Nicholas Malfitano Jan. 28, 2016, 2:26pm


PHILADELPHIA – A decision from U.S. District Court Judge Paul S. Diamond is forthcoming in a contempt hearing involving parties representing and funding the pursuit of a Liberian multimillion-dollar insurance judgment, a verdict which Diamond has said violates a federal court injunction.

The hearing took place on Tuesday afternoon in the U.S. District Court for the Eastern District of Pennsylvania, at the James A. Byrne Federal Courthouse in Philadelphia.

Diamond had ordered respondents Martin Kenney, Samuel M. Lohman and Garrett Kelleher to appear at the hearing and show cause why they should not be found in contempt of a 2001 injunction forbidding legal action against Cigna Worldwide Insurance Company (CWW), or face “fines or other sanctions.”

Through their respective attorneys, Kenney and Lohman submitted correspondence indicating they did not plan to attend the hearing, feeling it would subject them to federal court jurisdiction in the United States. Kelleher is representing himself in this matter.

The case history began in 1991, when plaintiff Abi Jaoudi and Azar Trading Corporation (AJA), owner of commercial property in Liberia, brought action against CWW, in connection with damage the plaintiffs' commercial properties sustained in the Liberian civil war.

After a jury verdict for AJA, Judge Thomas N. O’Neill Jr. reversed its findings and entered a judgment in favor of CWW, finding the property damage was subject to the policy’s war risk exclusion.

However, AJA later refiled the case against CWW in a Liberian court and won a judgment of $66.5 million in 2000. When AJA tried to enforce the judgment, O’Neill issued an injunction in 2001, prohibiting any and all attempts to collect the $66.5 million judgment award in question.

The following year, a Liberian court reaffirmed the multimillion-dollar judgment and labeled O’Neill’s injunction “unenforceable”.

Diamond alleges Kenney, a dual Irish and Canadian citizen based in the British Virgin Islands who practiced as a foreign legal consultant in New York, and Lohman, a United States citizen and a member of the Oregon bar with an office in Switzerland, “acted in concert to violate O’Neill’s injunction.”

In February 2005, Kenney and Lohman formed CC International Ltd., an entity to “obtain access to a court of neutral jurisdiction to determine the validity of their claims” – such as the enforceability of the $66.5 million Liberian judgment.

In return for CCI stock, AJA assigned CCI title to rights to receive proceeds from the enforcement of the enjoined Liberian judgment.

In November 2008, CWW filed a motion for contempt against AJA, a Liberian receiver, Lohman and others for violating O’Neill’s injunction.

CWW also sought to identify the funders of the efforts to enforce the Liberian judgment. After a long discovery process, it was learned in August 2014 that Garrett Kelleher, an Irish property developer, had invested $2.85 million in efforts to enforce the aforementioned Liberian judgment.

Funds from Echemus Investment Management Ltd., an investment vehicle Kenney had created “to fund various cross-border asset recovery claims,” supplemented Kelleher’s funding. On Nov. 12, 2014, CWW personally served Kelleher in Ireland with papers naming him as a contempt party.

At the hearing, Gary M. Miller, counsel for Kenney, said there was no dispute with Diamond’s order for his client to appear in “material respects,” but rather in “characterization.”

In his reply, Diamond figuratively remarked he “had never seen a case where people kill their parents and then claim for sympathy being an orphan” as this one.

Diamond said to Miller, “Your client appeared to conspire to violate Judge O’Neill’s order. He is flagrantly violating an order of this court.”

Miller explained by the time Kenney, who represents fraud victims, was hired in the case, there were both conflicting judgments and injunctions in play – from courts on two different continents.

Miller added both courts were “entitled to equal respect and dignity.”

However, Diamond stated his view that the Liberian judgment “insulates the person violating the U.S. judgment because it's later in time.”

In this proceeding, Mark E. Gottlieb also spoke on behalf of his client Lohman, explaining Lohman had a “good faith basis” that any compliance with U.S. District Court discovery requests with respect to production of documents, or appearing for a deposition “would violate Swiss law and arguably, be criminal” – even a hypothetical in-camera review of said documents, as Diamond posited in reply.

“He was simply trying to adhere to the law,” Gottlieb emphasized.

Gottlieb further said Lohman wasn’t an involved party to this matter when the Liberian judgment was reached in 1998 and also disagreed with the U.S. District Court’s “characterization” of the case.

Gottlieb stated he and his client understood the importance of the court order, but labeled it “a tactical move” on CWW’s part and reiterated Lohman “had bonafide jurisdictional concerns” about appearing in the U.S. District Court.

Diamond replied, “He should have thought about that when he joined with others to violate Judge O’Neill’s order.”

Donald W. Hawthorne, representing CWW, said in his view the respondents’ actions came back to the central concept that “they knew about the court order and thought they could get away with” violating it.

“The continued pattern of disrespect here for U.S. court orders is overwhelming,” Hawthorne said.

Hawthorne stated his personal belief Kelleher took comfort in being told that no one would discover his identity, a revelation made through discovery which Hawthorne said was “an odyssey that took years.”

Hawthorne singled out Lohman’s role in the situation as “shocking," as a U.S. citizen and member of the Oregon State Bar in apparent violation of a U.S. District Court order.

“He had to be aware of the court order and aware he would be sanctioned,” Hawthorne said.

When Diamond inquired of Hawthorne what penalties he was asking the court to impose, Hawthorne replied it would be necessary for the Court to determine compensatory damages and hold Kenney, Lohman and Kelleher jointly and severally liable. The penalties would include legal fees, expert fees and costs.

However, Hawthorne asked for the assistance of the Court, before further suggesting a course of action.

With no other members of either side’s counsel addressing the court, Diamond adjourned the proceedings.

“I appreciate all the work you’ve done in this case and I’m sure your clients do also,” Diamond said, to both sides’ members of counsel in attendance.

U.S. District Court for the Eastern District of Pennsylvania case 2:91-cv-06785

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com

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