Weule

MEMORANDUM *

John D. Nordstrom (“Nordstrom”) owned and operated two related entities, International Insurance Underwriters, Inc. (“IIU”) and International Insurance Underwriters of Washington, Inc. (“IIUW”). IIU was a licensed insurance broker in the State of California. IIUW was the managing general agent of several alien insurance companies not admitted in California but nevertheless selling automobile insurance in the state.

Aaron Weule (‘Weule”) was injured in an automobile accident in Oakland, California. The driver of the other automobile, Mr. Moscoso (“Moscoso”), had purchased an insurance policy from Kingham Atlantic National Insurance Company (“KAN”), a company incorporated in the British Virgin Islands. KAN sold insurance in California through IIUW, its managing general agent.

Weule sued Moscoso in California state court for negligence, and obtained a default judgment of approximately $45,000. In trying to recover the judgment from Moscoso and his insurance carrier, Weule discovered that KAN was insolvent. Weule filed a state court complaint against Nordstrom, IIU, and IIUW, alleging that Nordstrom had intentionally engaged in a fraudulent scheme to sell underfunded…