Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-02620/USCOURTS-caed-2_05-cv-02620-8/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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STIPULATION FOR ENTRY OF JUDGMENT - HAGOSIAN 

{00280888.DOC v 4}

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FRIEDMAN DUMAS & SPRINGWATER LLP 

ROBERT L. FLEISCHMAN (S.B. NO. 80045) 

CECILY A. DUMAS (S.B. NO. 111449) 

BRANDON C. CHAVES (S.B. NO. 225595) 

150 Spear Street, Suite 1600 

San Francisco, CA 94105 

Telephone Number: (415) 834-3800 

Facsimile Number: (415) 834-1044 

Attorneys for Plaintiffs 

SECURITY INSURANCE COMPANY OF 

HARTFORD, THE FIRE & CASUALTY 

INSURANCE COMPANY OF CONNECTICUT, 

THE CONNECTICUT INDEMNITY COMPANY 

UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF CALIFORNIA 

SECURITY INSURANCE COMPANY 

OF HARTFORD, a corporation; The 

FIRE & CASUALTY INSURANCE 

COMPANY OF CONNECTICUT, a 

corporation; and THE CONNECTICUT 

INDEMNITY COMPANY, a corporation, 

 Plaintiffs, 

vs. 

CIBUS INSURANCE SERVICES, INC., 

a corporation; GEORGE P. HAGOSIAN, 

an individual; and JASON A. 

GAMACHE, an individual, 

 Defendants. 

Case No. 2:05-CV-02620 DFL DAD 

STIPULATION FOR ENTRY OF 

JUDGMENT AND DISMISSAL 

BETWEEN PLAINTIFF AND 

DEFENDANT GEORGE HAGOSIAN 

 Plaintiff, Security Insurance Company of Hartford (“Security”) and Defendant, 

George Hagosian (“Hagosian”), (Security and Hagosian, the “parties”) stipulate as follows: 

 I. RECITALS

 This Stipulation is entered into upon the basis of the following facts, 

understandings, and intentions of the parties: 

 A. Security is an insurer licensed in California to issue various types of 

insurance coverages, including workers compensation insurance. 

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STIPULATION FOR ENTRY OF JUDGMENT - HAGOSIAN 

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 B. In 2000 and 2001, Cibus Insurance Services, Inc. (“Cibus”) was an 

insurance agency operating in the State of California. Hagosian was Cibus’ Chief Executive 

Officer during that time period and was a member of Cibus’ Board of Directors and a 

shareholder in Cibus. 

 C. In 2000 and 2001, Cibus entered into certain Program Administrator 

Agreements with Security, The Fire & Casualty Insurance Company of Conneticut(“FCIC”), 

and The Connecticut Indemnity Company (“CIC”, and together with FCIC and Security, the 

“Plaintiffs”). Plaintiffs subsequently merged into a single entity with Security emerging as 

the surviving entity. Under the Program Administrator Agreements, Cibus acted as Plaintiffs’ 

agent from January 1, 2000 through December 31, 2001. As Plaintiffs’ agent, Cibus was 

authorized to underwrite and sell workers compensation insurance on behalf of Plaintiffs, and 

to bill, collect and hold insurance premium funds as Plaintiffs’ fiduciary and to report the 

same on a monthly basis to the Plaintiffs. 

 D. In connection with the Program Administrator Agreements, Plaintiffs 

entered into a Quota Share Treaty Reinsurance Agreement (the “Reinsurance Agreement”) 

with Sinser Insurance Company (“Quest”) pursuant to which Quest agreed to accept a 

substantial portion of the risk assumed by Plaintiffs in policies issued by the Plaintiffs. Cibus 

guaranteed certain of Quest’s obligations to Plaintiffs pursuant to a Captive Reinsurance 

Guaranty and Indemnity Agreement (the “Guaranty”) executed by Cibus. 

 E. Certain disputes have arisen between Plaintiffs and Cibus, Hagosian, 

and Jason A. Gamache (“Gamache,” and together with Hagosian and Cibus, the 

“Defendants”) concerning the Program Administrator Agreements, Reinsurance Agreement, 

and Guaranty. As a result of the disputes, on December 27, 2005, Plaintiffs commenced this 

action (the “Action”) against the Defendants. 

