. The above acts of racketeering activity constituted a “pattern of racketeering

activity” within the meaning of 18 U.S.C. § 1961(5). The acts alleged were related to each other

by virtue of common participants, common victims, a common method of commission, and the

common purpose and common result of extorting Hoeffner for over $3 million, causing a

significant injury to Hoeffner. Moreover, these acts were continuous for a period of over 15

months. Accordingly, The Hartford’s actions amount to or threaten long-term criminal activity

insofar as they demonstrate a number of closely related criminal acts over a long period of time,

and demonstrate a regular pattern of business activity by The Hartford.

159. The scheme to extort Hoeffner involved multiple levels of the CaLMS division

including claims handlers, intermediate supervisors and the top executive in the CaLMS division,

who was also a Senior Vice-President of The Hartford.

160. The CaLMS enterprise through its racketeering activity benefited The Hartford by

reducing or exhausting coverage on policies of insurance which The Hartford determined costly

to the corporation. These benefits are reflected in lost/cost saving reports and spreadsheets.

161. The Hartford’s actions proximately caused injury to Plaintiffs’ business and

property.

162. Pursuant to 18 U.S.C. § 1964(c), Plaintiffs are entitled to recover threefold the

damages sustained, plus costs including attorneys’ fees, from Cross-Defendant The Hartford.

- SECOND CAUSE OF ACTION - ECONOMIC DURESS/BUSINESS COERCION




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164. The actions taken by The Hartford, as set forth above, were without legal

justification and imposed economic duress on Hoeffner because they constituted illegal and

imminent threats that destroyed Hoeffner’s free will, leaving him with no other choice but to

agree to the demands of the extortionists.

165. Specifically, The Hartford, by and through its agents, threatened Hoeffner to

make extortion payments, which it had no legal right to do and which Hoeffner would not

otherwise have done had he not feared the threats of The Hartford’s employees, which would

have led to the total destruction of the settlements on behalf of Hoeffner’s clients.

166. The extortion payments, as demanded by The Hartford, by and through its agents,

constituted an illegal and wrongful exaction of over $3 million.

167. The threats made by The Hartford, by and through its agents, were so imminent

that Hoeffner’s free agency was destroyed to such an extent that he was without means to protect

himself. Indeed, failing to agree to the demands of The Hartford would have resulted in the

destruction of favorable settlements between The Hartford and potentially other insurers and

Hoeffner’s clients. To prevent harm to Hoeffner’s clients, Hoeffner was left with no other

choice but to acquiesce to the demands of the extortionists.

168. The economic duress imposed by The Hartford has caused damages to Hoeffner.

Specifically, the economic duress imposed by The Hartford forced Hoeffner to pay over $3

million in extortion payments in order to avoid the financial losses to his client’s settlements that

would result from the extortionate threats; to incur legal fees and expenses for the defense of

civil and criminal actions filed against him because of the extortion payments; loss of income,

including from being required to waive additional cases as a result of criminal allegations; and to

suffer mental anguish, public humiliation, embarrassment and anxiety.


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- THIRD CAUSE OF ACTION - NEGLIGENCE AND GROSS NEGLIGENCE



170. The Hartford owed a duty or legal obligation, to the general public, including

Hoeffner, to exercise ordinary care in supervising, retaining and training its employees or agents,

including but not limited to, Cain, Rossow and Prestage.

171. The Hartford breached its duties of ordinary care by, among other things, failing

to supervise its employees and by fostering an environment under which it was foreseeable that

the extortion scheme could occur. Specifically, The Hartford ignored the following warning

signs that, if properly addressed, would have prevented the extortion scheme: (i) that Rossow and

Cain were having an improper sexual relationship; (ii) that Rossow was having significant

difficulties with her personal finances and had shown evidence of being psychologically

unstable; (iii) that Rossow was nonetheless being allowed to negotiate settlements worth millions

of dollars on behalf of The Hartford; and (iv) that the settlements Rossow was negotiating could

have been approved or disapproved at the sole discretion of her paramour, Cain.

172. The Hartford’s breach of its duties of ordinary care proximately caused

Hoeffner’s damages. Specifically, but for The Hartford’s breach, Hoeffner would not have been

required to pay the extortion demands of its employees/agents or suffer the various damages set

forth below. Furthermore, given The Hartford’s knowledge of the improprieties of its employees

and agents, including Cain, Rossow and Prestage, as alleged above, and its failure to adequately

supervise them, The Hartford should have anticipated the danger it created which ultimately led

to the injuries sustained by Hoeffner.


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173. The actions of The Hartford in failing to supervise its employees and agents was

so extreme as to amount to recklessness and/or a conscious indifference to the rights, safety or

welfare of others, including Hoeffner. Accordingly, The Hartford is liable for gross negligence

and/or malice.

174. As a result of the negligence and/or gross negligence committed by The Hartford,

Hoeffner is entitled to an award of actual damages for his injuries, including but not limited to

pecuniary losses from the extortionists’ demands, past mental anguish, loss of earning capacity,

and legal fees required to defend various civil and criminal actions as a result of The Hartford’s

unlawful acts. Hoeffner is also entitled to an award of exemplary damages under Chapter 41 of

the Texas Civil Practice and Remedies Code because The Hartford's tortious actions amounted to

gross negligence and/or malice.

- FOURTH CAUSE OF ACTION - TORTIOUS INTERFERENCE WITH THE ATTORNEY-CLIENT RELATIONSHIP



176. Hoeffner entered into a “Power of Attorney and Contingent Fee Contract” with

each of the plaintiffs, whereby Hoeffner agreed to represent the plaintiffs in silicosis and

asbestosis-related litigation. Hoeffner agreed to “sue for and recover all damages and

compensation to which the Client may be entitled as well as compromise and settle all claims for

home, household, property and person,” and the plaintiffs agreed to convey to Hoeffner an

undivided forty percent interest in all of the plaintiffs’ claims and causes of action, and forty-five

percent in the event of an appeal.


