An insurance company has voluntarily dismissed a lawsuit it brought against a collection operation it sued last year, seeking a declaratory judgment that it was not responsible for covering the company in a class-action lawsuit that had been filed against it.
A copy of the order dismissing the suit in the case of United States Liability Insurance Company v. Gerhardt and Associates, d/b/a Maredith Management can be accessed by clicking here.
The underlying lawsuit was filed back in 2017 and is now on its fifth amended complaint. It accuses the defendants of violating state law in Maryland as well as the Fair Debt Collection Practices Act by using promissory notes with confessed judgment clauses to collect unpaid dues for homeownership association fees. A confessed judgment allows the creditor to obtain a judgment against the debtor without advanced notice of a hearing, essentially forcing the debtor to waive his or her rights to assert a defense.
The fifth amended complaint was filed in February 2021. The insurance company provided coverage to the collection operation between October 2020 and October 2021. The insurance company issued an errors and omissions policy to the collector, but the policy included an exclusion for any class-action lawsuit that was filed against the collector.
The insurance company’s suit sought a declaratory judgment indicating that the coverage for the collector was not available.
But then, last week, it filed the stipulation of voluntary dismissal. The plaintiff had filed a motion for summary judgment and the defendant had filed a motion to dismiss for failure to state a claim, but neither motion had been ruled on yet. Nothing had happened on the case since last October, when the case was reassigned to a different District Court judge in Maryland.
