Holocaust Victim’s Heirs Settle Suit

A Jewish family has settled the first individual lawsuit filed against a European insurer stemming from failure to pay a claim based on a policy issued during the Holocaust era.

On Monday night, William Shernoff, a Claremont attorney who represents the heirs of a wealthy Czech winemaker, sent a letter to Los Angeles Superior Court Judge S. James Otero informing him that the Stern family’s suit against Assicurazioni Generali of Trieste, Italy, had been resolved.

Neither Shernoff nor any members of the family, who live in Los Angeles, New York, Miami, Israel and London, would disclose the size of the settlement. But Adolf Stern, 82, of Queens, N.Y., said it was far less than the $135 million the seven plaintiffs had asked for in the suit.

“They’re not doing me a favor; they’re doing themselves a favor,” Stern said of Generali’s decision to settle. “I have had a heart attack. I don’t want to be aggravated all my life.”

Shernoff and Stern family members called the agreement a landmark development.

“This settlement is a major breakthrough for the Holocaust insurance cases,” said Shernoff, particularly because the Stern litigation was the lead case of eight filed against Generali in California.

Shernoff’s co-counsel Lisa Stern, whose husband is the grandson of the family patriarch, who died in the Holocaust, said, “It’s gratifying that after a long, hard battle, the members of this family can have a small measure of justice.”

Peter Simshauser, a Los Angeles attorney representing Generali, would not comment on the significance of the case but confirmed that it had been settled.

He said the settlement is in line with the company’s efforts to resolve Holocaust-era matters. Much of that effort, he said, comes through participation in the work of a recently formed international commission headed by former U.S. Secretary of State Laurence Eagleburger.

Another source close to Generali said the company has already made offers to pay 230 Holocaust-related claims of individuals throughout the United States and in Israel. The source said Generali has “made payments as high as $75,000” in claims not filed in court.

Shernoff predicted that seven other court cases against Generali would be settled by the end of the year.

He also said that, because of the efforts of California Insurance Commissioner Chuck Quackenbush, Generali will make public by the end of the year a list of 66,000 insurance policies that the company issued during the Holocaust era.

Shernoff said this would provide critical information that could enable many other Holocaust survivors and the heirs of people murdered in German death camps to file claims on those policies.

Quackenbush has been very supportive of the Stern suit, and hired a special outside counsel to assist the family in a portion of the case.

Generali and seven other insurers are scheduled to appear under state subpoena at hearings Dec. 1 and 2 in Los Angeles and San Francisco.

The companies are “to report on their readiness to provide detailed policyholder information” for a Holocaust insurance registry that is to go into effect in April under a bill by Assemblyman Wally Knox (D-Los Angeles). The measure was passed overwhelmingly by the Legislature and signed into law by Gov. Gray Davis.

The other companies include Firemen’s Fund Insurance Co., whose subsidiary Allianz AG is a defendant in several class-action suits involving Holocaust-era claims.

Additionally, after Quackenbush subpoenaed the eight companies, four others--Aegon, AXA, Swiss Reinsurance and Zurich--volunteered to appear at the hearings, according to Quackenbush spokeswoman Dana Spurrier.

The Stern family sued Generali in February 1998, claiming that the company acted in bad faith when it refused requests to pay off on policies that family patriarch Moshe “Mor” Stern purchased starting in 1929. Stern and three of his sons died in the Auschwitz concentration camp. The family asked for $10 million in insurance claims and $125 million in punitive damages.

Stern’s descendants said they have made about half a dozen attempts to collect--starting in 1945 after the end of World War II. Adolf Stern, another of Moshe’s sons, said he had been unceremoniously thrown out of Generali’s offices in Prague when he went to make the first claim shortly after he was released from Auschwitz.

Generali, founded in 1831, is the largest insurer in Israel. The company has consistently contended that it owed the Sterns nothing, in part because their policies were among those nationalized when Communists took control of the Czech government after World War II.