 F. Plaintiffs’ complaint alleges that, as a result of the acts and/or omissions 

of Cibus, Hagosian, and Gamache, Plaintiffs have suffered damages in an amount in excess of 

$1.8 million. Plaintiffs have asserted claims for breach of the Program Administrator 

Agreements against Cibus, claims for amounts due under the Guaranty against Cibus and 

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STIPULATION FOR ENTRY OF JUDGMENT - HAGOSIAN 

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Hagosian, and claims for breach of fiduciary duty, tortious interference with contractual 

relationship, negligent misrepresentation, and conversion against Cibus, Hagosian, and 

Gamache. 

 G. A default has been entered against Cibus, and Magistrate Judge Dale A. 

Drozd has made findings of fact and recommendations that a judgment in the amount of 

$1,817,236.75 be entered against Cibus. Hagosian does not dispute that Plaintiffs have 

suffered losses of over $1.8 million as a result of Cibus’ failure to pay under the Guaranty, 

but strongly disputes that he personally committed any wrongful acts or has any personal 

liability for either Cibus or co-defendant Gamache’s alleged wrongful conduct. 

 H. To settle and resolve any and all claims and controversies between 

Security and Hagosian arising out of, connected with, or otherwise related to this Action, 

Hagosian and Security have entered into a Confidential Settlement and Release Agreement 

(“Settlement Agreement”) whereby Hagosian has agreed to make certain payments to 

Security. Hagosian further agreed that a judgment may be entered against him as set forth in 

this stipulation if he failed to make payments according to the Settlement Agreement. 

 BASED ON THE FOREGOING RECITALS, THE PARTIES AGREE AS 

FOLLOWS: 

 1. Payment. Hagosian will pay to Security the amounts set forth in the 

Settlement Agreement. 

 2. Dismissal. Upon Hagosian’s complete performance of all obligations 

under the Settlement Agreement, Security will dismiss this Action with prejudice with respect 

to Hagosian. 

 3. Entry of Judgment. If Hagosian fails to make any payment as set forth 

in paragraph 1, then Security may, at any time and without further notice to Hagosian, make 

an ex parte application to the Court to enter a final judgment in the amount of nine hundred 

thousand dollars ($900,000.00) in the form attached hereto as Exhibit A. The written 

declaration of Security or its attorney shall be prima facie proof that Hagosian has failed to 

make payments as required by the Settlement Agreement. 

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STIPULATION FOR ENTRY OF JUDGMENT - HAGOSIAN 

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 4. Miscellaneous. 

 (a) Judgment May Be Non-Dischargeable In Bankruptcy. Hagosian 

acknowledges that he is aware that under Section 523(d) of the Bankruptcy Code (11 U.S.C. § 

101 et seq.), a discharge under Sections 727, 1141, 1228(a), 1228(b), or 1328(b) of the 

Bankruptcy Code does not discharge an individual debtor from any debt for fraud or 

defalcation while acting in a fiduciary capacity, for embezzlement, or larceny. 

 (b) Additional Documents. Each of the parties agrees to execute 

such other and further documents as may be reasonably required by the other parties to carry 

out the purposes and intent of this Stipulation, or to evidence anything contained herein. 

 (c) Counterparts. This Stipulation may be executed in counterparts, 

and when a counterpart has been executed by each of the parties, the counterparts so executed 

shall constitute a fully binding and complete Stipulation. Signature pages may be delivered 

separately in original, photocopy, or fax, and are effective when so delivered. 

APPROVED AS TO FORM AND CONTENT 

LAW OFFICES OF MATTHEW WERTHEIM 

By: Matthew Wertheim 

As counsel for George Hagosian 

Dated: March ____, 2007 

George Hagosian 

Dated: March ____, 2007 

APPROVED AS TO FORM AND CONTENT 

FRIEDMAN DUMAS & SPRINGWATER LLP 

By: Robert L. Fleischman 

As counsel for Security Insurance Company of 

Hartford 

Security Insurance Company of Hartford 

By: _________________ 

Dated: March ____, 2007 

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STIPULATION FOR ENTRY OF JUDGMENT - HAGOSIAN 

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Dated: March ____, 2007 

IT IS SO ORDERED 

/s/ David F. Levi 

UNITED STATES DISTRICT COURT JUDGE 

Dated: April 26, 2007 

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