36

177. The Hartford had knowledge of the attorney-client relationship that existed

between Hoeffner and the plaintiffs when Hoeffner approached The Hartford about entering into

a settlement agreement with the plaintiffs.

178. The Hartford willfully and intentionally asserted improper influence over

Hoeffner when The Hartford, by and through its agents, extorted money from Hoeffner to

prevent The Hartford from blocking settlements with his clients.

179. The Hartford’s intentional interference with Hoeffner’s attorney-client

relationship with the plaintiffs caused Hoeffner to incur damages, including but not limited to the

amount of the extortion payments.

180. The Hartford acted with malicious intent when it extorted money from Hoeffner.

- FIFTH CAUSE OF ACTION - TORTIOUS INTERFERENCE WITH CONTRACT



182. Hoeffner entered into a “Power of Attorney and Contingent Fee Contract” with

each of the plaintiffs, whereby Hoeffner agreed to represent the plaintiffs in silicosis and

asbestosis-related litigation. Hoeffner agreed to “sue for and recover all damages and

compensation to which the Client may be entitled as well as compromise and settle all claims for

home, household, property and person, and the plaintiffs agreed to convey to Hoeffner an

undivided forty percent interest in all of the plaintiffs’ claims and causes of action, and forty-five

percent in the event of an appeal.

183. The Hartford had knowledge of the contracts entered into between Hoeffner and

the plaintiffs when Hoeffner approached The Hartford about entering into a settlement agreement

with the plaintiffs.


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184. The Hartford willfully and intentionally committed acts calculated to cause

damage to Hoeffner in his lawful business. Specifically, The Hartford, by and through its agents,

threatened to block settlements with Hoeffner’s clients unless Hoeffner made the extortion

payments.

185. The Hartford’s intentional interference with Hoeffner’s contract with the plaintiffs

caused Hoeffner to incur damages, including but not limited to the amount of the extortion

payments.

186. Further, The Hartford acted with malicious intent when it extorted money from

Hoeffner.

PRAYER

WHEREFORE, Hoeffner prays for judgment against The Hartford for:

(i) Compensatory damages caused by The Hartford’s wrongful conduct, including economic damages, which shall be trebled pursuant to RICO;

(ii) Exemplary damages in an amount to be determined at trial;

(iii) Attorney’s fees, costs and other expenses permitted by law;

(iv) Pre-judgment and post-judgment interest as permitted by law; and

(v) Such other and further relief as may be just and proper

Respectfully submitted, /s/ Chris Flood Chris Flood State Bar No. 07155700 Southern District Bar No. 9929 914 Preston, Suite 800 Houston, Texas 77002-1832 Telephone: (713) 223-8877 Telecopier: (713) 223-8879 ATTORNEY-IN-CHARGE FOR DEFENDANT, WARREN TODD HOEFFNER


38

OF COUNSEL: John Flood State Bar No. 07155910 Southern District Bar No.12593 FLOOD & FLOOD 802 N. Carancahua, Suite 900 Corpus Christi, Texas 78470 Telephone: (361) 654-8877 Telecopier: (361) 654-8879 Lynne Liberato State Bar No. 00000075 Southern District Bar No. 3072 Kent Rutter State Bar No. 00797364 Southern District Bar No. 20519 Mark Trachtenberg State Bar No. 24008169 Southern District Bar No. 24584 HAYNES AND BOONE, LLP 1221 McKinney Street, Suite 2100 Houston, Texas 77010-2007 Telephone: (713) 547-2000 Telecopier: (713) 547-2600 R. Thaddeus Behrens State Bar No. 24029440 HAYNES AND BOONE, LLP 901 Main Street, Suite 3100 Dallas, Texas 75202-3789 Telephone: (214) 651-5000 Telecopier: (214) 651-5940 ATTORNEYS FOR DEFENDANT, WARREN TODD HOEFFNER


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CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing document was filed with the Court’s ECF system and served (1) via electronic transmission by the Court on those parties authorized to participate and access the Electronic Filing System for the Southern District of Texas, and (2) via e-mail or facsimile on the parties appearing below on this 15th day of October, 2007: Counsel for Plaintiffs: Jeffrey D. Meyer MOULTON AND MEYER LLP 600 Travis Street, Suite 6700 Houston, Texas 77002 [email protected] Christopher A. Bandas BANDAS LAW FIRM, P.C. 500 N. Shoreline Blvd., Suite 1020 Corpus Christi, Texas 78471 [email protected]

Counsel for Defendants Thomas E. Bilek and Hoeffner & Bilek, LLP: Darrell L. Barger HARTLINE, DACUS, BARGER, DREYER & KERN, L.L.P. 800 N. Shoreline Blvd., Suite 2000N Corpus Christi, Texas 78401 [email protected]

Counsel for Defendant The Hartford Financial Services Group, Inc.: Robert C. Walters Vanessa M. Griffith VINSON & ELKINS LLP 2001 Ross Avenue, Suite 3700 Dallas, Texas 75201-2975 Via Facsimile: (214) 999-7704 [email protected]

Counsel for Defendants James P. “Buddy” Bell and Buddy Bell Attorney at Law: Stephen E. McConnico Cynthia Saiter Connolly SCOTT, DOUGLASS & MCCONNICO, L.L.P. 600 Congress Avenue, Suite 1500 Austin, Texas 78701 [email protected] [email protected]

/s/ Chris Flood Chris Flood D-1585321.5
